Public-Private Partnerships (PPPS) represent one of the mechanisms for funding the more powerful for the development of infrastructure in West Africa. Yet, their success rate is still insufficient in the absence of a structuring rigorous in the design phase.
What is a PPP and why it is crucial in Guinea ?
A PPP is a contractual agreement in the long term, between a public authority and a private operator, where the latter provides a service or develop an infrastructure in exchange for a reward based on performance. In Guinea, the infrastructure needs are substantial : energy, transport, water, telecommunications and health care sectors where PPPS can play a transformative role.
The 5 key stages of a PPP is well-structured
1. Identification and feasibility : Any approach to PPP begins with a rigorous analysis of the technical feasibility, economic and legal aspects of the project. A feasibility study sloppy is the primary cause of failure of PPPS in africa.
Our experts accompany you to the’analysis l’delivery, on all markets.
Book my consultation2. Legal structure : The choice of the contractual scheme (concession, BOT, BOO, lease) should be guided by the nature of the project and the capacity of the parties. In Guinea, the right OHADA offers a stable and predictable.
3. Financial arrangements : Seeking funding for a PPP mobilizes usually a combination of equity, debt, banking, finance multilateral donors (ADB, World Bank, IFC), and sometimes government guarantees.
4. Bidding process : The transparency and competitiveness of the selection process are crucial to attract the best private operators and ensure the legitimacy of the partnership.
5. Monitoring and governance : The execution phase is where most of the PPP are experiencing difficulties. A governance framework is robust, with KPIs and clear a mechanism of conflict resolution, is essential.
Mistakes to avoid absolutely
The under-estimation of foreign exchange risks, the absence of a clause to review rates, a study of insufficient demand, and an imbalance in the allocation of risk between partners in the public and private are the main causes of failure of PPP in West Africa.
Global Corporate E2A has a recognized expertise in the structuring and facilitation of PPP in Guinea and West Africa. Contact us to explore the opportunities.