The representatives of the PPP Agency have participated in the 7th session of the Working Party on Public-Private Partnerships of the UNECE Committee on Innovation, Competitiveness and PPPs

On the 30th of November and 1st of December, the 7th session of the Working Party on Public-Private Partnerships of the UNECE Committee on Innovation, Competitiveness and PPPs took place in  Palais des Nations in Geneva (Switzerland) and online.

The Working Party on Public-Private Partnerships is an intergovernmental body established in 2016 and it convenes over 3000 experts coming from the public and private sector, civil society and international organizations. The Working Party provides a platform for different opinions on Public-Private Partnerships from all stakeholder groups.

Halfway to 2030, progress on the Sustainable Development Goals (SDGs) has stalled, and in some cases, even gone into reverse. Investment in key infrastructure sectors and digital transformation remains crucial to build stronger and more equal economies, societies and systems that can support their people and contribute to the planet.

Public-Private Partnerships (PPPs) have the potential to unlock private capital into the much-needed infrastructure and the delivery of public services. The PPPs for the SDGs approach promoted by ECE ensures that PPP projects from inception to implementation contribute to the three sustainability pillars and deliver “value for people” and “value for the planet”.

To facilitate the implementation of PPP and infrastructure projects aligned with the SDGs, the ECE PPP programme develops normative guidelines with policy recommendations, and provides demand-driven capacity building and policy advisory services to member States.

With this in mind, the goals of the session were:

• To increase knowledge on the contribution of digital and green technologies to sustainable recovery and reconstructions PPP programmes;
• To highlight the importance of stakeholder engagement and gender equality in PPP and infrastructure projects; and
• To review the impact of ECE PPP normative tools, guidelines, and capacity building activities and chart a path for the future work of the Working Party.

The policy discussion on 30 November 2023 was organised in a series of panel discussions on accelerating digital and green transformations and promoting women’s empowerment and stakeholder engagement in PPP and infrastructure projects in support of the SDGs.

Session 1 was focused on ways to integrate digital and green transformation in economic recovery and reconstruction and discussed the use of the ECE PIERS methodology as a tool to attract finance in sustainable PPP and infrastructure projects, taking into account other multilateral platforms for sustainable infrastructure, including SOURCE.

The discussion participants focused on the challenges and opportunities to accelerate the delivery of PPP programmes for sustainable recovery and reconstruction. In particular, Mr. Richard Threlfall, Global Head of the Infrastructure, Government and Healthcare KPMG, emphasized the urgency of the issue of accelerating sustainable recovery and reconstruction projects in post-war and post-disaster contexts, including due to the mobilization of private capital. The speaker directly drew attention to the large-scale destruction after the earthquake in Turkey and the consequences of the war in Ukraine, which led to the irreversible destruction of socially significant infrastructure.

“All these disasters force us to look for resources to minimize the consequences and quickly restore destroyed objects, and PPP can be a driving mechanism” – Mr. Richard Threlfall, Global Head of the Infrastructure, Government and Healthcare KPMG.

Ms. Doris Chevalier, CEO of Infraboost (France), identified the following key aspects significant in the preparation and implementation of PPPs and infrastructure projects:

(1) involvement of all interested parties, taking into account the impact of infrastructure projects on the community/population, which applies not only to significant infrastructure projects but also to emergency projects;

(2) identification and assessment of all project risks;

(3) preservation of certain flexibility in PPP contracts to preserve the effectiveness of PPP implementation (in particular, recovery and reconstruction projects)

(4) transparency – above all, it is about open communication between all interested parties.

Mr. Syed Zaidi, Senior Director in the Government of Alberta (Canada), emphasized the need to create a separate public institution that will deal with PPP, equipping it with developing competencies, including involving additional expertise from consultants/advisors for recovery and reconstruction projects.

Mr. Syed Zaidi also noted the possibility of making changes to the legal regulation, which will ensure flexibility precisely in the processes related to the preparation and launch of sustainable recovery and reconstruction projects in post-war and post-disaster contexts. At the same time, the expert emphasized that such changes may involve certain exceptions from the general procedure. Still, in general, such flexibility should not become the norm, and after the situation stabilizes, the regulatory field should return to standard procedures.

At the same time, the moderator of the session, Mr. Jean-Patrick Marquet (World Economic Forum), noted that the degree of flexibility could be reviewed during the implementation of PPP projects, considering the changes taking place, including those related to the influence of external factors.

Regarding the stakeholder engagement in PPPs and infrastructure projects in support of the SDGs, Mr. Syed Zaidi emphasized the need to map all stakeholders, their interests, and influence, which will allow for the development of effective ways of interacting with them.

Regarding the possibilities of scaling PPP projects, the expert noted the importance of introducing a programmatic approach and the need to prioritize PPP projects and select key priority projects, including using the UNECE PPP and Infrastructure Evaluation and Rating System (PIERS). At the same time, Mr. Syed Zaidi points out that projects with a total cost of more than 1.5 billion dollars have higher risks, so there is no need to “enlarge” the projects too much.

Mr. Niko Gachechiladze, Director of the PPP Agency (Ukraine), focused the panelists’ attention on the need for significant investments in Ukraine’s economic recovery and reconstruction.

“In March 2023, the Second Rapid Damage and Needs Assessment (RDNA2) identified $411 billion worth of investments required for Ukraine’s reconstruction. Private sector investment and the possibility of insuring investment projects against war risks will contribute to the economic recovery and a more resilient future for Ukraine” – Mr. Niko Gachechiladze, Director of the PPP Agency (Ukraine).

Today, various types of war risk insurance are offered to international private investors by their national Export Credit Agencies. Additionally, individual war risk insurance is provided by specialized organizations such as the U.S. International Development Finance Corporation (DFC), which is prepared to insure Ukrainian investments, or the Multilateral Investment Guarantee Agency (MIGA), a division of the World Bank Group. The Government also anticipates the launch of a property risk insurance fund by the European Bank for Reconstruction and Development.

On November 22, 2023, the Verkhovna Rada adopted the draft law on the insurance of investments in Ukraine against military risks. This will enable the Ukrainian Export Credit Agency to insure and reinsure investments of both international and Ukrainian companies even during a state of war.

Public-Private Partnership mechanism can be used as an effective instrument for restoring Ukrainian infrastructure. 

“Our goal is to truly Build Back Better – a concept that has now acquired a new and deeper meaning for us. Therefore, it is vital for our PPPs to be aligned with Sustainable Development Goals, to promote economic, environmental, and social security and sustainability while also being resilient to change. PPPs can be an important SDG financing mechanism for bridging the investment gaps by mobilizing private finance into sustainable infrastructure development and post-war recovery using digital and green technologies” – Mr. Niko Gachechiladze, Director of the PPP Agency (Ukraine).

The Government of Ukraine and the Ukrainian people appreciate support of the UNECE, particularly in the face of russian aggression. In line with the decision by the Government of Ukraine to fast-track PPP and infrastructure projects in the reconstruction phase, the UNECE has developed guidelines to help public officials in Ukraine to better understand how the PIERS methodology can be flexibly applied, with the ultimate aim to attract the interest and increase the confidence of investors in Ukraine’s post-war reconstruction projects.

The first pilot PPP projects in Ukraine are currently being evaluated using the UNECE PIERS. 

On 12 December 2023, with the support of UNECE, a training event will be held for key stakeholders and potential initiators of PPP projects from the public sector in Ukraine to discuss how evaluating reconstruction and recovery projects using PIRS contribute to attract investors and increase their confidence.

Dr. Eyüp Vural Aydin, Chairman of the Istanbul PPP Center of Excellence (Türkiye), noted that SDG or sustainability is not a topic of future generations but also today’s matter. Today, the window of opportunity to achieve the goal of the Paris Agreement (to reduce greenhouse gas emissions, which will help limit the negative effects of likely global warming) is closing rapidly: the last eight years have been the warmest on record worldwide, and the critical threshold of 1.5 °C for annual temperatures are likely to be exceeded very soon.

“More than 90% of those who died due to extreme weather events during the last half century lived in the countries where more than 70% of the recorded disasters occurred” – Dr. Eyup Vural Aydin, Head of Istanbul PPP Center of Excellence, Turkey.

The frequency of natural and man-made disasters increases worldwide. To overcome the consequences, it is necessary to develop partnerships; it is essential to create financial instruments to deal with the consequences after a natural disaster (“intervention and recovery”), as well as to provide preventive measures to manage the risks of natural, man-made disasters before they materialize (“mitigation consequences and readiness”). As an example of an effective disaster risk management strategy and the effective implementation of PPPs for reconstruction, Dr. Eyup Vural Aydin cited the comprehensive reconstruction program of the Matsumoto district in Kobe after the Great Hanshin-Awaji Earthquake in Japan in 1995.

Ms. Stacy Sinclair, Partner at Fenwick Elliott LLP (United Kingdom), spoke about the importance of digitalization in accelerating sustainable recovery and reconstruction projects in post-war and post-disaster contexts. At the same time, she emphasized that digitalization is impossible without access and systematization of data – video data, satellite information data, databases of analog projects, etc. data required at various stages of the life cycle of PPP projects and other infrastructure projects. It is necessary to create effective data collection and monitoring systems at the preparation and project implementation stages. These can be digital platforms, such as SOURCE (a multilateral platform for preparing and managing sustainable infrastructure development projects, PPPs), or other tools for structuring and standardizing data.

An important event of the first session was the launching the ECE PIERS methodology online platform. Mr. George Katapodis, Chairperson of the Working Party on Public-Private Partnerships, presented the UNECE PPP and Infrastructure Evaluation and Rating System (PIERS).

PIERS is a unique platform to scoring infrastructure projects against the SDGs and the PPPs for the SDGs criteria. Put simply, it ensures projects create “value for people” and “value for the planet,” with a focus on the world’s most vulnerable. Integrating considerations of resilience, sustainability and circularity, PIERS brings together five PPPs for the SDGs desirable outcomes: access and equity; economic effectiveness and fiscal sustainability; environmental sustainability and resilience; replicability; and stakeholder engagement. PIERS is available online, free of charge, to enable efficient self-assessment.

The PIERS methodology was approved by the Working Party on PPP in 2021. Initially, a self-assessment tool was developed and made available to governments and other stakeholders in Excel file format. For greater convenience, it was decided to develop a web version of this tool (with compliance with all necessary cyber security and information security protocols).

The new online platform is available at https://piers.unece.org. 

Separately, I would like to note that the EEC PIERS methodology will also be available in Ukrainian.

Also, the UNECE secretariat is already working on the integration of PIERS into the SOURCE platform.

“PIERS is a self-assessment tool that allows the responsible specialist (for example, an employee of the PPP department, PPP Agency, or PPP Center) at each stage of PPP project preparation (starting from the identification stage), answering all questions of the methodology, to identify any gaps in preparation of the project and take appropriate measures to carry out additional assessments, studies, calculations, etc., with the aim of qualitatively structuring public-private partnerships” – Mr. Tony Bonnici, UNECE.

Session 2 was devoted to discussing the contribution of the ECE PPPs for the SDGs approach to empower women and improve gender equality.

Women are poorly represented within the infrastructure industry and typically in the delivery of critical projects. Their absence has negative impacts on the quality and quantity of projects and on the lack of gender perspective on infrastructure design and delivery.

The ECE PPPs for the SDGs approach strongly advocates for gender equality and women’s empowerment in PPP and infrastructure projects through its five desirable outcomes, the ten guiding principles and the ECE PIERS methodology. These tools provide a solid basis to mainstream a gender approach in PPP projects that contribute to the SDGs.

Ms. Mehita Fanny, Manager PPP Europe of the International Finance Corporation (IFC), spoke about the importance of taking into account the interests and needs of women in any project, for which it is necessary to build effective communication; to develop gender-sensitive stakeholder engagement frameworks at various stages of project preparation and implementation; to reduce the gender gap in multiple spheres (including in the practice of employment and the involvement of employees in the supply chain).

Mr. Nikitas Kastis, Senior Consultant and Managing Director of the Mind2Innovate (Greece), emphasized the need for comprehensive consideration of all gender aspects in infrastructure planning both at the design and construction stages, as well as in planning and organizing the provision of socially significant services for different user groups. At the same time, Mr. Pedro Neves, CEO of Global Solutions (Portugal), generally identified the need to transition PPP from the concept of “one of the types/methods of public procurement” to the concept of focusing on the provision of high-quality socially significant public services.

The moderator of the session – Ms. Sedef Yavuz-Noyan, Head of the PPP Department of the Strategy and Budget Office of the Presidency of the Turkish Republic (Türkiye), noted that the results of the session will be considered and included in a proposed ECE practical guide on gender equality and women’s empowerment in PPPs for the SDGs.

Session 3 was devoted to issues of optimising stakeholder engagement in projects through the UNECE PPP for the SDGs approach to ensure wider social participation, leaving no one behind and addressing social impacts from project identification through to implementation, and as a result – to catalyse sustainable development.

Stakeholder engagement is one of the five desirable outcomes of the ECE PPPs for the SDGs approach.

During the discussion, Ms. Petra Ferk from the Institute for PPP (Slovenia) spoke about the importance of stakeholder engagement during the preparation of PPP projects and throughout the entire project life cycle. She separately drew the attention of the discussion participants to the fact that the lack of stakeholder engagement and effective communication with various groups of stakeholders can even lead to a complete stop of the project.

Mr. Sanzhar Bolotov, Director of the PPP Center (Kyrgyzstan), shared experience of creating a mechanism to involve all stakeholders to avoid making investment decisions by “one person”. This mechanism in Kyrgyzstan ensures transparency of the processes of project preparation and their approval.

Mr. David Dodd, President of the International Sustainable Resilience Center (New Orleans), emphasized the importance of engaging the beneficiaries at all stages of project preparation, in particular, for example, during the development of technical requirements for a new infrastructure facility and performance indicators for the provision of public services. Mr. David Dodd gave an example of the PPP project for constructing new fortified housing for residents affected by Hurricane Katrina in the USA. During the preparation of this project, effective communication with the local population made it possible to structure the PPP in such a way as to consider the interests of the beneficiaries while providing them with quality new permanent housing.

Ms. Amanda Loeffen, CEO of the Human Right 2 Water (United Kingdom), emphasized that it is essential to engage and communicate with all groups of stakeholders – both with the final beneficiaries (population, service recipients) and those involved in individual stages of preparation and implementation of the project, as well as with those groups of stakeholders who oppose the project.

“For successful PPPs, it is necessary to ensure openness and transparency of information and the results of consultations with stakeholders. It is important to ensure a mechanism for dealing with grievances and an open dialogue about dealing with grievances” – Ms. Amanda Loeffen, CEO of the Human Right 2 Water (United Kingdom).

The moderator of the session – Ms. Melissa Peneycad, Advisor at Beyond21Academy (Canada), noted that the session’s results will be considered and included in a proposed ECE practical guide on enhancing stakeholder engagement in PPPs for the SDGs.

The day’s final event was the launch of the ECE publication “Standard on PPP/Concession Legal Framework in support of the Sustainable Development Goals and its Accompanying Guide”.

The purpose of this Standard is to establish the legal framework for “PPPs for the SDGs” and the contracts, including the rules and procedures governing their selection, preparation, appraisal, procurement and implementation, the contractual principles and institutional arrangements applicable to them, and assist in the orderly and coordinated delivery of PPPs. This Standard applies to PPPs, with particular emphasis on those with a “PPPs for the SDGs” basis. The Accompanying Guide is a supporting commentary of the Standard and provides additional elucidation of the text of the Standard, written in non-legal language, but does not attempt to address or re-state every provision.

On December 1, a general segment of the session was held with discussions and decisions on the ECE PPP programme, including future work.

According to the results of the work review since the 6th session of the Working Party on Public-Private Partnerships on December 1-2, 2022, important normative guidelines and standards with policy recommendations developed by the UNECE were approved:

• Standard on a Zero Tolerance Approach to Corruption in PPP Procurement
• Declaration on a Zero Tolerance Approach to Corruption in Public-Private Partnerships Procurement
• Putting the Guiding Principles on Public-Private Partnerships in support of the United Nations Sustainable Development Goals into practice
• Standard on Public-Private Partnerships in Railways
• Standard on Public-Private Partnerships in Renewable Energy
• Standard on Public-Private Partnerships in Roads
• Involving reliable and independent experts to develop Public-Private Partnerships projects in support of the Sustainable Development Goals in low and middle-income countries
• Guidelines on delivering Public-Private Partnerships projects for sustainable economic recovery and reconstruction in support of the Sustainable Development Goals
• Annual summary report of Bureau decisions since the sixth session of the Working Party on Public-Private Partnerships on 1-2 December 2022

Drafting team leaders reported on the status of work on new practical PPP guides launched in 2023:

(i) Improving the delivery of PPPs through digital transformation throughout the project lifecycle in support of the SDGs 

(ii) PPPs in digital infrastructure: diagnostics in healthcare (telemedicine) and other digital public services 

(iii) Green and Sustainable PPP Procurement for the SDGs 

(iv) The state of PPP and infrastructure finance midway to 2030 

(v) The pros and cons of simplifying and accelerating the delivery of PPP projects for the SDGs for sustainable economic recovery and reconstruction

The participants of the 7th session of the Working Party on PPPs listened to short interventions on future work to start in 2024:

(i) Practical Guide on Enhancing Stakeholder Engagement in PPPs for the SDGs

(ii) Practical Guide on Promoting Gender Equality and Women’s Empowerment through PPPs for the SDGs 

(iii) Standard on Off-grid Renewable Energy PPP projects in support of the SDGs

(iv) Promoting climate resilient PPP and infrastructure projects in support of the SDGs

The terms of office of Bureau members were expiring at the end of this seventh session, so a new Bureau was elected pursuant to the Working Party’s Rules of Procedure (for a two-year term). Syed Zaidi, Senior Director at the Government of Alberta (Canada), has been elected as the new Chairperson of the Working Party on PPPs.