In the quest for sustainable development, developing countries often grapple with limited resources, inadequate infrastructure, and lagging technological adoption. Public-private partnerships (PPPs) offer a solution by blending the agility and efficiency of the private sector with the reach and policy support of governments.

Governments in developing countries often face budgetary constraints and bureaucratic inefficiencies, limiting their ability to provide essential public services at scale. Meanwhile, the private sector is well-equipped with innovation, technology, and capital but lacks the mandate or the public infrastructure needed to effect systemic change on its own. By leveraging the strengths of both, PPPs enable developing countries to accelerate their progress toward achieving key developmental goals.

Consider the pressing issue of infrastructure development: The African Development Bank reports an annual infrastructure financing gap of $68-$108 billion on the continent. Governments alone cannot bridge this gap, highlighting the practical application and potential of PPPs in addressing real-world challenges.

Through shared risk, joint innovation, and complementary resources, PPPs hold the potential to unlock growth in sectors like healthcare, education, and infrastructure. These partnerships, which involve collaboration between government entities and private sector players, offer a pragmatic solution to address infrastructure deficits, economic inequality, and social development goals.

The promise of public-private partnerships

At the heart of PPPs is the belief that the combined expertise, resources, and innovation from the public and private sectors can achieve more than either party could independently. Governments, often constrained by budget deficits and stretched thin by competing priorities, can leverage the capital, efficiency, and technical know-how of private companies to execute large-scale projects. On the other hand, private sector players gain access to new markets and opportunities while also enhancing their corporate social responsibility profiles.

This symbiosis, however, is far from simple. The success of a PPP hinges on the alignment of goals, transparency in processes, and a shared commitment to long-term outcomes. When executed effectively, these partnerships have the power to reshape industries, reduce poverty, and bring about lasting socio-economic benefits.

There are compelling examples of PPPs enabling transformative change in developing countries, including: 

1. a) Rwanda’s energy sector has seen profound improvements through PPPs. In 2014, the government of Rwanda partnered with American company ContourGlobal to develop the KivuWatt project, a groundbreaking initiative that extracts methane from Lake Kivu to generate electricity. This project, designed to address Rwanda’s chronic energy shortages, has not only provided a reliable source of power but also mitigated environmental risks associated with methane buildup in the lake. Such initiatives underscore how PPPs can not only address pressing infrastructural needs but also drive innovation in resource management and sustainability.
2. b) Kenya’s bold vision to become a technology hub on the African continent is driven by Konza Technopolis, a smart city developed through PPPs. The project, backed by global technology companies and private investors, aims to attract technology innovators, researchers, and startups. In return, it offers job creation, increased exports, and knowledge transfer that will boost Kenya’s ICT sector. Konza represents a model for how well-structured PPPs can drive large-scale urban development projects that position a country for long-term competitiveness.
3. c) Another beacon of PPP success can be found in India’s infrastructure development. The Delhi-Mumbai Industrial Corridor (DMIC), a collaborative venture between the Indian government and Japanese investors, is set to transform India’s industrial landscape. With smart cities, dedicated freight corridors, and sustainable urbanisation at its core, the DMIC aims to stimulate economic growth, create jobs, and boost industrial productivity. By combining government planning with private sector investment, India is fast-tracking its path to becoming an industrial powerhouse while also addressing the growing needs of its population.

Learnings for developing countries

While the potential for PPPs is immense, the successful implementation of such partnerships in developing countries relies on several critical factors:

• Policy and regulatory environment: A clear and enabling policy framework is essential for fostering confidence in PPPs. Governments must ensure that there are transparent, predictable, and enforceable regulations. A good example is South Africa, where the government has created legal frameworks to attract private investments in energy through PPPs. The Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) is considered one of the most effective PPP models, contributing over 6,000 MW of renewable energy capacity to the grid since its inception.
• Risk sharing: Properly distributing risk between the public and private sectors is fundamental to the success of any PPP. The public sector typically assumes political, social, and environmental risks, while the private sector manages operational, financial, and technical risks. Balanced risk-sharing ensures that both parties remain committed to the partnership’s goals.
• Transparency and accountability: PPPs must operate under robust mechanisms for transparency, contract management, and accountability. If not managed effectively, PPPs can become susceptible to corruption or inefficiency, eroding public trust and investor confidence.
• Innovation and capacity building: PPPs should also emphasise local capacity building, ensuring that technology transfers and skill development benefit local workers and industries. This contributes to sustainable economic growth and reduces reliance on external expertise. 

Moving forward: Harnessing the full potential of PPPs

For developing nations, PPPs represent a pathway to achieving the Sustainable Development Goals (SDGs). Whether it’s providing clean energy, improving healthcare access, or building critical infrastructure, these partnerships can be tailored to a country or region’s unique needs. However, successful PPPs depend on more than just capital infusion or technical expertise – they require political will, strategic stakeholder engagement, and long-term vision.

Governments must create an enabling environment that fosters trust, transparency, and accountability. This includes developing clear regulatory frameworks, ensuring fair risk-sharing between the public and private sectors, and promoting capacity-building to manage these complex relationships. Additionally, private companies need to embrace their role as development partners, not merely profit-seekers, and invest in projects that align with broader social goals.

Moreover, the involvement of multilateral development institutions like the World Bank and the African Development Bank can provide critical support in structuring and financing PPPs, particularly in regions where domestic capital is scarce. These institutions can act as neutral arbiters, ensuring that contracts are equitable and that projects are designed to deliver maximum social and economic returns.

To conclude, former UN Secretary-General Ban Ki-moon’s words, “Public-private partnerships are essential to mobilise the resources needed to ensure sustainable development,” make more sense now than ever. Developing nations need to embrace PPPs not as a last resort but as a foundational pillar for a sustainable future.