A public-private partnership succeeds when it meets both the state's objectives and investors' return requirements. Structuring one requires, above all, understanding what each party expects.
A public-private partnership (PPP) brings together two parties with different logics. On one side is the state, focused on its mission, its legitimacy and the long-term benefits for the country. On the other are private investors, focused on risk, return and the time needed to recover their investment. The projects that succeed are those that take both logics into account.
Most PPPs that fail do not do so for financial reasons. They fail because one party did not understand what the other needed in order to commit, and no financial structure can make up for that misunderstanding.
Start from the state's objectives. Infrastructure, energy, health or digital projects must serve priorities the state has already set. The structure should make this contribution clear from the first discussions.
Assess the real risk, not the assumed risk. Political and regulatory risk is often overestimated by foreign players and underestimated by local ones. Assessing it correctly requires being close to the institutions that actually make the decisions.
We understand both what governments expect and what investors require, and we build agreements that meet both.
Build a relationship that lasts beyond signature. A PPP commits the parties for many years. They must be able to trust each other long after financial close: the quality of the relationship matters more than the contract.
Behind every successful partnership lies less visible work: analysis of the competition and the institutions, command of the regulatory framework and in-depth knowledge of the local context. This work does not appear in the final agreement, but without it there would be no agreement.
Efficient Network — MEA Strategy & Development Consulting.