ACTIVITIES AND RESULTS

Objectives related to the enabling environment were mostly achieved, but projects focusing on financing had difficulties in countries with weak enabling environments. Basic conditions for successfully delivering infrastructure services through PPPs were absent in half of the projects in the sample. Yet the approach was not to consistently first build prerequisites – IDB Group often only engaged at financial closure of the projects.

When different parts of IDB Group acted independently, inefficiencies were likely to increase, and the opportunity to provide overarching solutions was missed. Additionally, value for money analyses were not routinely conducted in early decision-making processes, which led to the pursuit of objectives that did not maximize IDB Group’s potential to add value.

ADDED VALUE AND SUSTAINABILITY

IDB Group added value in a few countries (most notably Colombia and Uruguay) by having long-term engagements with governments, being flexible and adaptable to changes in context, and working in new areas with high potential.

Providing a recognized “seal of approval” early in project preparation and applying IDB Group environmental and social safeguard standards (often more rigorous than national ones) are other areas where IDB Group can add value.

The longer-term sustainability of IDBG support was often uncertain. Improving disclosure practices in PPP projects is key to increasing transparency, mitigating corruption risk, and raising public awareness about the benefits.

Additionally, although long-term local currency financing is essential for PPP sustainability, in many LAC countries capital markets are concentrated, small, and not very deep. PPP projects sometimes also have difficulty managing environmental and social risks, which are often high for this kind of project.

INTERNAL ORGANIZATION

Practically all MDBs have redesigned their approaches towards PPPs, some of them drawing on evaluations of their experience. The main lessons include the need for a clear and focused PPP strategy; a critical mass of PPP skills and expertise; a coordinated and collaborative approach across all parts of the institution involved, with an appropriate incentive framework; and an adequate set of PPP-related instruments (including knowledge, policy, and financing).

IDB Group can learn from the experiences of other MDBs. Though several strategy documents mention their importance, IDB Group does not yet have a clear overarching PPP strategy, and country strategies have not adequately guided the Group’s PPP activities. Staff working on PPPs is dispersed, without a focal point that could help in making decisions and sharing lessons, and initiatives have been undertaken on a case-by-case basis.

While some important knowledge products have been developed, PPP knowledge is not optimally managed and IDB Group has not used project preparation facilities to their full potential.