PPP Finance Strategy Tool

This tool is developed by PPPLab to assist in developing, reviewing or sharpening a finance strategy for a Public- Private Partnership. As such, it could be of interest to persons/ organisations that want to develop/ improve a PPP or that are considering to invest in a PPP.

The tool will assist in analysing financing needs and bottlenecks and in reviewing a range of financing options. It aims at broadening the view of the users, helping to be more creative and to open opportunities for smart combinations of financing streams.

The tool builds on the PPPCanvas, a business model canvas especially designed for PPPs– as a clear understanding of the PPP’s essential features is crucial before a financing strategy can be developed. Optionally other tools or ways can be used, as long as there is sufficient clarity around what the PPP is aiming for, how it will achieve this, the business case within it and the developmental outcomes or public value it creates.

The tool consists of four steps that usually will involve an iterative process to conclude, meaning working on one step, may lead to further questions about/ ideas for previous steps. Hence, while using the tool you may have to jump back to a previous step(s) to optimize it.

  • Step 1: A set of questions helps to provide more clarity on the essence of the PPP. If it is not possible to answer these questions, it highlights some areas where you may need to do some more work.
  • Step 2: A second set of questions assists in identifying the financing needs and bottlenecks.
  • Step 3: With help of a template, a range of financing opportunities can be considered systematically for their suitability for the PPP.
  • Step 4: Through some key questions and pointers for summary, the above steps are brought to a conclusion.

It needs to be understood that finding the necessary finance for PPPs can be very challenging and that following the above steps may not be a recipe for success at the first attempt. However, the tool should help – in an iterative way – to better define your PPP, the financing challenges and opportunities and to work systematically towards a strong finance strategy. While the tool will not “spit out” a finance strategy for you, it should provide you key insights and ingredients that will help you write it. It needs to be kept in mind that the tool could assist people from various  backgrounds on headlines, but that financial experts will remain required when working out details.