On the September 9, 2024, edition of CNBC Africa’s ‘Power Lunch’, Jyoti Bisbey, Executive Member of the World Association of PPP Units and Professionals (WAPPP), shared her expert analysis on the latest Deal Update Report. This report, a collaborative effort between InfraPPP and WAPPP, provides a comprehensive look at public-private partnership (PPP) deals for the second quarter of 2024. Bisbey’s insights shed light on the evolving landscape of PPPs, offering valuable perspectives for stakeholders and industry professionals.
Geopolitical Influences and Sector Trends
One of the key takeaways from Bisbey’s interview was the impact of the geopolitical climate on PPP transactions across various regions. The ongoing geopolitical tensions have undoubtedly introduced a layer of complexity to international deals. Despite this, the report indicated that the number of PPP deals had only decreased slightly by four units compared to the previous quarter, a reduction deemed negligible in the broader context of economic volatility.
Bisbey highlighted that the report specifically excluded energy projects, which traditionally dominate the PPP sector. Historically, energy projects, particularly those involving electricity generation, have been a major component of PPP portfolios due to the attractiveness of turnkey and take-or-pay contracts. However, this sector’s prominence is waning.
Sector Shifts: Transportation and Social Sectors Rise
The report reveals a significant shift in sector dominance. While the energy sector has been a major player in PPPs, recent trends show a decline in its share of the overall portfolio. Previously accounting for around 90% of PPP deals, energy projects now constitute less than 50% in some cases. In contrast, transportation continues to lead in completed deals, echoing its strong performance in the first quarter of 2024. This sector remains a cornerstone of PPP activity, reflecting its critical role in infrastructure development.
Following this, the transportation, social and health sectors are gaining prominence. This shift highlights a growing recognition of the importance of projects related to health, education, water supply, and waste management. As communities face pressing needs, these sectors are increasingly prioritized in PPP frameworks.
The Rise of Smaller and Community-Driven Projects
Another noteworthy development discussed by Bisbey is the rise of smaller, community-driven PPP projects. While large-scale projects and super-sized deals have historically captured the spotlight, there is now a noticeable trend toward more localized and manageable projects. This shift reflects a growing emphasis on projects that address specific community needs rather than large, foreign direct investment (FDI)-driven initiatives.
Bisbey’s observations point to a broader trend where countries focus on smaller, subnational projects that directly impact local communities. This approach aligns with a more nuanced understanding of development priorities and recognizes the value of projects that cater to immediate, localized needs.
Read the Report here.
Watch the interview: https://www.cnbcafrica.com/media/6361734391112/global-public-private-partnership-body-reports-slip-in-global-deals/
