The Second Forum for Public-Private Partnership (PPP) Units in Africa opened in Addis Ababa under the theme, “Making Social Sector PPPs Work: From Policy Ambition to Effective Service Delivery.”
The two-day hybrid forum is co-organised by the United Nations Economic Commission for Africa (ECA), the African Development Bank (AfDB) and the African Legal Support Facility (ALSF). It brings together PPP units, government officials, development-finance institutions and technical experts from across the continent to examine how private investment can help expand access to housing, health care, education, sanitation, water and energy.
While PPPs have been widely used in commercially viable infrastructure such as toll roads, ports and airports, applying the model to social services presents a more complex challenge. Projects in education, health and affordable housing often cannot rely solely on user fees, requiring governments to develop financing mechanisms that balance investor returns with affordability, fiscal sustainability and accountability.
In separate interviews with Capital’s Groum Abate, Robert Lisinge, Chief of the Energy, Infrastructure and Services Section in ECA’s Private Sector Development and Finance Division, and Olivier Pognon, Director of the African Legal Support Facility, discussed the conditions needed to make social-sector PPPs work across Africa. Excerpts;
Capital: This year’s PPP Units Forum focuses on making social-sector PPPs work in practice. Why is it important for ECA to be part of this forum, and what role can the Commission play in advancing social-sector PPPs across Africa?
Robert Lisinge: ECA’s mandate is to support economic and social development in Africa. One of the major constraints to development on the continent is the lack of infrastructure.
There is economic infrastructure—roads, airports, ports and railways—that facilitates economic activity. But there is also a serious gap in social infrastructure, including access to electricity, water, education and other essential services.
For economic infrastructure, it is relatively easier to attract private-sector investment because there is often a clear route for investors to recover their money. With a toll road, for example, users may be willing and able to pay for the service.
Social infrastructure is different. It can be difficult for communities to pay the full cost of services such as water, electricity, health care or education. Yet, if these projects are delivered through a public-private partnership, the private sector must still recover its investment.
The key question is how to balance private-sector profitability with the affordability of services for communities. This is a critical challenge, and it is why ECA is involved in these discussions.
The forum gives countries, experts and stakeholders an opportunity to identify challenges, exchange ideas and learn from what is working—or not working—in other African countries. For ECA, it is part of our policy-dialogue work: bringing member states and partners together to discuss difficult issues and share practical experience.
Capital: As governments seek to mobilise more private capital for infrastructure and public services, what conditions are needed to make PPP projects attractive to investors while remaining affordable and sustainable for the public sector?
Robert Lisinge: One of the most important conditions is a sound financial architecture. The private sector needs access to capital markets and long-term infrastructure finance.
Governments promote PPPs partly because public budgets are insufficient to finance all the services that growing populations require. However, private investors also need reliable ways to raise capital. This may include stock markets, bond markets and other financing instruments that allow project developers to mobilise long-term resources.
The second condition is government commitment and ownership. A government may have a strong vision for PPPs, but that vision must also be translated into ownership at the technical level.
For example, ministries of education, health, water or energy must take responsibility for the technical preparation and delivery of projects in their sectors. They need to understand the project, define the public-service objective and take ownership of the process.
Technical ownership is only the first step. Institutions also need the capacity to prepare projects properly—from pre-feasibility studies and feasibility studies to procurement, negotiation and contract management.
In summary, two critical enablers are needed. First, there must be a financial environment that provides access to long-term infrastructure finance. Second, governments must have political commitment, technical ownership and the capacity to prepare projects and negotiate effectively with the private sector.
Capital: Looking at East Africa and the continent more broadly, what opportunities do you see for expanding PPPs? How can cooperation between ECA, the AfDB and the ALSF help move projects toward implementation?
Robert Lisinge: In East Africa, one important opportunity is that economies are growing. Countries such as Ethiopia and Kenya have expanding economies, which indicates that the private sector is becoming more dynamic and may be more willing to invest in infrastructure.
Some countries are also putting mechanisms in place to finance project preparation. This morning, for example, we heard that Kenya has established a fund for preparing projects. That is a step in the right direction because many potential PPPs do not advance simply because governments lack the resources to prepare them properly.
ECA, the African Development Bank and the African Legal Support Facility can continue to organise platforms such as this PPP Forum. These platforms bring experts and officials from different countries together to exchange views, share experience and discuss what works.
They also create opportunities for member states to engage directly with development-finance institutions. That is an important role that ECA, the AfDB and the ALSF can play, and one we will continue to pursue.
Capital: The African Legal Support Facility supports African governments in complex commercial transactions. How would you describe the Facility’s role and the value it brings to African states?
Olivier Pognon: The Facility was created to provide African governments with greater certainty and confidence when negotiating complex commercial transactions.
By certainty, I mean the level of confidence government officials need when they sit across the negotiation table from sophisticated private-sector parties that are supported by highly experienced legal and financial advisers.
On the government side, officials may not always have had extensive exposure to complex commercial transactions. The ALSF helps to complement government skills, expertise and knowledge.
We do this in two main ways.
First, we provide transaction advisory support. Whether a government is negotiating a mining licence, an independent power-producer agreement, a debt restructuring arrangement or another complex transaction, the ALSF can put together a team made up of internal specialists and external law firms.
That team works alongside the government throughout the transaction, from feasibility assessment and project structuring to financial close and, in some cases, the implementation stage.
Second, we provide capacity-building support. Events such as the PPP Units Forum bring together ALSF experts and sector specialists to exchange views and develop continental or regional approaches to particular issues.
We also produce model contracts, toolkits, handbooks, thematic guides and training materials. Through the ALSF Academy, we offer an online platform for capacity development.
This is the role we have played for 16 years. We have built experience and results that we can be proud of, but we are also an institution that continues to learn, mature and grow with support from our stakeholders.
Capital: Why did the ALSF choose to focus this year’s PPP Forum on social-sector PPPs? What key outcomes would you like to see emerge from the discussions?
Olivier Pognon: This is the second PPP Units Forum. The first was held in 2024 and focused on climate-related risks and how they should be incorporated into PPP design.
At the time, discussions around energy transition and climate risk were particularly important, and they remain important today. We examined how climate risks could be better reflected in PPP projects across Africa.
This year, we are building on that discussion by focusing on social-sector PPPs, especially in housing, education and health care.
These are sectors where private capital does not naturally flow at the scale required. There may be limited direct revenue opportunities, while affordability remains a central issue for citizens.
We are trying to address the social-sector PPP equation by bringing PPP units together to discuss the challenges and identify workable solutions.
The main outcome we want is a clearer understanding of the drivers of successful social-sector PPPs. When discussing education or health care, affordability is a major concern. But if private capital is required, the investor’s return on investment also has to be considered.
The challenge is to reconcile those two seemingly contradictory requirements. We hope the forum will help countries find ways to structure social-sector PPPs that are sustainable, financially viable and able to deliver affordable services.
Capital: At a time when African governments face major infrastructure needs and limited public resources, what role can PPPs play in mobilising private investment while ensuring essential services remain accessible and sustainable?
Olivier Pognon: That is the core purpose of a PPP. It is designed to help alleviate the financial constraints governments face and allow private capital to finance areas that public budgets can no longer fund adequately.
In many countries, national treasuries are under pressure from rising debt-service costs and competing public expenditures. At the same time, governments must still invest heavily in roads, ports, airports and other major infrastructure.
PPPs have long been described as a tool for helping Africa raise its infrastructure capacity to another level. They can help governments mobilise additional capital and technical expertise while improving the delivery of public infrastructure and services.
However, PPPs must be designed carefully. The aim is not simply to bring in private capital. The aim is to ensure that projects provide services that are affordable, sustainable and accountable to the public.
For social-sector PPPs, governments must strike the right balance between the needs of citizens, the financial sustainability of public institutions and the reasonable expectations of private investors.
