What is a Public-Private Partnership (PPP)?

A public-private partnership (PPP ) is an agreement between a public agency and a private partner to implement and manage a public service project. The aim is to stimulate innovation and economic efficiency for the benefit of citizens and businesses. PPPs are designed to provide public services at lower rates and with higher quality requirements than traditional public services.

PPPs are most often implemented by groups of companies who offer comprehensive public services including the design, construction, operation and maintenance of the project. The funds for these projects are generated by the private partner. The public then finances the project for a fixed period using various mechanisms, such as fees, tariffs and taxes.

PPPs can also be used for specialized financing projects, such as infrastructure projects, where public and private capital are combined to finance long-term investments. In some cases, the public and private sectors can provide mixed services and capital, or capitalization fed by both public and private capital.

Finally, PPPs can be used to manage existing public services, thereby improving efficiency and quality and generating cost savings. PPP agreements can also include tariff adjustment clauses to cover the additional costs of investments needed to maintain a satisfactory level of service.