This document discusses key aspects of public-private partnership (PPP) projects including the typical project lifecycle, requirements for successful PPP delivery, and examples from Egypt, Mauritius, and Kenya. The project lifecycle involves stages such as identification, preparation, procurement, implementation, and evaluation. Successful PPPs require an appropriate legal framework, capacity building, clear roles for government institutions, and effective engagement with the private sector. Country examples highlight important institutions like PPP units and committees, as well as processes for solicited and unsolicited private proposals.

1. Kick Starting a PPP project
Presentation by :
Mrs. Audrey Mwala
Director of Project Finance & Risk Analysis
The Public Private Partnership Commission,
Malawi1

2. Session 3- Outline
•PPP Project life Cycle:
•Egypt
•Mauritius
•Kenya
•Knowledge, skill, attitudes for PPP delivery
•The readiness of state institutions
•Reorienting the public sector
•Working with the private sector
•Initiation and planning of PPP programme
•Importance of legal, Institutional, financial, fiducially
framework for capacity building
•Project Finance and financial Modeling
•Risk Management
2/26/2016 2
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi

3. What it is a PPP project Life
Cycle
• Logical sequence of activities to achieve project’s objectives.
• All projects go through a series of stages.
• Lifecycles differ across:
– countries,
– sectors and
– by the chosen implementation method
• A life cycle is used to:
– Control progress through a project;
– Provides review points
– Project’s likelihood of success is validated
– Decision to move to the next phase made.
2/26/2016 3
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi

4. Key Life Cycle Stages
1. Project Identification
1.1 Project selection and
definition
 Identification
 Output specifications
1.2 Assessment of the PPP
option
 Affordability
 Risk allocation
 Bankability
 Value for money
2. Detailed Preparation 2.1 Getting organised  Project team
 Advisory team
 Plan and timetable
2.2 Before launching the tender  Further studies
 Detailed PPP design
 Procurement method
 Bid evaluation criteria
 Draft PPP contract
3. Procurement 3.1 Bidding process  Notice and
prequalification
 Invitation to tender
 Interaction with bidders
 Contract award
3.2 PPP contract and financial
close
 Final PPP contract
 Financing agreements
 Financial close
4. Project Implementation 4.1 Contract management  Management
responsibilities
 Monitoring service
outputs
 Changes to the PPP
contract
 Dispute resolution
 PPP contract
termination
4.2 Ex post evaluation 4.2 Ex post evaluation  Institutional framework
 Analytical framework
2/26/2016 4
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi

5. Mauritius
• PPP Act of November 2004.
• Amended in June 2008 to:
– provided set up of a PPP Committee and
– provided for unsolicited bids
2/26/2016 5
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi

6. Key Institutions/ Parties
• Contracting Authority-
– Identify, appraise, develop and
monitor a projects
– Carry out feasibility studies
– Submit results to the PPP
Committee
– Prepares RFP on the approval of
the study
• Central Procurement Board
– Examine and evaluate bids
– Recommend to CA to negotiate
with preferred bidder
– Approve the award of the project
A PPP Unit
•Set up in July 2002
•Drafted the legislation
•Produced PPP guidelines Manual
•Reports to the PPP Committee
•Works with CAs to select PPP projects
•Deals with matters referred by PPP Committee
•Source of PPP information
•Develop PPP awareness.
PPP Committee
•Assessments projects, recommends to CA
•Develop PPP best practice guidelines
•Formulate PPP policy in relation
2/26/2016 6
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi

7. PPP Cycle – Govt. initiated PPPs
Feasibility Study-
• To assess if a project may be implemented under PPP.
• The feasibility study must demonstrate:
• comparative advantage for implementation under a PPP
– Affordability, VFM, Risk transfer
• Show contracting authority’s capacity to effectively:
– enforce agreement, Monitor implementation and performance
• The extent to which functions can lawfully and effectively be
performed by a private party
• The most appropriate form of PPP
2/26/2016 7
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi

8. Procurement
Pre-selection
• The CA obtains approval of CPB conduct pre-selection.
• The pre-selection documents are approved by CPB.
Request for Proposal
• The CA submits the RFP to the CPB for approval.
Evaluation and award of bids
• The CPB is responsible for the evaluation of bids -but
may set up an evaluation committee.
• The award of the contract is approved by the CPB.
2/26/2016 8
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi

9. Procurement unsolicited Proposal
• Private party submits project concept & feasibility study cost
to CA.
• CA examines project in line with sector strategies &
investment programme and if its suitable for PPP.
• CA submits it to the PPP Committee within 15 days.
• The PPP Committee may approve or reject the project
concept.
• If the CA within 5 working days requests the proponent to
submit:
– details of technical, commercial, managerial and financial
capabilities;
– a feasibility study
– the nature of information which is proprietary.
• No price proposal at this stage.
2/26/2016 9
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi

10. Unsolicited bid’s Cont1’
• The PPP Committee assesses the feasibility study and evaluates
the technical proposal.
– (a) If its accepted, the PPP Committee requests CA to proceed with an
Invitation to bid.
– (b) If its rejected, the process ends. No compensation for feasibility
study costs.
• CA prepares RFP based on information in the technical proposal.
• The RFP is approved by the CPB before bids are invited.
• The proponent is requested to submit only a financial proposal.
• The other bidders submit both technical and financial proposals.
2/26/2016 10
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi

11. Unsolicited bid’s Cont2’
• The RFP indicates that:
• (a)the project has emanated from a proponent whose
technical proposal was accepted
• (b)the proponent will be awarded the project if their
price is within 10 % of the price of the preferred bidder;
and
• (c) If the original proponent is not successful, the CA
will compensate the cost of the feasibility study which
will be claimed from the successful bidder.
• The CPB evaluates the bids gives and approval of the
successful bidder.
2/26/2016 11
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi

12. Egypt
• PPP Law (Law 67/2010), Partnership with Private
Sector for Infrastructure Projects & Public Utilities
• Regulations 2011
• Policy
2/26/2016 12
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi

13. Key Institutions
• Line Ministry
– (CA)- identifies projects
• Minister of Finance
• Satellite Units in Line
Ministries (Nodal Agencies)
2/26/2016 13
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi
A PPP Central Unit
•Promote the national PPP initiative
• Facilitate solutions to legal and institutional obstacles for PPPs
•Develop PPP best practices, models
•Validate and develop PPP proposals
•Shepherd pilot procurements of PPPs
•Build capacity in the Public sector
•Assist in selection of advisors, Investors
PPP Supreme Committee
•Approve projects
•Appoints advisors
•Prepare Contract Award
Requirements

14. The Cycle
– Line Ministry Submits Project Proposal to
– PPP Central Unit for Screening/ modification
– PPP Central Unit submits to
– PPP Ministerial Committee for Approval
2/26/2016 14
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi
Project
Preparation
Approval by
Supreme
Committee
Tendering
Implementation
& Post Contract
Monitoring
Project initiation

15. Competitive
Dialogue
–with the qualified
bidders
–with each bidder
separately
– to obtain explanations for
the contents of the
technical and financial
elements
– basis of equality amongst
the qualified Investors
2/26/2016 15
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi
Challenge of
disqualification
•Disqualified Investors
can object to the
Prequalification
Committee’s decision.
•An objection shall be
submitted to the PPP
Central Unit to study and
issue its binding decision.

16. Approval of draft
contracts
– Line Ministry has the
right to :
• approve third part
contracts to be entered
by the Project company
for the delivery of the
project works & services
• Object such
appointments
2/26/2016 16
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi
Challenge of
disqualification
•Disqualified Investors
can object to the
Prequalification
Committee’s decision.
•An objection shall be
submitted to the PPP
Central Unit to study and
issue its binding decision.

17. Kenya
“A center of
PPP Expertise”
• PPP Policy November 2011
• PPP Act 2012
• A Project Facilitation Fund to provide an avenue for
government support to PPP projects.
2/26/2016 17
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi

18. Project Implementation Structures
• PPP Nodes
– responsible for the development
and management of PPP projects;
• The PPP Unit
– domiciled at the State
Department responsible for
Finance,
– a national centre for PPP
expertise;
– develop and distribute PPP
Operating Guidelines and Manuals
2/26/2016 18
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi
•PPP Committee -
responsible for
developing and
implementing PPP
policy initiatives;
•Cabinet-Final
approval but delegate
to PPP Committee

19. The Cycle
• Project Identification, Selection and Prioritization
technical profile, operations, service delivery targets,
and future income and costs (Scooping)
• Project Preparation and Appraisal: a full investment
appraisal
• Project Tendering
• Project Negotiation
• Project Monitoring and evaluation- The CA to establish
clear procedures for monitoring. The PPP Unit and the
PPP Committee has an oversight role
2/26/2016 19
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi

20. Competitive dialogue
• A contracting authority may, hold a competitive
dialogue with each bidder to define technical or
financial aspects of the project
• may require a bidder to submit to the authority a
technical and financial non-binding proposal for
discussion
• held with each bidder on the basis of equality and
transparency.
2/26/2016
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi
20

21. Privately Initiated Investment
Proposals
• Limited to projects that demonstrate:
– genuine innovation and/or
– use of proprietary technology,
– economic viability and
– satisfy the principles of public interest
2/26/2016 21
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi

22. Privately Initiated Investment
Proposals
• A contracting authority, before negotiations:
– prescribes a criteria against which the outcome of
negotiations shall be evaluated;
– submits the proposal to the PPP unit for consideration
and recommendation
– apply for approval from the Committee to negotiate the
contract
– conduct the negotiations and award the tender
• Key issues: VFM, Affordability, Risk transfer
2/26/2016 22
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi

23. Knowledge skills & Altitudes for PPP
project delivery
• Project Development skills-
– Privately financed infrastructure project structuring skills
– Go to Market with a Solid Transaction Structure
• Economic and financial appraisal skills
– Evaluating traditional vs. PPP
• Communication skills: with general public
• Procurement/ evaluation
– Sensitivity to the objectives, political environment, public
• Technical skills- understand the technical details
2/26/2016 23
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi

24. Knowledge skills & Altitudes for PPP
project delivery
• Negotiations -to finalise agreements
• Contract management skills
– Reporting- on matter of general policy and projects
– Dispute resolution
• PPP transaction/ process management skills
– Approvals, what stages, whom.
• Monitoring -Implementation and compliance
• Legal & regulatory skills
• Experience in dealing with the private sector
• Market sounding: check with lenders to understand
their perspectives of their own market challenges
2/26/2016 24
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi

25. Monitoring skill…
• Monitor, transparency and accountability of PPP
unit work / State Authority / PPP partner
– Audit of PPP procurement processes
– Audit of PPP project performance – independent
reviews, Director of Audit
• Effectiveness / performance audit
– to see if projections regarding PPP procurement against
traditional procurement were realised
2/26/2016 25
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi

26. The state of readiness of
state Institutions
• Establish PPP policy and Legal frame work
– Need for clear mandate for state institutions
– Draft PPP contract
• Strong National Political Backing
– Clear Public Sector Commitment
• A realist pipeline of bankable projects
– Sound understanding of the needs of a particular sector
– be Bankable for Private Sector financing i.e. large, attractive size
• Establish clear ownership ( risks resistance by CAs)
• Adequate capacity for the PPP unit and the Nodal agencies
– To carry out rigorous project feasibility
– Risk-allocation structure must be clear
2/26/2016 26
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi

27. The state of readiness of
state Institutions
• Access to local and international financing
institutions
• Affordability by Govt.
– Creditworthiness to make unitary payments
• Project development fund ( revolving fund)
• Viability Gap fund
• Communication with stakeholders
• Professional and effective monitoring of the
private party
• Proper advisory support
2/26/2016 27
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi

28. Reorienting the Public sector
• Capacity Building, PPP training
• Targeted seminars
• Role of advisors
• Political will
• Political Champion
• Public awareness
• Low hanging fruits
2/26/2016 28
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi

29. Working with the private
sector
• Project preparation- project scooping
• Procurement
– Technical specifications
– VFM
– evaluation
• Negotiation
• Implementation/ construction phase
– Reporting
– Technical issues/ standards
- Payments
- Post implementation monitoring
• Contract Compliance
– Legal
• Streamline process - speed
2/26/2016 29
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi

30. PPP Programme initiation
and Planning
• Legal framework (Law and Policy)
• PPP guidelines
• Institutional framework
• PPP sector nodes
• Personnel Capacity;
• PPP expertise, legal, finance, economic, ‘sector specialists”
• PPP advisors
• Institutional roles & approvals
• Financial resources for:
– administration,
– project development &
– monitoring
2/26/2016 30
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi

31. PPP Project preparation
• Project pipeline Selection
– Potential candidates for further analyze
– Not too small, clear private sector interest
– conceptual stage
– limited information
– Project Desirability (public interest)
• APPRAISAL -structured, prepared, Ranking & Concept Paper
– Project Achievability/ deliverable output
– Project Ability (Policy and Program): Is the it a priority
– Project Viability (Financing)
– investment size and useful life
– Sequencing- low hanging fruits first
• APPROVAL
– final approval to proceed to implementation i.e. Developing a Business
Case
2/26/2016 31
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi

32. PPP unit
• Many countries with a successful
PPP programme have created a
dedicated PPP unit.
• Roles of PPP Units include:
– Regulating the PPP process
– Promoting PPPs within Govt.
– Helping agencies to implement PPPs
– Providing channels to investors
– Help in monitoring
2/26/2016 32
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi

33. Business case Development
• Assess if the project:
• Meets government’s policy sector objectives
• Is ‘feasible’: technically, financially, economically,
environmentally,
• Is ‘deliverable’- output standards;
• Is ‘affordable’ to the public authority
• Is ‘bankable’ to the private investors & lenders
• Management & Contract enforcement capability.
2/26/2016 33
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi

34. Plan
• for:
• Procurement
• Implementation
• Post construction
• Contract expiration
2/26/2016 34
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi

35. Success factors
• Stable macro economic environment
• Willingness of the Public Client to accept innovative solutions
• A detailed contract
• Professional and effective monitoring of the private contractor
• Selection of appropriate project candidates
• Good detailed preparation:
– Clear business cases,
– clear output specifications,
– A PPP project procurement team
• Proper advisory support
• A well structured, transparent, competitive PPP procurement process.
• A clear and consistent methodology for evaluating FVM
• Proper monitoring of the entire operational phase.
• A determination by all parties and stakeholders to make the PPP work
• Management of contingent liabilities
2/26/2016 35
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi

36. Importance of legal, institution;
fiduciary, financial framework in
Capacity building
• legal
– Sets Objectives to build capacity
– Sets Institutions for targeted capacity
building
– Gives legal mandate of the institutions
– Gives investors confidence to predict the
process
– transparent, and competitive procurement
• Institution
– Allows for building of a team of professionals
– Capacity building to include the private
sector to understand PPP framework before
they invest.
2/26/2016 36
Presented by: Mrs Audrey Mwala, Director
Project Finance and Risk Analysis, The
PPPC, Malawi
•Fiduciary
•Reporting provides accountability
excellence
•Approvals provide national will
•Audits provide confidence and due
respect of the process
•Financial
•Allows capacity building to happen
•Public awareness programmes
•Allows project preparation
•Allows PPP payment & investment