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Developing Public-Private Partnerships for Sustainable Energy. REETA Planning Workshop , Georgetown 11./12. February 2014. PPP Definition.
REETA Planning Workshop , Georgetown 11./12. February 2014
A Public–Private partnership (PPP) is a government service or private business venture which is funded and operated through a partnership of government and one or more private sector companies. This leads to a business relationship between a private-sector company and a government agency for the purpose of completing a project that will serve the public.
Public-private partnerships can be used to finance, build and operate projects especially in public infrastructure including the energy sector.
Financing a project through a public-private partnership can allow a project to be completed even under difficult governmental fiscal conditions. Thus, partnership between public authorities and the private sector can allow for a better and less costly provision of services compared to public sector provision of service alone.
Governmental contributions to a PPP may be in kind, for example the transfer of existing assets. In projects that are aimed at creating public goods and services the government may provide a capital subsidy in the form of a grant, so as to make it more attractive for private investors.
The government may also support the project by providing revenue subsidies, including tax breaks or by guaranteeing annual revenues for a fixed time period.
Significant and sustainable development can only be realized with the private sector’s participation. The private sector is the main engine for economic growth and development. PPPs allows entrepreneurs to set economic activity in motion by bringing resources together to produce goods and services. Through PPP the private sector can bring in additional funding for public projects, besides valuable technical and managerial experience.
A Public-Private Partnership may take several forms:
A governmental agency is a “partner” (shareholder), State provides a concession to private party to render a service and use public property or natural resources (roads, water, land, geothermal resources).
The State provides financial support to the project undertaken by a private party (pays for part of the investment or guarantees certain payments).
PPPs may involve different contractual modalities and several sources of revenue management, concessions, licenses, user fees, government periodic payments (PPAs) or lump sum payment.
Project Finance Structure (vs. Corporate Finance)
MADDENS ESTATE WIND FARM, NEVIS, W.I.
Developer: WINDWATT Inc.
Technical Studies: wind studies, EIA, Geo tech etc.
Capacity of 2.2 MW on government leased land of 2 acres, 8 – 275 KWh Turbines to supply 1.1 MW to 1.6 MW, commissioned in July 2010, Wind Resource Contract (NIA & Windwatt)
Power Purchase Agreement/PPA (Nevlec & Windwatt) – signed in 14 July 2009: 1st in OECS
Waste to Energy