Public Private Partnership (PPP) law will reinforce attractiveness of PPPs in Botswana
PPP Coordinator at Ministry of Finance, Boniface Mphetlhe, recently told BOPA that the provision of policy and legislation to guide the implementation of PPPs, as well as Public Finance Management (PFM) Act aimed at guiding investment in PPPs were some of key elements that provide a conducive and attractive environment for PPPs.
In addition, he said, legislative framework, political will, proper project selection and planning, government commitment, appropriate risk allocation, stakeholder engagement, technical capacity and the appropriate structuring of projects were other key factors needed for successful PPP projects.
Moreover, Mphetlhe said there were indications that the availability of a pipeline of PPP projects would give additional impetus to the government’s PPP commitment, which was expected to give the private sector the confidence to engage in PPP projects.
He said over the last five years, the Ministry of Finance had developed a pipeline of 17 projects in consultation with line ministries across energy, water, transport and building infrastructure sectors.
Mphetlhe said these projects were also contained in the National Development Plan 11 as well as in the Transitional National Development Plan approved by Parliament in November 2022.
“Attracting PPPs also calls for equipping relevant officers with the skills needed to execute PPPs. The PPP unit has previously held capacity building workshops to raise awareness and build expertise in the country for the appropriate management of processes in line with PPP policy,” he said.
Mphetlhe said to enhance and boost PPP attractiveness and its project development and rollout, government needed to ensure continued engagement with stakeholders, and review relevant policies and laws to facilitate the implementation of PPPs.
He said this could be achieved by tapping into the expertise of multilateral organisations to build the required skills to deliver successful PPP projects, especially in the area of project screening and management.
This, he said, would ensure that PPP registered projects are duly processed and packaged for private sector engagement from the onset, adding that at that stage, the magnitude and level of complexity of the projects would be verified.
Mphetlhe explained that in a PPP arrangement, the private party would be responsible for sourcing funding for the delivery of the required project and/or service.
Therefore, the majority of the financial risks relating to the provision of credit are passed onto the private party. However, credit providers would consider budget credibility, country risk perception, sovereign risk and sufficiency of the project cash flows as major risks when deciding to invest, he said.
In turn, these would influence the financial viability of the project, which would take into account the viability gap funding and/or the level of user or serve fees depending on the type of project, Mphetlhe explained.
Among the 17 potential PPP projects that government is working on is the reclamation and treatment of Gaborone wastewater for potable use and Tshele Hills project, which are currently at procurement of private party stage.
Most of projects, including police headquarters expansion, State Theatre, ongoing feasibility study for Serowe magistrate court and BUIST student residence facility projects, are at the procurement of consultant stage.
Source: BOPA
