Practice Manager, Solutions and Innovations in Procurement, Governance Global Practice, World Bank
BEIRUT, October 24-25, 2016 - By 2030, about half of the world's poor will live in countries affected by fragility, conflict and violence (FCV), and the governments and development communities will be pressed to find solutions to deliver essential infrastructure services to these populations. This is particularly challenging, because in key sectors including water and sanitation, energy, transport and telecommunications, established utilities often do not serve the needs of the FCV population and large contractors are not available or interested. In this context, engaging small and medium sized enterprises (SMEs) in a public-private partnership (PPP) is an innovative way to provide vital infrastructure services to serve humanitarian needs while also promoting development objectives such as job creation, SME growth, competitiveness, and shared prosperity.
n October, the Bank's Solutions and Innovations in Procurement directorate, Governance Global Practice (SIP-GGP), with support from the Public Private Infrastructure Advisory Facility (PPIAF), held a global workshop in Beirut to present a draft Toolkit on the use of SME-operated PPPs in FCV contexts. Presenters and stakeholders from governments, the United Nations, the World Bank, and the private sector convened to share their experiences in SME-operated infrastructure PPPs and provide practical input in order to maximize the practical utility of the Toolkit.
Critical role of SME-PPPs in FCV context
SMEs are an important vehicle, and at times, the only viable option, for providing essential infrastructural services in the context of prolonged humanitarian emergencies and development challenges. This notion may seem counter intuitive to some; however, it is not the large companies or the large utilities that are interested in, or able to, operate in the FCV especially remote and hard to reach areas. On the other hand, SMEs are well-positioned to step in and fill the void, for example, by acting as operators of small-scale water distribution systems or electricity grids. In addition to providing a stable source of supply and services, SMEs have a better understanding of the local context, which makes them adaptable to volatile political and social situations. As smaller-scale actors, SMEs also promote sustainability and self-sufficiency in local operations.
A Toolkit for finding opportunities in the midst of FCV challenges
The Toolkit aims to increase awareness of the policies and practices that enhance SME opportunities in PPPs among policymakers and managers in FCV states and encourage governments to establish favorable conditions for such initiatives. The Toolkit essentially outlines the most common challenges facing SMEs' involvement in PPPs including policy gaps, legal and administrative burdens, deficiencies of SMEs' and governments' capacity, and access to finance. It also presents different ways to overcome these obstacles (e.g., through innovative financing mechanisms) and delineates multiple elements of an enabling environment for SME-operated infrastructure PPPs in the FCV context.
Listening to "country voices" and practitioners
The workshop brought FCV country experiences to the forefront and covered an extensive range of presentation topics by practitioners as follows:
- Community-based SME-PPPs that provided water services to underserved areas in Somaliland and Puntland (Saher Kemoh, WASH Manager, UNICEF Somalia Support Center)
- Role of a strong political will, fit-for-purpose regulatory framework and transparency in PPP programs (Osama Suleiman, Director of the PPP unit, Ministry of Finance of Jordan)
- Enabling environment for PPPs amidst increased demand, difficult fiscal situation and declining foreign aid (Momin Mansoor, Head of the Central PPP Authority in Afghanistan)
- Critical readiness requirements from the public and private sector perspectives (Junglim Hahm, Regional Program Leader, World Bank PPIAF)
- Introduction of International Humanitarian Infrastructure Partnership, prepared jointly by numerous humanitarian relief and development organizations including UN agencies, the World Bank, and FIDIC, with involvement of the Swiss Government (François Baillon, FIDIC Senior Advisor, CEO Ideagrama)
A timely meeting for policymakers
The workshop was timely for the participants to thoroughly review the contents of the draft Toolkit. From this workshop emerged critical feedback and a detailed set of recommendations, which will be taken into consideration in the final version of the Toolkit. By encouraging focus group discussions on how to infuse practical perspectives that aim to first and foremost attend to the needs of practitioners and beneficiaries, the workshop provided an excellent peer-to-peer knowledge sharing and learning opportunity in an area of growing critical need. The Toolkit will serve as a key instrument for policymakers who will be able to better identify opportunities for SME-operated PPP projects in the FCV contexts.