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WORKING PARTY ON PEOPLE-FIRST PUBLIC PRIVATE PARTNERSHIPS
In this context, the term Impact Investing has emerged as a popular description of private capital mobilised for sustainable investments, often aligned with the SDGs and ESG (Environment, Social, and Governance) considerations. Some institutional investors have already taken active steps to invest more sustainably. As an example, six Danish pension funds have signed an agreement with the Investment Fund for Developing Countries (IFU) to establish a Danish SDG Investment Fund.
What is new and what may change the dynamics of PPPs is the influence of the 2030 Agenda. UNECE recently established a Working Party on PPPs in direct support of the SDGs. The Working Party has proposed the concept entitled People-First Public Private Partnerships (PfPPPs) that seeks to counter some of the criticism levelled at conventional PPPs and to better harness the SDGs. The term “People-First” perhaps says it all: People’s rights and needs are put higher on the agenda. PPPs have often suffered from a lack of values with an exclusive focus on financial criteria. The People-First framework seeks to harmonise the value-for-money and value-for-people criteria by addressing critical challenges facing humanity, such as climate action, lack of economic opportunity and marginalisation. NEW STANDARDS IN PARTNERSHIP WITH CHINA Under the leadership of then Executive Secretary Christian Friis Bach, the former Danish Minister for Development Cooperation, UNECE embarked on a strategic partnership with China on PPPs. Through the signing of two MoUs, UNECE and China will identify ten flagship projects along China’s Belt and Road initiative (BRI), which include substantial infrastructure through Central Asia, the Middle East and Europe. The idea is to support Member States along the BRI with national PfPPP policies and to use the ten projects as best practice models for other countries and regions to follow.
Picture 2 – Signing-ceremony of the Danish SDG Investment Fund, June 2018
BRIDGING THE FINANCIAL GAP - BLENDED CAPITAL AND PARTNERSHIPS
While the SDGs have certainly mobilised more private actors to take part in the development agenda, a massive financing gap in achieving the 17 goals remains. One widely recognised figure estimates an annual financing gap of USD 2.5 trillion in reaching the SDGs. It is against this massive financing gap that public-private partnerships (PPPs) are gaining popularity on the intergovernmental stage. Governments cannot finance the SDGs alone, and therefore the need for more blended capital. Then, UN Secretary-General, Ban Ki-moon, remarked at the 2016 World Economic Forum in Davos that PPPs should be made to work for sustainable development. Goal 17 further validates partnerships as a key tool for implementing the SDGs, which has created an impetus for increased public and private collaboration. UNECE’S PUSH FOR GLOBAL PPP STANDARDS The United Nations Economic Commission for Europe (UNECE) has spearheaded the global discussion on PPPs during the last 15 years, among others, when it opened the International PPP Centre of Excellence (ICoE) in 2011. The ICoE brings together experiences of companies and governments through Specialist Centres, which are set up by governments around the globe within different sectors. It is their responsibility to develop and disseminate best practices in their sector and then transmit these to the UNECE to make them into a standard. There has been a tremendous interest by governments globally to host Specialist Centres and to be a part of developing the political quality surrounding PPPs. Hong Kong has a Specialist Centre on Public Transport, Lebanon has one on Ports, Spain on Smart Cities and Sustainable Cities, and Morocco and India are expected to open Specialist Centres on PPPs in Renewable Energy and Roads, respectively. It is against this high level of intergovernmental participation and involvement that it becomes feasible to talk about global standards.
Picture 3 – MoU signing-ceremony between UNECE and the City University of Hong Kong and Tsinghua University, January 2016
CHANGING DYNAMICS FOR PPPS Observers may pose the question: Is PfPPPs not just business- as-usual using new words? It is a valid question as the PfPPP talk has yet to move beyond the walls of the United Nations. The chief of the PPP Programme at UNECE, Geoffrey Hamilton, emphasises that PfPPPs is a new governance system that incorporates civil society to a much higher degree and listens to their needs. In the draft for standards on Renewable Energy (RE) projects developed by the UNECE, it is noted that Renewable Energy PfPPPs not only achieve clean energy but also improve health, the environment, the local economy, and make the cost of energy affordable to all levels of society.
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