Making PPPs investment-ready

Public-private partnerships promise a great deal: new infrastructure, shared risk, and private capital working alongside public ambition. Yet many proposed partnerships stall between announcement and financial close. The vision is sound, and the project still fails to attract investors, lenders or a willing operator.

In our experience the deciding factor is readiness. Investors commit when a project can answer their questions with evidence, and those answers have to be built before the project goes to market.

Bankability is decided early

The choices that make a project bankable are mostly made at the feasibility stage: the scope, the site, the phasing, and how risk is shared between the parties. An investment-grade feasibility study settles those questions in a form a lender or investment committee can test, and gives every later stage of the transaction a firm base.

That is why we treat the feasibility study as the foundation of the transaction. Its quality shapes every decision that follows, so it deserves the budget and the expertise to match.

Demand you can defend

Every partnership rests on a view of who will use the asset and who will pay. Investors examine that view closely. Demand assessments should draw on local data, test the assumptions behind each projection, and show what happens to the project under weaker scenarios.

Where the asset serves a public purpose, such as health manufacturing, power or transport, the analysis should also show how public policy and regulation support demand over the life of the contract.

A structure each party can live with

A sound structure allocates each risk to the party best placed to manage it. Construction risk usually sits with the builder, demand risk depends on the sector, and policy risk often stays with government. When one party carries risks it cannot control, it prices them heavily or walks away.

Clarity on incentives, land, approvals and payment mechanisms gives investors the confidence to price fairly. Joint ventures and phased models can help where the full scheme is too large to finance in one step.

Procurement that stands up to scrutiny

How advisers and partners are chosen matters as much as who is chosen. On complex assignments we favour a two-stage process: an open expression of interest to test the market and screen capability, followed by a detailed request for proposals from a shortlist.

Weighting the evaluation towards technical quality, with a smaller weight on price, reflects what is at stake. Clear criteria, uniform documents for every bidder, and separate advisory, evaluation and approval roles keep the process fair and defensible under audit. Investors notice when a project has been procured this way.

Prepare the market before you go to it

A project that arrives in the market fully formed, with no prior conversations, often meets cautious investors. Early, structured soundings with developers, lenders and development finance institutions test the proposition before it is fixed, and show where the structure needs to change.

Preparation also means making diligence easy. A well-organised data room, with the feasibility study, land documents, approvals, financial model and draft contract terms in one place, saves weeks for every bidder and signals a serious sponsor. A realistic timetable, published early and kept to, does the same.

Finally, the public sponsor needs its own house in order. Investors look for evidence that the relevant ministries, agencies and approval bodies support the project, and that the commitments government makes, such as land, permits or payment guarantees, can be honoured.

Governance that carries through

A partnership runs for decades. Investors look for a contracting authority with the mandate and capacity to manage it, clear decision rights, and regular reporting once the asset is operating. Building that governance into the project from the start gives the partnership a stable base to deliver on.

Investment-ready partnerships are built step by step, with evidence at every stage. If you are preparing a project for market and want to test its readiness, we would be glad to help.