Marios Tannousis - Public-Private Alliances towards Growth & Investment

Start with a KPI-driven PPP playbook: define three core outcomes–private finance mobilized, local employment, and project delivery speed–and set 12-month milestones. Assign a dedicated oversight unit and publish quarterly progress dashboards.

In practice, Marios Tannousis champions alignment through a clear governance model, transparent procurement, and practical risk-sharing agreements. Establish joint steering committees with ministry and investor representation and codify decision rights by project phase.

Data from pilot programs in transport, health, and energy show typical deal values ranging from $100 million to $2 billion, with 60–75% of milestones met on time and procurement cycles shortened by 12–18%.

To scale impact, apply a three-tier framework: projects level (financial structuring), program level (portfolio risk mgmt), and community value (local skills and SME inclusion). Marios recommends combining performance-based payment mechanisms with transparent audit trails and public disclosures to build confidence among lenders and citizens.

Marios Tannousis’ PPP Framework: Core Tenets towards Growth and Investment

Launch a 12-month PPP pilot in transport, energy, or water with clearly defined KPIs, a risk-sharing framework, and a transparent procurement process to attract competitive bids and lock in accountability from day one.

Define the value proposition early, map public benefits to private incentives, and allocate risks to the party best positioned to manage them. Tie payments to milestones and measurable outcomes to ensure performance-driven delivery.

Structure finances with blended finance tools: concessional debt, guarantees, and equity participation that align private returns with public priorities. Build in currency hedges and sensitivity tests to protect affordability under shifts in cost or demand.

Strengthen governance through an independent PPP unit, standardized tender templates, and clear contract terms. Publish performance dashboards and schedule independent audits to ensure transparency and reduce scope for disputes.

Develop local capacity by linking supplier development programs to project milestones, setting local content goals, and offering training to workers. Track job creation and small-business participation as part of contract reporting.

Identify and mitigate risks upfront with a formal risk register, adaptive clauses for demand or revenue shocks, and a clearly defined termination framework. Use stabilization mechanisms where necessary to minimize disruption to service and financial viability.

Plan for long‑term asset stewardship: assign maintenance obligations, schedule periodic asset condition assessments, and define end-of-concession handover requirements. Ensure user charges are reasonable and linked to service quality, with a transparent tariff-setting mechanism for future adjustments.

Choosing Public-Private Models: Practical Fit towards Growth Projects

Start with a rapid fit test: align project cash flow, asset ownership, and risk with one PPP format–concession, joint venture, design-build-finance-operate (DBFO), or lease-and-transfer–and pick the option that lowers the cost of capital while meeting policy goals.

Apply a five-point fit check: 1) strategic alignment with growth priorities, 2) financial viability and budget certainty, 3) risk transfer capacity to private partners, 4) governance, accountability, and performance measurement, 5) clear exit or transfer terms and asset custody arrangements. For typical growth projects, target a private hurdle rate of 8–12% IRR, with public budget exposure limited to 5–15% of total project cost as contingency. If demand risk is predictable and user fees can cover lifecycle costs, concession or DBFO with performance-based payments tends to yield faster delivery and better lifecycle maintenance. For ventures requiring strong private-capital participation and shared learning, a joint venture provides co-ownership and shared risk management. For government-owned and long-lived assets with policy control needs, lease-and-transfer can accelerate deployment while preserving public oversight at the agreement milestones.

Model	Primary Risk Allocation	Suitable Project Type	Funding Structure	Governance & Metrics
Concession	Private bears demand risk and lifecycle costs; public handles regulation	Active infrastructure with user fees (toll roads, airports)	Private capital; public payments or availability payments	Clear milestones; performance-based SLAs; annual audits
DBFO	Private designs, builds, finances, and operates; some residual risk retained by public	Large-scale assets with long lifecycle (ports, campuses)	Private funding; milestone and availability payments	Lifecycle maintenance KPIs; output-based payments
Joint Venture	Shared equity and risk; governance agreed	Mixed-use or cross-sector projects	Shared financing; public and private contributions	Joint board; transparency on financial and performance targets
Lease & Transfer	Operational risk to private operator; asset remains under public policy framework	Public assets needing rapid modernization	Private operator leases; public receives periodic payments	Transfer milestones; asset condition assessments

Model Fit Criteria

Revenue certainty and demand risk guide model choice: tie payments to measured outputs or usage, and prefer concessions or DBFO when fees or availability payments are reliable. For uncertain demand, favor structures with shared upside or stronger public guarantees. Risk transfer capacity should place high-uncertainty operational risks with the private partner, while keeping policy, safety, and licensing responsibilities in public hands. Governance demands clear performance indicators, independent audits, and baseline service levels. Exit terms and asset custody conditions must be defined, with a path for transfer at contract end or milestone completion to avoid long-term ambiguity.

Implementation Roadmap

0–3 months: conduct market sounding, assemble risk register, and estimate cost of capital. 3–6 months: design procurement strategy, draft contract terms, set KPIs, and prepare financial models. 6–12 months: run a competitive tender or dialogue, evaluate bids, and select partner. 12–18 months: finalize contract, secure permits, and align procurement timelines with construction or transition. 18–24 months: begin operations, monitor performance, and adjust terms based on actual outcomes.

Public Sector Readiness: Guidelines, Systems, and Capabilities towards PPP Delivery

Set up a dedicated PPP Unit with a legislated mandate, a stable annual budget, and a staffed team of 12–20 to manage governance, procurement, risk, finance, and legal work. Ensure a rotating pool for cross-agency coverage and a 6-month onboarding plan for new hires.

Define clear decision rights and gates: project initiation, due diligence, evaluation, and award. Create a risk matrix rating political, regulatory, and financial risk on a 1–5 scale, with thresholds that trigger independent review and, for high-risk cases, ministerial oversight so decisions stay aligned with public interests.

Launch a central PPP data platform with five modules: project registry, risk register, financial model library, contract templates, and performance dashboards. Ensure data interoperability with budget offices and audit trails, plus role-based access and e-signature support.

Adopt standardized procurement templates and a staged timeline: 60 days for pre-qualification, 90 days for response to RFP, and a 60-day evaluation window, followed by an award. Maintain a publicly available bidding register and publish short-listed bidders' scores and contract terms after award.

Use a standards-based financial model library with transparent risk allocation: private sector bears construction, availability, and revenue risks; government retains policy and regulatory risk. Require an independent viability assessment for every project with a three-tier review–technical, financial, and social–plus clear revenue terms and limits on contingent liabilities to protect public funds.

Invest in skill-building: align training with job families, require 40–60 hours of PPP-focused coursework per staff per year, and implement biennial cross-ministry secondments of 3–6 months. Establish a formal career path with annual performance reviews tied to pipeline progress and contract delivery quality.

Institute monthly dashboards tracking procurement timeliness, competition levels, and contract performance; publish annual audits and a public impact report. Create a structured stakeholder engagement plan including public consultations and private sector briefings on upcoming deals, plus a feedback channel for communities affected by PPP projects.

Embed a continuous improvement loop: after project close, run an ex-post review, capture lessons, and update standards. Link the readiness program to the broader investment strategy to align with growth and jobs targets.

Private Sector Engagement: Risk Sharing, Collaboration, plus Financing Structures

Adopt a two-layer risk-sharing design with 20–30% first-loss capital provided by public sources to absorb early losses, paired with private senior debt or equity to finance most of the project cost. This mix lowers lender capital charges and unlocks private capital for critical sectors.

Financing Structures that Mobilize Private Capital

• Partial Credit Guarantees (PCGs): public backstop covering 15–25% of loan exposure to attract bank lending; reduces collateral requirements and speeds up approvals.
• First-Loss Facilities: public funds absorb 10–20% of potential losses, motivating private lenders to participate with senior debt or equity stake.
• Senior Debt with Public Backing: lowers interest rates by 50–120 basis points and extends tenors by 5–10 years, suitable for core infrastructure and essential services.
• Mezzanine Financing: 5–15% of project funding with higher coupons (6–12%) and upside potential; bridges equity gaps for higher-risk segments.
• Concessional Loans and Grants: subsidized rates reduce capital costs by 1–3 percentage points, targeted to resilience and service delivery outcomes.
• Equity Co-Investment: public funds participate as minority investors to align incentives, strengthen governance, and share upside beyond debt service.
• Securitization and Credit-Enhanced Notes: pool project cash flows to attract institutional investors; requires robust risk-sharing and accurate data.
• Output-Based Payments or Performance-Linked Disbursements: tie disbursements to verifiable results (e.g., service delivery metrics), improving revenue predictability for lenders.

Governance and Collaboration Mechanisms

• Joint Investment Committee: include public and private members with clear voting rules, defined escalation paths, and quarterly decision cycles.
• Common Due Diligence Framework: standardized credit, ESG, and technical assessments to speed approvals and ensure consistency across deals.
• Shared Data Room and Project Dashboard: real-time tracking of risk ratings, milestones, and cash flows; monthly updates to participants.
• Policy Risk Mitigation: currency hedging where needed, reserve accounts, and currency diversification to reduce cross-border exposure.
• Aligned Procurement and Implementation: pre-approved vendors, framework agreements, and joint procurement to lower costs and ensure quality.
• Pipeline Development: target a 3-year slate of 15–20 prospective projects in priority sectors, with milestones for private readiness and public support.

Monitoring, Evaluation: Impact Metrics within Global PPP Initiatives

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Implement a compact set of impact metrics at project launch and tie payout milestones to progress against them. Key metrics include: financial viability metrics IRR, NPV, DSCR; value-for-money assessment; service delivery indicators such as outputs delivered, coverage, and user uptake; outcomes like reduced travel times, improved access to services, and reliability of service; and social-environment indicators including jobs created, local procurement share, emissions reductions, and resilience indicators.

Adopt a theory of change and a results-based management framework to map inputs through activities to outputs and to measurable outcomes. Link indicators to contract provisions and ensure a clear chain from investment to service impact, so evaluation findings drive accountability and learning across partners.

Establish data collection and verification: implement dashboards with timely data, calibrate indicators, and use independent verification for key KPI targets. Prioritize data quality, interoperability across systems, and privacy safeguards to sustain stakeholder trust.

Governance and reporting: set quarterly reviews with government, private partners, and civil society; maintain a transparent impact appendix with methodology; ensure data privacy and security, and publish annual insights for public accountability and investor confidence.

Evaluation cadence: baseline established, midline after year 2, final evaluation at project end; apply randomized or quasi-experimental designs where feasible; include cost-benefit analysis to quantify net value created for users and communities.

Cross-cutting effects: track access for underserved groups, gender parity, procurement from local firms, training outcomes, and small supplier inclusion to reflect inclusive growth and local capacity development.

Action steps for managers: design the dashboard, assign data owners, schedule reviews, align KPI targets with contract incentives, request independent audits, and publish results annually to inform future PPP selections and contracts.

Policy Design: Scaling Public-Private Partnerships in Emerging Markets

Establish a dedicated PPP policy unit within the ministry of finance and publish a five-year pipeline with clear milestones, timelines, and evaluation criteria to guide private participation.

Allocate risks to the party best able to manage them: assign construction and operating risks to the private partner while preserving revenue-stability and regulatory risk with the state; require measurable performance targets and payments tied to verified outcomes.

Design the finance stack with blended instruments: combine concessional funds, guarantees, and project finance to improve bankability; require currency risk hedges for cross-border projects and a transparent tariff-setting approach with predictable indexing and adjustment rules.

Standardize procurement and governance: implement model concession agreements, pre-qualification criteria, and a public data portal; establish an independent evaluation unit to score bids using lifecycle cost and resilience considerations.

Incorporate clear regulatory and fiscal safeguards: create budgetary controls for contingent liabilities; require an ex-ante fiscal impact assessment and a central register of PPP commitments; set up transparent dispute resolution mechanisms that protect lenders and sponsors alike.

Build the project pipeline with readiness gates: target 20–40 projects across transport, energy, and utilities in the initial five-year phase; require technical, financial, and land-use clearances before bidding to ensure a steady flow of bankable opportunities.

Track progress with concrete metrics: deploy quarterly dashboards measuring value proxies, financing costs, delivery timelines, and maintenance performance; publish results to attract capital and inform policy adjustments.

Strengthen risk management and resilience: establish macro buffers and contingency funds for shocks; encourage lenders to use reserve accounts and stress-test scenarios for currency and revenue volatility.

Invest in local capacity and partnerships: deepen supplier development, training, and data analytics to broaden domestic participation; collaborate with multilateral development banks for technical advisory and knowledge transfer.