A new strategy for PPP advocacy: the project preparation gap

A second study commissioned by the G8 at the 2005 Gleneagles Summit was the Africa Infrastructure Country Diagnostic (AICD), issued by the World Bank in 2010. AICD surprised the development community with an estimated annual infrastructure investment need in Africa at over $93 billion, almost 2.5 times previous estimates. AICD found that current spending from all sources covered only half that amount, leaving an annual funding gap of $48 billion. AICD also downplayed the potential of PPPs to help with such a gap and concluded that more efficient public investment was the real priority. But the G20 argued that the private sector was the only practical source for the needed investment. In a series of studies and policy statements, G20 institutions redefined the investment gap identified by AICD as a “project preparation gap.” In other words, the inability to attract private investment was attributed to faulty project preparation rather than shortcomings in PPP structures or lack of investor interest. This in turn was labeled a failure of existing PPFs. The G20 concluded that PPFs with more funding and expertise were urgently needed. MDBs responded by creating new facilities, but this new generation of PPFs has not facilitated significantly increased levels of private investment.