Globally, governments are accountable for the development of infrastructure and the delivery of basic services in an affordable and inclusive manner. The ability of governments to nurture a conducive enabling environment for infrastructure investment has often been found to be a key differentiator between countries that successfully scale up infrastructure and those that face challenges in doing so.
Although Indonesia’s PPP regulations date back to 2005, initially the number of actual project transactions between the government and private sector was very limited. The private sector’s interest in Indonesian projects was constrained by three main factors; the low quality of project preparation, low financial feasibility of projects (particularly those related to the determination of tariffs) and uncertainty related to the political risk of projects.
The Inter-American Development Bank (IDB) is working with other multilateral development banks (MDBs) and international organisations (IOs) to define common mechanisms and policies to tackle the infrastructure gap in Latin America and the Caribbean (LAC) by attracting more private investment. This paper is the first step towards utilising the resources offered by PPFs for infrastructure development projects in LAC, and applying these useful tools to another critical region.