Public Private Partnership

TYPES AND VARIATIONS OF PPPs:

PPP types depending on specific factors.

Source of funds for the private partner´s revenues: user-pays PPPs (mainly based on charges to users) versus government-pays PPPs (mainly based on government payments for the service).

Ownership of the PPP company or Special Purpose Vehicle (SPV): There are conventional PPPs (100 percent private ownership), institutional PPPs (publicly owned with 100 percent public ownership or under a JV or empresa mixta scheme with the public party controlling the PPP company), and other JVs or empresas mixtas.

Scope of the contract and/or object of the contract: Infrastructure PPPs or PPPs that include significant capital investment, where the main objective is developing and managing infrastructure over the long term; integrated PPPs when, in addition to the infrastructure, the private party is granted the right and obligation to operate a service; and O&M PPPs or service PPPs when there is neither capital investment nor development of new infrastructure by the private partner.

Relevance of private sector financing: Co-financed PPPs (PPP schemes where there is a material portion of public finance, usually in the form of grants), versus conventional PPPs.

PPPs may also be distinguished based on the past use of the site. From the perspective of the investor industry, the following alternative definitions are common.

Greenfield projects: Project investments that relate to a DBFOM that is recently awarded or under construction.

Brownfield projects: Project investments in infrastructure assets that existed before the time of procurement or that were previously greenfields, but are in operation at the time the investment is made.

Yellowfields or secondary stage: PPPs where the investment is related to significant renewals, refurbishment or a substantial expansion of the existing infrastructure.

 

A PPP with equity participation by the public party may be legally categorized as an empresa mixta, depending on the jurisdiction. Commonly, a JV or empresa mixta scheme will imply a significant participation of the public party in equity and significant participation in management, while a mere public equity participation, with no strategic influence in the PPP company, is not regarded as a JV by this Guide.

There are alternative uses of the terms Greenfield and Brownfield.