Sustainable Development Success Stories

Public Private Partnerships for the urban environment (PPP)

Location Global Coverage (expected to establish project activities in approximately 50 countries in five years).
Responsible Organisation A system of networks and partnerships with a variety of actors, including: industry (through a Memorandum of Understanding with the World Business Council for Sustainable Development WBCSD that commits its members to provide technical expertise and training to developing countries on a pro bono basis), academic institutions (through two networks, one led by Yale University that includes a number of research and training institutions in developing countries, and one led by the Massachusetts Institute of Technology - MIT that includes a number of technological institutions in developing countries), NGOs, and local governments (which are involved in project implementation at the country level), and finally, local and international private sector partners that enter into co-ownership and co-responsibility arrangements in urban projects throughout the developing world.
Description The Public-Private Partnerships for the Urban Environment is a project initiated by the United Nations Development Programme (UNDP) in collaboration with the Business Council for Sustainable Development and the independent not-for-profit Swiss association Sustainable Project Management (SPM). The pilot phase of the project initiated in 1994 and became fully operational in 1996.

The project seeks new and innovative solutions to the problem of deteriorating environmental quality and quality of life of cities in developing countries, by promoting involvement of the private sector in urban environmental problem solving through investments in environmentally sound and eco-efficient programmes, projects and technologies in urban settings around the world.

The main project activities include:

  • Providing resources for the identification of environmental problems that can be turned into viable business opportunities;

  • Providing resources for the establishment of businesses resulting from the first activity;

  • In collaboration with a network of research and academic institutions around the world, undertaking research, policy analysis, training and capacity building activities in support of the PPP;
    In collaboration with industry (which shares its expertise and training free of charge), providing technical support to industry in developing countries for the purpose of improving environmental performance.

Issues Addressed Freshwater; Waste Management and Energy.
Results Achieved The results achieved in the short life of the project (1996-1998) include:
  • Showing an innovative implementation methodology: the PPP experiments with a method of implementation that is based on leveraging existing institutional infrastructures, existing financial resources, and existing programmes. In this manner, the PPP is able to work with a very small full time staff that has the responsibility of coordinating the tasks of the various partners operating throughout the world. Rather than creating new units or departments, the PPP works with established units at UNDP, Country Offices, and the staff of its partners institutions.

  • Showing how small seed resources can leverage amounts of money many times their size: the PPP experiments with a method of resource mobilisation that is more in line with the decreasing resources of ODA and the catalytic role that UN should play more actively. With a modest $10 million fund, the PPP is on its way to establishing some 50 companies with investment of some $20 to $30 million, thus mobilising some $1 billion, over the next few years, of new resource in the areas of water, waste management and energy for the cities in developing countries.

  • Showing that industry is more willing to help than is readily recognised: the PPP is carrying out a number of technical assistance and training using free resources and thus, saving scarce resources for other development activities.

  • Showing that partnerships and networks are the most effective way to pool complementary resources and skills: the PPP has been able to get under way, in a very short period of time, a number of investment, research and training activities of global coverage. This could not be done through the traditional means of implementation.

Lessons Learned Some of the lessons learned include:
  • Many urban environmental problems in developing countries remain unsolved, not because the solutions are unknown or because the municipal authorities are unwilling to try to solve them, but because governments lack the managerial skills, the technology and the financial resources necessary to achieve success. In partnership with the right private sector partners, the municipal authorities are succeeding in tackling some of the most difficult problems on their cities.

  • There are many urban environmental problems that can be easily turned into a viable business opportunity to attract private sector participation. Many of these remain unidentified because identifying them requires making some initial pre-transaction/risk investments that many private sector and government actors are unwilling to make.

  • Collaboration among governments, private sector and non-governmental organisations requires patient, labour intensive work to persuade all the actors that it is worth working together. Designing win-win situations for all helps reduce cultural barriers that exist among these groups.

  • Partnerships between public and private sectors bring the best of both worlds to a project: the dynamism, managerial talent and technological innovation of the private sector, and the social responsibility of the government.

  • It is not necessary to spend large sums of ODA money to tackle major development problems. With the right selection of project situations and partners, ODA can actually mobilise external resources in support of sustainable development.

  • Partnerships and networks are more effective in multi-purpose, multi-task, multi-site projects than the traditional implementation arrangements used by development agencies. The most difficult challenge is that of maintaining cohesiveness and good coordination, challenges that are now being addressed through electronic communication.

Contact Luis Gomez-Echeverri
Director and Founder Public-Private Partnerships for the Urban Environment
United Nations Development Programme
Tel. (212) 906 5767; Fax (212) 906 6973
E-mail: luis.gomez-echeverri@undp.org
Website: http://www.undp.org/ppp/