PPP, an acronym for public-private partnership, is an association between the government and the private companies to finance and fund a public infrastructure project. A PPP financing project will hold the sponsorship of a contract that guarantees the planning, operation, funding, and maintenance of any infrastructure made to serve the general public of a country.
PPP financing: Features of a PPP project
Dedicated to providing public services: The main aim behind the PPP financing is to ensure good quality long-term public services like transportation, electricity, and water supply.
To find high-quality infrastructure projects: In a PPP project, a private company and the government collaborate to create high-class public infrastructures by combining the creativity and technological and innovative ideas of both.
To enable the sharing of resources: For the accomplishment of well-designed and perfectly structured public infrastructures, resources, including that of financial as well as creative sources, are shared between both the parties to produce the best results.
How can PPP financing help to reduce financial risk?
The thing is, the PPP projects are long term projects that are really very expensive, that is why the collaboration between the private company and the government acts as a money saver, and in case any mistakes happen during the implementation of the ideas, the burden of handling its repercussions are equally divided between both the parties and therefore it causes less risk on either of them.