China and the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) have signed a new agreement to strengthen Public Private Partnership (PPP) in the region, with a key focus on improving access to infrastructure services such as water, energy and transport.
PPP involves the private sector in infrastructure development, which can improve quality and address development finance gaps. However, these projects must be properly managed to deliver sustainable development outcomes. ESCAP’s partnership with the China PPP Center will help other countries in the region to develop PPP projects that will contribute to regional connectivity, including as promoted by the Belt and Road Initiative. As China has become the largest PPP market in the region, it is well placed to take the lead in this area.
At a signing ceremony on the sidelines of the 3rd China Public-Private Partnership Financing Forum in Shanghai today, United Nations Under-Secretary-General and Executive Secretary of ESCAP Dr. Shamshad Akhtar highlighted that PPP can be a powerful tool for effectively pursuing sustainable development.
“Developing Asia will have to invest $26 trillion in infrastructure between 2016 and 2030 to effectively support the 2030 Agenda for Sustainable Development. This scale of investment requirement far exceeds the limited public budgets so raising public revenues and leveraging private finance and skills through public-private partnerships is vital,” said Dr. Akhtar.
This substantial investment is equivalent to some 6 per cent of GDP annually, when incorporating the cost of building climate friendly infrastructure, and more than 2 per cent of GDP above the current investment levels. Financing gaps for least developed, landlocked and small island developing countries are steeper at roughly 10.5 per cent of GDP.
ESCAP’s partnership with the China PPP Centre will strengthen a network of PPP units in the region to support exchange of best practices from Asia and the Pacific. It will also facilitate the identification of PPP models for developing infrastructure networks that can contribute to regional connectivity and the 2030 Agenda.
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