In Nepal most pre-PPPUE PPP's have failed due to inadequate feasibility studies, legal arrangements, business plans and most importantly a lack of partnership spirit between the parties involved. To equip the private sector to engage in mutual partnerships, the programme extended its capacity building focus to include the private sector and in particular the private sector associations (FNCCI and local level CCI's). This has had two positive effects. Firstly the private sector has become confident with the PPP approach and has taken a prominent role in the identification and formulation of PPP projects on the ground. There is a general good understanding of the need for sustainability of the programmes and an emphasis on the long- term commercial viability. In addition most private sector parties have expressed interest in promoting corporate social responsibility and thus assured the pro-poor focus of the projects. Secondly as several of the capacity building activities have been cross-sectoral, the public and private sector participants have been working together prior to the project identification and formulation, increasing the understanding of 'the other side' and formed the basis for the now tight partnerships between the two.
Furthermore, limited attention was initially given to the finance side of PPP's and financial sector involvement. This was also due to the fact that previously there has not been an interest from the financial sector to get involved in PPP financing. However, as the programme progressed in the first phase it became apparent that there were limited funding options available for the private contractor, which eventually limited the scope of some projects. Consequently, the programme will in its second phase undertake a financial sector review together with the Ministry of Finance to map funding sources and challenges for PPP's in Nepal.