Put simply, a PPP is the provision, long-term operation, and maintenance, of public infrastructure by the private sector. However, this description also fits a range of other activities, including privatised utilities. The Bank has no formal definition of PPP itself so, for the purposes of the evaluation, a definition was established in consultation with the Bank's operational directorates: "A PPP should: have been initiated by the public sector - involve a clearly defined project - involve the sharing of risks with the private sector - be based on a contractual relationship which is limited in time - have a clear separation between the public sector and the Borrower." This was the definition used to identify the portfolio of relevant projects (cf. §3.1) and potential projects to be evaluated.
During the evaluation, Eurostat presented guidelines on the accounting treatment of PPP projects. They did not provide a PPP definition per se; rather a set of criteria to define whether an investment should be "on" or "off" the national balance sheet. To be off-balance sheet, a PPP investment must involve the transfer of risk to the private sector of both project completion and either project use or project availability. All except one of the projects evaluated in-depth would have satisfied the Eurostat tests. However, it should be noted that the Governments concerned have not necessarily accounted for the projects in this way. The Bank has recently published a paper: "The EIB's role in Public-Private Partnerships (PPPs)3 which gives a useful summary of this issue, as well as a general overview of EIB involvement in lending to PPPs
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3 the paper may be found at www.eib.org/publications