Institutional due diligence is an important aspect of project development. This process determines the institutional aspects of a PPP project and how much capacity the government has to handle the project. The main elements in institutional due diligence include:
• The conditions and requirements as required under the legal and regulatory frameworks and how the proposed project can meet these conditions and requirements.
• Identifying the relevant government policies and assessing the likely implications of such policies for the proposed project.
• As provided in various guidelines, laws and rules, which other government agencies and stakeholders need to be involved in the process and what roles they will be required to play in project development and approval.
• Assessing the in-house capacity of the implementing agency and other relevant government agencies in undertaking various tasks related to project development and implementation.
• Specifying the role of the transaction advisor.
The implementing agency can undertake an assessment of these aspects and determine how they may be reflected in project design and planning tasks.