You miss 100% of the shots you don't take.
-Wayne Gretzky
Governments can and should use public resources to support and enable PPP programs where this provides value for money as an integral part of the PPP framework. Figure 5.1 maps out key opportunities to use public money to mobilize PPP, including through the project development cycle, supporting project preparation, through the bidding process, investment mechanisms that can support project financing and finally contingent support to reinforce and target the incentives fundamental to the project revenue stream and possibly refinancing.
Moving chronologically through the project process, the following are some of the key areas the Government can support to help implement PPP:
• Project preparation-funding and technical support for feasibility studies, hiring and managing transaction advisors.
• Capital grants and in-kind support-for example offsetting construction costs, acquiring land, rights of way, etc.
• Debt or equity into the project-to supplement available private capital.
• Contingent support-to address key project risks, for example guarantees of demand risk, foreign exchange risk or payment risk.
• Revenue support during implementation,-e.g. as key milestones are achieved, possibly as a feed-in/shadow tariff or availability payment.