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THE ROLE OF PPP IN CLIMATE FINANCE: CHALLENGES AND OPPORTUNITIES
Anjali Soni
Abstract:
Public-Private Partnerships (PPPs) are emerging as a promising tool to address the monumental challenge of financing climate action. The vast sums required for clean energy infrastructure, climate adaptation projects, and sustainable development necessitate mobilizing resources beyond just public funds. PPPs offer a framework for collaboration between the public sector and private investors, leveraging the strengths of each to accelerate the transition to a low-carbon future. At their heart, PPPs are collaborative ventures between governments and private companies. The public sector brings its regulatory authority and social objectives to the table, while the private sector contributes financial resources, technical skills, and management experience. This synergy allows for the development of crucial infrastructure projects, such as roads, bridges, airports, and even social services like hospitals and schools. The specific structure of a PPP can vary, but a common feature is the sharing of risks and rewards between the partners. For instance, a private company might construct and operate a toll road, recouping its investment through user fees.
