What Makes a PPP Bankable? A Guide for Government Project Teams

The PPP Paradox

Africa needs approximately $130–170 billion per year in infrastructure investment. Private capital globally is actively looking for infrastructure yield. Yet PPP projects in Africa consistently fail to attract the private investment that governments are seeking. The paradox is real — and the explanation lies in transaction structuring, not in a lack of investor appetite.

What Institutional Investors Are Actually Asking

When an infrastructure fund, pension fund, or sovereign wealth fund evaluates a PPP project, they are asking a specific set of questions. Government project teams that understand these questions — and structure accordingly — dramatically improve their probability of attracting credible private partners.

1. Is the risk allocation clear and reasonable?

The most common reason PPP projects fail to attract private investors is that governments retain too little risk while asking investors to accept too much. A bankable PPP clearly allocates:

2. Is there a credible offtake or revenue mechanism?

Private investors need to model their returns. For a toll road, that means traffic studies and revenue projections. For a power project, a Power Purchase Agreement (PPA) with a creditworthy offtaker. For a water project, a tariff framework and a government payment obligation.

Without a clear, legally enforceable revenue mechanism, institutional investors cannot complete their financial models — and cannot commit capital.

3. Is the legal framework adequate?

Investors will conduct thorough legal due diligence. The key questions:

4. Is the project preparation documentation complete?

Institutional investors do not develop projects — they invest in them. A project that arrives at market without a completed feasibility study, financial model, environmental impact assessment, and draft concession agreement will be sent back for more work. The preparation phase is often where advisory support makes the greatest difference.

The Role of a Financial Advisor in PPP Transactions

Government ministries and project teams typically have deep expertise in infrastructure delivery — but less experience structuring transactions for private capital markets. A financial advisor bridges this gap by:

What "Financial Close" Actually Requires

A PPP reaches financial close when all the legal agreements are signed and the financing is committed. To get there, you need:

Each of these elements requires preparation, negotiation, and often several iterations. Governments that approach PPP transactions with a clear advisor, complete documentation, and a realistic timeline dramatically outperform those that approach the market prematurely.

*Maramoja Enterprises advises governments and public authorities on PPP structuring, infrastructure financing, and DFI engagement. For a confidential discussion of your project requirements, contact our government advisory team.*