📋 Tender Overview
Project Name
Leveraging Public Private Partnerships to Improve Fiscal Sustainability in the South Pacific
Project Number
59298-001
Country / Economy
Regional
Cook Islands
Fiji
Samoa
Tonga
Project Status
Proposed
Project Type / Modality of Assistance
Technical Assistance
Source of Funding / Amount
TA: Leveraging Public Private Partnerships to Improve Fiscal Sustainability in the South Pacific
Technical Assistance Special Fund US$ 4.39 million
Sector / Subsector
Public sector management /
Gender
Description
The proposed TA aims to enhance fiscal debt management in South Pacific Developing Member Countries (DMCs) by supporting the identification, structuring, and implementation of viable Public-Private Partnership (PPP) projects that promote private sector investment and improve sustainable service delivery. The TA will also strengthen institutional capacity through targeted training, workshops, and expert guidance on PPP project screening, preparation, and implementation, fiscal commitments and contingent liability assessments, and PPP contract management. The TA will focus on four South Pacific DMCs: the Cook Islands, Fiji, Samoa, and Tonga.
Project Rationale and Linkage to Country/Regional Strategy
Macroeconomic challenges constrain service delivery. DMCs in the Pacific comprise 14 small island developing states (SIDS) that face challenges due to high debt levels and significant debt servicing needs, resulting in a sustained risk of debt distress. Among the DMCs, the Cook Islands, Fiji, Samoa, and Tonga stand out as the most constrained, due to their vulnerability to large macroeconomic shocks, including those related to natural disasters and contingent liabilities. These factors limit the ability of the private sector to play a larger role in sustainable service delivery. To attract private sector financing and reduce reliance on public sector deficit financing, it is essential to mitigate these risks, including through developing more innovative and sustainable financing models, such as PPPs.
Potential for PPPs to ease fiscal pressures in the Pacific is constrained by capacity limitations. Governments in the Pacific often lack the necessary expertise to structure well-prepared, viable, and bankable PPP projects, as well as the ability to effectively monitor ongoing performance to ensure value for money. This limitation has hindered the ability of Pacific DMCs to identify and prepare new PPP opportunities that could alleviate fiscal pressures on government balance sheets and unlock private sector efficiency gains. As many Pacific countries aim to expand the use of PPPs for infrastructure development, targeted support is essential to help them structure and implement bankable PPP projects. This support can reduce the fiscal burden by attracting private sector capital and operational efficiency, while also ensuring that fiscal risks arising from contingent liabilities are properly identified and managed. In small and vu
