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The Role of Financial Instruments in PPP Blended Projects

Gianni Carbonaro, Gelsomina Catalano, Laura Delponte, Silvia Vignetti

In recent years, a number of studies have emphasised the potentially beneficial role of Public-Private Partnerships (PPPs) in the implementation of various aspects of the EU policy agenda, including the Cohesion Policy objectives pursued through the ESI Funds. However, there are also critical views about the benefit of using PPPs in delivering public policies. While not discussing the general advantages of PPPs, this paper argues that the main challenge of combining Cohesion Policy and the PPP approach lies in the need to organise the interface between two complex processes, which are usually planned and implemented independently. Combining them in effective ways poses additional complications related to coordinating the timing of operations and aligning the incentives determining the behaviour of various stakeholders. As a result, “blended” operations - combining the PPP approach with ESI funds - have been relatively rare thus far. The use of ESI Funds to establish Financial Instruments (FIs) is likely to provide a further incentive for adopting a PPP approach, particularly in the context of small and medium-sized investment projects. This is because FIs reduce some of the coordination and implementation problems that arise when the ESI resources are combined with a PPP. Although the available evidence is scant and fragmented, this paper tries to cast some light and to provide examples on how FIs can be used to facilitate the closure of PPP projects within the context of the ESI Funds.

G. Carbonaro is a member of the Scientific Committee of Centre for Industrial Studies (CSIL). G. Catalano is Partner and Senior Economist at CSIL, Adjunct Professor of Regional Economics and Policy at the University of Milan. L. Delponte is Partner and Senior Economist at CSIL. S. Vignetti is Director of the Evaluation Unit at CSIL. For correspondence: The views expressed in this article are personal.


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