Small-Scale Public-Private Partnerships: Lots of Research, but How do we Move Forward?

MMM Infra Blog No. 11 31 August 2025

“Small is beautiful” said the philosopher EF Schumacher – and, currently, the world of Public-Private Partnership (PPP) practitioners is buzzing with renewed interest in so-called Small-Scale PPPs (SSPPP). To a great extent, this interest is as a result of the release, in July 2025, of the Guidelines for Small-Scale Public-Private Partnerships, a publication of the World Association of PPP Units and Professionals (WAPPP). (The publication can be downloaded at Guidelines for Small-Scale Public-Private Partnerships – WAPPP).

The opportunities for, and challenges of, SSPPP have, however, been a subject of research for more than a decade. In 2014, Aijaz Ahmad and Shyamala Shukla of the World Bank prepared A Preliminary Review of Trends in Small-Scale Public-Private Partnership Projects (A Preliminary Review of Trends in Small-Scale Public-Private Partnership Projects (municipal and sub-national) | Public Private Partnership). This was followed, in 2019, by a research paper prepared by Richard Kupisz, for the Saudi Arabia National Center for Privatization & PPP (NCP), entitled Improving Value for Money in Small-Scale PPPs ((PDF) IMPROVING VALUE FOR MONEY IN SMALL-SCALE PPPs NCP Research Paper).

Each of these documents contains useful information – including case studies of successful  SSPPP projects – and each of them also contains thoughtful recommendations for dealing with the principle challenge of such projects: How to develop and implement small-scale PPPs so that the project benefits are not outweighed by the costs associated with expensive and time-consuming PPP processes designed for use on much larger projects. Specifically, each of these papers contain helpful material on issues such as:

·       the definition of a ‘small-scale’ project;

·       the legal and regulatory frameworks that are appropriate for SSPPPs; and

·       the institutional arrangements necessary to have a successful SSPPP program.

The problem, therefore, is not with a lack of information. Instead, the problem is that countries do not have a clear ‘roadmap’ to follow in designing and implementing a program that will deliver successful SSPPPs.

In my view, such a roadmap would involve three key steps, as follows:

1.       Set the Policy

As a first step, governments should officially establish a unique policy framework for small-scale PPPs.

For those countries that have a PPP law, or are considering the adoption of such a law, this would mean inserting a provision in the legislation that establishes a threshold value for projects governed by the law. Following the advice given in the World Bank report and the NCP research paper, it would be appropriate to select a threshold value of approximately USD 50 million for this purpose, on the basis that this number represents the anticipated combined value of the capital expenditure (CapEx) and operating expenses (OpEx) of the project. For projects with a value above USD 50 million, the normal PPP processes set out in the law would apply, while projects below the threshold would instead be developed and implemented using special SSPPP processes, which could be set out in secondary legislation, i.e., regulations.

In countries that do not have a formal PPP law, this step could simply consist of a policy statement, to make it clear that a special procedural regime will apply to projects with a total value below a prescribed threshold.

2.       Establish Special SSPPP Procedures

The second step would be to develop the unique SSPPP procedures, either by promulgating a SSPPP regulation (in those countries with a PPP law) or by issuing a detailed SSPPP Guidance Note (in those countries without such law). In either case, there would be a public document, setting out, for all concerned stakeholders, the special arrangements that would be followed for SSPPP projects.

The most important consideration is that the SSPPP procedures must be as ‘streamlined’ as possible, following the recommendations in the reports noted above. In particular, careful attention should be paid to reducing, as much as possible, the number of approval ‘decision points’ for small-scale projects, and to ensuring that the approval decisions on are taken at an appropriately devolved level, by relatively less senior officials. This will reduce procedural costs, and will also expedite the time required to prepare and implement SSPPP projects.

3.       Create a Dedicated SSPPP Team

Given that the SSPPP procedures will be different than those used for ‘normal’ PPP projects, it makes sense to create a centralised team of SSPPP specialists, who can advocate for SSPPP projects, and assist SSPPP Implementing Authorities in developing and monitoring their projects.

In many instances, the SSPPP Implementing Authorities will be municipalities and other sub-sovereign levels of government, and the employees of such entities may be completely unfamiliar with the tasks which need to be undertaken. Accordingly, they will need a significant amount of assistance.

Ideally, the dedicated SSPPP team would be a separate division within the central PPP unit, solely focused on encouraging and facilitating small-scale projects.

As part of its mandate, the SSPPP team could be responsible for the development of Standard-Form SSPPP Agreements, designed for use in various sectors. Again, these model agreements should be shorter and considerably less complex than the contracts used for large-scale PPP projects.

In addition, the SSPPP team should play an active role in advocating for SSPPPs and in capacity-building – not only with implementing authorities, but also with prospective private sector project developers and lenders, including local bankers and institutional investors.

In light of the reports, papers and studies that are now available on the subject of small-scale Public-Private Partnerships, countries have ample guidance material that can be used to develop an effective SSPPP program. What is needed now is action. It is time to move from analysis to implementation.

This blog is in a series that appears on this website. It has been written by Mark Moseley, the Principal of Moseley Infrastructure Advisory Services (Mark.Moseley@MMMInfra.com). Unless otherwise noted, the copyright in this blog is owned by Moseley Infrastructure Advisory Services. The blog is made available for use under a Creative Commons Attribution 3.0 Licence, whereby users are free to copy and redistribute the contents of the blog, if they give credit to the author, and clearly indicate any changes that have been made.