REVIEW OF INTERNATIONAL EXPERIENCE WITH PUBLIC-PRIVATE PARTNERSHIP IN THE IRRIGATION SUBSECTOR

ABSTRACT Over the last few years, the number of initiatives of public-private partnerships in irrigation has increased significantly. PPPs have been developed to accelerate irrigation expansion, improve operation & maintenance services, and eliminate or reduce O&M subsidies. This paper shares the lessons learned from the experiences of the 'pioneer' countries, reviewing: (i) recent PPP transactions under implementation (Morocco, Peru and Ethiopia) and (ii) some transactions under preparation (Brazil, Morocco and Ethiopia). The main lessons learned to date for the promotion and development of PPPs in irrigation cover the following areas: an analysis of what constitutes a favourable environment to promote and develop a PPP, considering the potentially conflicting objectives of farmers, public and private sectors. This paper illustrates that the PPP model (with financial contribution of a private party to the CAPEX, capital investment) is more appropriate for new and modern irrigation schemes with solid irrigation services demand from commercial farmers, while other designs of private sector involvement, like management contracts, should be considered when conditions are different (smallholders with subsistence agriculture, etc.); a description of good and bad practices for transaction design to reduce demand and payment risk and to increase attractiveness of the operation; a discussion on the intrinsic role of PPP in irrigation, advising not to consider it as a new 'panacea' but rather as an additional tool to be used cautiously and only when some specific conditions are met. Copyright (c) 2014 John Wiley & Sons, Ltd.