The IIPP model was pioneered by Australian and Canadian specialised pension fund infrastructure investment platforms, and became known as ‘Pensions-Public Partnerships’. The African Unions’ 5% institutional infrastructure investment agenda initiative, adapted this, and expanded it to include sovereign wealth funds and the broader institutional investment community, creating the first-of-its-kind, Institutional Investor Public-Partnership and Model Law Framework Its purpose being to assist and equip emerging markets and developing countries to de-risk infrastructure investment in order to better meet their climate and infrastructure development private capital mobilisation goals.
Governments with limited funds and competing expenditure requirements receive world class, essential and well-maintained green infrastructure assets; consumers and civil society benefit from reliable climate friendly infrastructure delivery, budgetary discipline and long-term real investment returns; and institutional infrastructure investment takes place over the full life cycle of the climate friendly infrastructure asset(s), not just for an investment, economic or political cycle. This significantly improves the asset’s prospects of enhancing economic and private sector development, job creation and regional and domestic trade and investment competitiveness.
The benefits of implementing the Model Law, and conducting an efficient and effective Climate Procurement Procedure, are as follows:
- allows procurement at speed and at scale of Climate Projects:
- enables Governments to drive quality and value for money via robust Climate Procurement Procedures. For example, by
-> having meaningful discussion/negotiation with Bidders; and
-> maintaining competitive tension throughout Climate Procurement Procedures;
- ensures delivery of Climate Projects on time as the Private Partner and its proposals (including issues such as solvency risk, previous experience and deliverability) have been rigorously evaluated;
- minimises the risk of disputes and problems with the Bidders (including the Private Partner), because:
-> Bids have been thoroughly evaluated and tested during the Climate Procurement Procedure, and
-> the Climate Procurement Procedure has permitted detailed review of the Climate Contracts thus enabling clear, unambiguous drafting to be included in the Climate Contracts;
- delivers local community benefits through clear requirements and incentives in the Climate Contracts which are evaluated during the Climate Procurement Procedure;
- attracts Bidders by giving the market confidence that:
-> the Climate Procurement Procedure will be run on a transparent and fair basis;
-> the requirements on Bidders will be proportionate and appropriate to what is being procured; and
-> the procurement timetable will be adhered to, giving increased certainty on resource requirements and bid costs;
- increases the likelihood of unsuccessful Bidders bidding for other opportunities advertised by the Climate Procurement Authority; and
- helps control public and private sector procurement/bidding costs.