Helping Countries Manage Fiscal Risks from Public Private Partnerships


Public-Private Partnerships (PPPs) are particularly appealing to countries who have limited fiscal capability for additional public investment. When used effectively, PPPs can potentially deliver substantial efficiency gains relative to the purely public provision of infrastructure services. However, PPPs are complex and entail fiscal costs and risks for the government.

It is not uncommon to see investment projects procured as PPPs not for efficiency reasons, but to circumvent budgetary oversight and postpone the recording of the fiscal costs of providing infrastructure services. Some governments have procured projects that either could not be funded within their budgetary envelope, or that exposed public finances to excessive fiscal risks.

Successful PPP programs require strong institutions that can effectively negotiate contracts and manage and monitor their long-term fiscal impact. Yet ministries of finance often lack the expertise and tools needed to safeguard public finances against fiscal risks arising from PPPs.


The IMF, in collaboration with the World Bank, has developed the PPP Fiscal Risk Assessment Model (PFRAM), an analytical tool that quantifies the macro-fiscal impact of PPP projects. Used by ministries of finance, the tool provides a structured process for gathering information for a PPP project in a simple, user-friendly, Excel-based platform. It can be used to evaluate an existing project at different stages of its project cycle, as well as to evaluate potential projects.

The PFRAM allows countries to estimate a PPP’s impact on the fiscal deficit, debt and stock of government contingent liabilities. It provides a sensitivity analysis of key fiscal aggregates to changes in macroeconomic and project specific parameters, and assists governments in identifying fiscal risks and evaluating appropriate mitigation measures. It also strengthens the role of ministries of finance in the PPP selection and monitoring to safeguard public finances.

Launched in 2016, the tool is available for practitioners on the IMF’s public investment management website, and the G20 Global Infrastructure Hub’s webpage.


To ensure a sustainable impact, the IMF provides hands-on training on the tool as well as ongoing technical assistance to help countries navigate PPP issues. The IMF is supporting countries such as Kosovo, Serbia, Cambodia, Egypt, Côte d’Ivoire and Niger on their PPP management, using PFRAM to estimate the fiscal costs and risks of operations and advise countries on institutional design, legal framework and fiscal reporting for PPPs. The IMF is also helping the authorities to estimate the fiscal impact of large PPP operations in Georgia and Honduras. It has also provided hands-on support to the Senegalese authorities.

The IMF has created a regional model for sustainable capacity development on PPPs. For instance, it has organized several training and workshop activities in association with the Public-Private Infrastructure Advisory Facility and the Caribbean Development Bank.