REGIONAL • INDIC ATIVE STRATEGIC DEVELOPMENT PL AN In the event of unsecured lending to a Member State private sector. Harmonisation of such regulatory government or public entity, to rank the obligations frameworks, policies and strategies at the regional towards a DFI Network member under a rescheduling level will create a larger PPP market space and attract agreement or in the event of insolvency of that entity, PPP oriented investments. pari passu with all its other unsecured external debt; • 7 9 b) Re-balancing public-private sector production and The acquisition of an international credit rating for ownership; each SADC country and for DFI Network members Private sector development and restructuring of State should be encouraged. Owned Enterprises would stimulate capital market development and increase liquidity in the market. It TARGETS also stimulates participation of the private sector in • Implementation of the MOU of SADC Development the economy, especially in productive areas. Finance Institutions and the programme of the DFI c) Promotion of Public-Private Partnerships in the provision of infrastructure and other services; Network; Improve the provision of infrastructure services • Capacity building in Member States and in DFIs to (telecom, energy, transportation, water and sani- acquire international credit rating status. tation) either through better public provision of services or through effective PPPs. 5.3 FINANCIAL STRUCTURES AND MECHANISMS FOR FINANCING DEVELOPMENT IN SADC d) Capacity Building for PPP Development; PPP units or agencies are essential to implement PPP policies and programmes. Development of PPP skills is a key ingredient in the capacity building programme for PPPs promotion. 5.3.1 Public-Private Partnerships e) PPP Options; Public-private partnerships (PPPs) are effective financing PPP mechanisms for both national and regional development consideration of a full range of PPP options in order to activities, especially infrastructure projects. ensure optimal choices depending on the situation at In this and strategies should allow hand, including: respect, the availability of development finance over the medium-term is considered an important ingredient in policies • Lease Contracts: A private company rents facilities ensuring: from a municipality and assumes responsibility for • Materialisation of such PPP initiatives; operation and maintenance. The lessee finances • Developing PPP projects; working capital and replacement of capital • Undertaking financial structuring and packaging of components with limited economic life and fixed projects; and assets remain the responsibility of the public partner. • Mitigating the risks confronting PPP activities and • Concessions: A private company handles operations and maintenance and finances investments in addition projects. to working capital of a public partner. The public STRATEGIES partner exercises a regulatory and oversight role and a) PPP Policies, Strategies and Regulatory Frameworks; receives a concession fee for this arrangement. Member States need to develop and implement • Build-Operate-Transfer or Build-Own-Transfer policies and strategies on PPPs and market these to (BOT): A form of concession with an emphasis on key stakeholders including potential investors. construction of new, stand-alone systems and comes Member States need to create legislative frameworks in several variations. conducive for the development of PPPs. A transparent • Corporatisation: A government entity forms a separate regulatory framework on PPPs is essential including legal corporate entity to manage service provision. the pricing of services and exit regulations for the These corporate entities often referred to as "utilities,"