Public-Private Partnerships in the Middle East and North Africa : A Handbook for Policy Makers. by OECD

The infrastructure shortage in developing countries is a major obstacle to improved living
standards, enterprise development, and the goals of the United Nations Millennium Declaration. This is especially the case in the Middle East and North Africa (MENA), where infrastructure demand had
long been rising due to population growth, rapid urbanisation, and economic expansion, and was further amplified as historic MENA-region transitions pressured governments to increase living standards and improve the business environment. In many countries, the high levels of investment required for infrastructure cannot be financed by the public purse alone, and private investment is therefore an option that governments cannot afford to ignore. Private investment goes beyond mere additional capital to mobilise private sector technological expertise and managerial skills in the public interest.
Still, a number of failed public-private partnerships in the infrastructure sector attest to the
challenges facing policy makers. Infrastructure investment involves contracts that are by nature complex and of long duration, and that must ensure financial sustainability while meeting user needs and social objectives. The challenges are more acute when foreign investors are involved, as is often the case where the infrastructure project exceeds a certain size. In addition, private infrastructure investment has become increasingly scarce, due to the global economic crisis, commercial bank deleveraging, perceived increased political risk in some countries, and tightened bank prudential regulations.