Tracking global Public-Private Partnerships in Q4’24

The fourth quarter of 2024 witnessed a decrease in the number of Public-Private Partnership (PPP) deals globally, signaling broader economic and geopolitical uncertainties. According to data, the total number of PPP transactions dropped from 202 in Q3 to 141 in Q4 last year. In a recent interview with CNBC Africa, Jyoti Bisbey, an Executive Committee Member at the World Association of PPP Units & Professionals (WAPPP), shed light on the trends and implications of this decline. Bisbey highlighted that the fourth quarter's dip contrasted with the upward trend observed in the preceding quarters of 2024. While there was notable progress in deals advancing from the tendering stage to financial closure and operations up to Q3, the final quarter of the year saw a significant downturn. This shift, according to Bisbey, mirrors the prevailing market dynamics and global economic conditions. Despite the decrease in the number of deals, Bisbey underlined that no projects were canceled, indicating a phase of market consolidation that might extend into 2025. From a regional perspective, Europe experienced a surge in PPP deals, while North America, Central and South America, Asia, and Africa recorded declines. Bisbey attributed this trend to the overarching uncertainty affecting the capital providers participating in PPPs. Notably, the flow of capital directed towards European deals increased in Q4 '24, with expectations of continuity into 2025. Conversely, emerging markets like Asia, South and Latin America, and Africa witnessed reduced capital inflows. Talking specifically about Africa, which saw minimal activity in Q4 with only five projects, Bisbey emphasized the region's historically low number of PPP deals. Despite this, Bisbey highlighted the stability of Africa's deal numbers and stressed the reliance on development financial institutions for financing due to the significant political and commercial risks involved. Sector-wise, transport projects dominated the PPP landscape, with sizable investments in regions like Chile, Saudi Arabia, and the UK. In Europe, social sectors such as health and education saw substantial funding, while emerging markets like Africa focused more on transport infrastructure to cater to urban development needs. Saudi Arabia stood out for its strategic approach to PPPs, particularly in the transport sector, where developments like the Riyadh metro project gained momentum. Bisbey noted that project cancellations serve as critical indicators of stakeholder commitment in PPPs. The absence of cancellations during the downturn indicated a wait-and-see approach among stakeholders amid changing economic and fiscal landscapes. Looking ahead to the first quarter of 2025, Bisbey expressed anticipation for a continuation of the uncertain climate experienced in Q4 '24. With economic and geopolitical uncertainties looming, stakeholders, especially in emerging markets like Africa, are expected to navigate a challenging environment characterized by fiscal consolidation and varying capital flows. The forthcoming reports for Q1 '25 are likely to mirror the cautious sentiment prevalent in the preceding quarter, underscoring the ongoing wait-and-hold pattern amidst evolving market dynamics.