Integrating Climate Risk Management in infrastructure PPPs in Developing CountriesER CONSIDERATIONS

Climate change is one of the largest threats to global economic growth and financial stability. While international cooperation to address climate change has increased in recent years, progress has been limited in transition to more climate-proof infrastructure management. Stakeholders involved in infrastructure development must urgently understand and integrate climate-related risks (CRR) from all three physical, transition, and liability aspects. As public-private partnerships (PPPs) are a key modality in delivering infrastructure projects, PPP process cycle provides many venues to proactively manage CRR that could arise throughout the whole infrastructure life cycle. To such an end, this paper identifies the specificities of CRR for infrastructure PPPs, providing illustrations on the relevant types of climate-related risks, conceptual analyses of the systemic implications, broader ecosystem-wide considerations facing the key stakeholders as well as granular practical recommendations to adapt the PPP process cycle. Finally, the broader considerations for key stakeholders, particularly the public sector, policymakers, and private sector are discussed. In doing so, this paper aims to contribute towards the development of good practices among PPP practitioners and stakeholders for managing climate-related risks. Keywords: stranded assets, valuation, public investment planning, infrastructure economics, climate change, public-private partnerships