PPPs in Climate-Energy Governance for Sustainable Transition

 

Author: Minlibe LAMBONI 

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Summary

In a context of global climate emergency and growing needs for sustainable energy infrastructure, Public-Private Partnerships (PPPs) are emerging as strategic instruments for mobilizing capital, technology transfer, and rapid implementation of low-carbon projects. This work explores the ambivalent role of PPPs in climate governance, highlighting both their potential to support the energy transition and the risks they entail in terms of inequalities, transparency, and sustainability. PPPs make it possible to overcome state budgetary constraints, attract private financing, and foster innovation in key sectors such as renewable energy, green transport, and energy efficiency. Integrated into Nationally Determined Contributions (NDCs) or supported by international institutions, they can contribute to achieving the Sustainable Development Goals (SDGs). However, several limitations are identified: social exclusion, lack of strict environmental clauses, greenwashing, and excessive reliance on private profit logic. The analysis draws on contrasting case studies—such as the REIPPPP program in South Africa or conflicts surrounding projects in Kenya and Chile—to illustrate the conditions for the success or failure of these partnerships. The work concludes that rigorous supervision of PPPs is necessary, based on the explicit integration of climate and social criteria into contracts, the strengthening of public governance, and the alignment of projects with climate justice objectives. PPPs are therefore neither a panacea nor a threat in themselves, but instruments whose impact depends closely on the choices made regarding design, regulation, and stakeholder inclusion.

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Keywords: Public-Private Partnerships (PPP), Energy Transition, Climate Justice , Environmental Governance, Sustainable Development

1.    Introduction

Faced with the climate emergency, the rapid decarbonization of economies has become a global priority. Meeting the objectives of the Paris Agreement and limiting global warming to 1.5°C requires profound systemic transformations in all sectors, particularly the energy sector. To achieve carbon neutrality by mid-century, countries must invest massively in green infrastructure: renewable energy, energy efficiency, electrification of uses, smart and resilient grids. According to estimates by the International Energy Agency, several trillion dollars will be needed each year to cover these needs on a global scale. In this context of financial pressure and demand for innovation, Public-Private Partnerships (PPPs) are increasingly being used as mechanisms for financing, implementing and managing infrastructure projects with a strong environmental component [1] . Their ability to attract private capital, share risks and mobilize technical expertise makes them attractive instruments, particularly in developing countries where public budgetary capacities are limited.

However, despite their growing importance on the climate and energy agenda, PPPs raise many questions. Do they truly facilitate a fair and sustainable energy transition? Or do they risk, on the contrary, reproducing or exacerbating inequalities of access, increasing dependence on market logic, and compromising certain climate objectives through a lack of transparency, inclusiveness, or environmental robustness? The question is all the more acute given that field experiences reveal a diversity of results: some PPP projects prove virtuous and catalysts for transformation, while others are sources of social tensions, negative impacts on ecosystems, or financial failures. This ambivalence merits in-depth analysis.

This work aims to assess the ambivalent role of PPPs in climate governance, by questioning their compatibility with a just energy transition. It draws on an analytical corpus and recent case studies to shed light on the conditions under which PPPs can become genuine levers of sustainable transformation, but also the risks they entail when they are not properly regulated. The objective is twofold: on the one hand, to analyze the structural contributions and limitations of PPPs for climate-energy policies, particularly in countries of the South; on the other hand, to formulate recommendations on the institutional, contractual and social conditions necessary to make PPPs vectors of environmental, social and intergenerational justice.

This study is structured as follows: the first section presents the potential role of public-private partnerships (PPPs) in the energy transition. The second section examines the risks and limitations of PPPs for a just transition. The third section offers case studies illustrating these issues. The fourth section identifies the conditions for making PPPs an effective lever for a just transition. Finally, the conclusion summarizes the main teachings.

2.The potential role of PPPs in the energy transition

2.1. Advantages of PPPs for energy-climate projects

Public-private partnerships (PPPs) play a crucial role in implementing the infrastructure needed for the energy transition. They enable private capital to be mobilized for long-term projects, which are often unattractive to investors due to their delayed profitability or their exposure to increased climate risks. The use of instruments such as green bonds or green investments banks facilitate the viability of these projects, particularly in developing countries, where public budgets are limited [2] .

PPPs also promote the transfer of clean technologies. Through collaborative mechanisms, they enable the introduction of innovations in the fields of solar, wind, and waste-to-energy. The Tokyo model, which transforms household waste into electricity through more than 300 incineration plants, perfectly illustrates this technological potential, combining high environmental requirements and the involvement of local authorities [3] .

Furthermore, PPPs contribute to accelerating the deployment of energy infrastructure by pooling technical expertise and financial resources. The contractual nature of these partnerships, often long-term, encourages private partners to optimize costs and quality throughout the life cycle of the infrastructure [4] .

2.2. Compatibility with climate commitments (NDC, Net Zero)

Climate objectives, including Nationally Determined Contributions (NDCs), require effective, adaptable and sustainably financed implementation mechanisms. PPPs can be integrated into these national climate strategies, provided they are designed to meet sustainability criteria. The 2030 Agenda and the Sustainable Development Goals (SDGs), particularly SDG 17, recognize the importance of inclusive partnerships for achieving climate and energy goals [2] .

Examples of "green" PPPs confirm this compatibility. In Serbia, a solar power plant built in Kladovo under a PPP allows the production of 2 MW of clean energy, while reducing CO₂ emissions by 2,324 tonnes per year. This project, financed by foreign banks and supported by local authorities, reflects the integration of environmental objectives and community participation in a PPP arrangement [3] .

the Prototype Carbon Fund (PCF), initiated by the World Bank. As a public-private partnership, it allowed for the testing of emission reduction projects within the framework of the Kyoto Protocol's flexibility mechanisms. It served to launch carbon markets, strongly involving the private sector in climate finance [5] .

2.3. PPPs as catalysts for energy transition in the South

In the Global South, PPPs can fill gaps in financing, technical capacity, and governance. South Africa's Renewable Energy Independent Power Producer Procurement Program (REIPPPP) illustrates this dynamic. It is a public-private partnership structured around the development of wind and solar projects, incorporating local content requirements and community inclusion measures [3] .

International donors such as the World Bank, the EIB or the AfDB play a decisive role by providing guarantees, grants or hybrid financing instruments. The global initiative P4G ( Partnering for Green Growth and the Global Goals 2030) also demonstrates the impact of PPPs in developing countries, with more than 50 projects supported in the energy, water and sustainable cities sectors [3] .

3.Risks and limits of PPPs for a just transition

3.1. Risks of unequal access and social exclusion

Many PPP projects in the energy sector tend to focus on profitable urban areas, leaving rural or poor areas aside. This commercial orientation results in inaccessible prices for certain populations and a mismatch between energy supply and local needs. The Olkaria geothermal power plant in Kenya is a striking example: carried out without sufficient consultation with local populations, it caused forced displacement and land conflicts [5].

3.2.Low environmental or social accountability

PPPs sometimes suffer from a lack of transparency in project selection and management. The absence of strict environmental or social clauses in contracts can lead to forms of greenwashing. Projects present themselves as "green" without meeting rigorous sustainability criteria, due to a lack of independent evaluation and citizen monitoring [3] .

3.3. Dependence on private actors without guarantees of sustainability

In contexts of uncertain profitability, private investors may withdraw, exposing public authorities to financial and climate liabilities. This risk transfer is all the more problematic as legal frameworks are often insufficiently developed to ensure a sustainable contractual balance. Studies show that many PPPs in developing countries remain vulnerable to market fluctuations, particularly in the event of a crisis such as COVID-19 [3] [6] .

4.Case studies: practical insights

4.1. Virtuous PPP

The REIPPPP program in South Africa is cited as a model of good practice. It combines private financing, social inclusion objectives, environmental requirements and strengthening the local industrial fabric. It shows that well-designed PPPs can simultaneously meet economic, social and climate objectives [3] .

4.2. Conflicting PPPs

Conversely, in Kenya, the Olkaria geothermal power plant has caused significant tensions due to a lack of consultation with indigenous populations. In Chile, several hydroelectric projects have caused serious socio-environmental conflicts with local communities [3] .

4.3. Key lessons

These examples confirm that governance, transparency, and inclusion are the pillars of a successful PPP. A participatory and territorialized approach is essential to maximize the social and environmental benefits of public-private partnerships.

5.What conditions are needed to make PPPs a lever for a just transition?

5.1. Integration of climate and social criteria into contracts

For public-private partnerships to effectively contribute to a just energy transition, it is essential that they integrate binding environmental and social criteria from the design stage. These criteria must include targets for reducing emissions, climate resilience, as well as provisions for social inclusion (local jobs, universal access to energy, etc.) [3] .

The literature highlights that the absence of such clauses in contracts often leads to perverse effects, such as greenwashing, climate inefficiency or the exclusion of vulnerable populations. The use of innovative financial instruments such as green bonds, already used in several green PPP projects, can strengthen the attractiveness of truly sustainable projects [2] .

5.2. Strengthening the public governance framework

The success of PPPs depends heavily on the institutional framework within which they operate. Contracts must be clear, balanced and governed by autonomous and competent regulatory bodies. As the case study on Sofia (Bulgaria) highlights, the establishment of independent specialist units can compensate for the inadequacy of national regulation, while ensuring rigorous monitoring of contractual commitments [7] .

Regular, public, and independent climate and social audits must be systematically planned. They ensure transparency, assess the real results of PPP projects, and guide future policies [7] . In the absence of these mechanisms, PPPs risk becoming tax burdens or instruments for the private capture of public value.

5.3. Coordination with climate justice and adaptation goals

Finally, PPPs must align with climate justice and adaptation objectives, defined in Nationally Determined Contributions (NDCs), adaptation plans, and the SDGs. This requires integrated planning, based on a multi-stakeholder and multi-scale approach [8] .

International platforms such as P4G, which support PPPs in the fields of energy, cities or the circular economy, show that it is possible to reconcile economic performance and social equity [3] . The use of contractual models based on “public value” and not only on profitability – is fundamental to placing PPPs on a trajectory of inclusive sustainability.

6.Conclusion

Public-private partnerships are emerging as powerful but ambivalent tools in the energy transition. On the one hand, they offer concrete opportunities for mobilizing private capital, technology transfer, and rapid deployment of low-carbon infrastructure. Successful examples such as the REIPPPP in South Africa or the Kladovo solar power plant in Serbia demonstrate that PPPs can be drivers of change.

On the other hand, they carry major risks if they are not firmly regulated: unequal access, greenwashing, weak accountability, or even excessive dependence on the private sector. Cases like that of Olkaria in Kenya are a reminder that PPPs can exacerbate social or environmental injustices.

Thus, PPPs are neither a panacea nor a threat in and of themselves. Everything depends on the quality of governance, stakeholder inclusion, and the integration of climate and social issues into their design. For them to become levers for a just transition, they must be geared toward creating public value, territorial equity, and collective resilience.

It is therefore imperative to adopt an integrated, territorialized, and participatory approach, based on transparent regulatory mechanisms, robust contracts, and objectives aligned with climate priorities. This is the price to pay for PPPs to fully contribute to a fair, sustainable, and inclusive energy transition.

References

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