Half of the world's population lives in cities, urban areas, and in

other urban areas. Population growth will be, irreversibly,

widespread and rapid both in developing countries and in countries

developed. According to the World Bank, recent urbanization has occurred in the

almost all developing countries, approximately 70 million new residents

are added each year to the populations living in cities. In Africa, more

specifically in sub-Saharan Africa where the urban population is expected to double by

2030, the situation is the focus of attention.

Decent housing contributes significantly to quality of life and improves the

economic performance, in the sense that it constitutes a potential indicator for

the Human Development Perceptions Index.

As the population increases, the urbanization process...

Furthermore, governments are increasingly concerned with providing a

better living conditions for populations, especially the most disadvantaged, by giving them access

to accommodation with the required basic services,

The political logic for economic growth in Africa must keep pace

of population growth. Therefore, considerable efforts are needed to

access to decent housing.

Our reflection aims to provide an overview of how the partnership model

Public-private partnerships (PPPs) can help promote housing and support efforts to

human development.

It cannot be stressed enough: the increasing deficits of states and the pace of change

their debt increases the constraints on public resources

available. To bridge the gap between the need for housing financing and the

Capital that states can mobilize, it is essential to call upon other

sources of funding, particularly from private investors.

To achieve this, we must seek to leverage PPPs to mobilize the

investments, expertise and efficiency of the private sector for the design, the

structuring and implementation of housing projects accessible to all

strata of the population.

Reflections on Public-Private Partnerships in the Sustainable Housing Sector

By Al Hassane DIOP, PPP Expert

ARCOP - Senegal

2

It is essential to define a strategy for implementing PPPs in the

in the field of social housing in our countries and thus to support the States in the

Support for access to decent housing for the most vulnerable segments of the population. This

This approach will allow us to reconsider the key strategic issues of the contribution

Public-private partnerships (PPPs) in the social sectors.

Public-private partnerships (PPPs) thus affect all sectors of economic life. The sector of

housing is therefore eligible in the sense that, for the private sector, it is on the

based on a structured financing model, to carry out, on behalf of the States

housing accessible to the population in exchange for remuneration based on the

performance.

The funding needs of urban development projects are too great.

so that they can be covered solely by traditional public funds.

Public-private partnerships (PPPs) allow public entities to deliver goods and services for

the population count. In this sense, they constitute a powerful lever to facilitate

quickly access to decent housing.

Nowadays, governments are turning to PPPs as an option for

possible funding for large-scale investments in the provision of

affordable housing. As a financing model entirely based on a

Through synergy between the public and private sectors, PPPs can benefit

long-term to the various stakeholders in the contracts (public, private, lenders,

(capital investors) opportunities offered in the housing sector.

As a general rule, a PPP allows an operator or a group of operators

private individuals to take charge of the design, construction, maintenance and/or

the operation of a public facility or service under a contract

designed, balanced and backed by a defined risk sharing and financial model.

In many developed countries, including Canada, the Netherlands and the

In the United Kingdom, partnerships have contributed significantly to cost reduction and to

increasing the operational efficiency of urban development projects,

ranging from the provision of affordable housing to related services.

With such experiences, African authorities are able to train the

creating better housing units at reasonable costs.

The strategy will help identify investment opportunities in the field

of housing, to define an approach allowing the inclusion of stakeholders for

the construction of an ecosystem specific to the spirit and practice of PPPs.

This illustrates in many ways that the PPP, if handled with "hands"

sufficiently expert, constitute a powerful tool that can contribute to

develop housing infrastructure and services, even in local communities

the most disadvantaged areas around urban centers.

Reflections on Public-Private Partnerships in the Sustainable Housing Sector

By Al Hassane DIOP, PPP Expert

ARCOP - Senegal

3

Specifically for Senegal

In Senegal, several structures are put in place by the State, such as the SN

HLM, from SICAP SA, to facilitate access to decent housing with the privilege of a

significant land mobilization capacity.

The National Transformation Agenda "Senegal 2050" places social housing at the forefront.

as a strategic pillar, aimed at reducing the structural deficit through the production of

Decent and affordable housing. The objectives are ambitious: Production of 500

000 social housing units in ten years to fill the current deficit in order to reach 2

million homes by 2050, including 1.2 million at affordable prices.

The Government is therefore opting for the definition of a genuine national strategy for

housing focused on land tenure security, the implementation of legislation

adequate, sustainable financing as well as social and territorial equity in matters

access to housing.

To better understand the possibilities for public-private synergy within the framework of

For PPPs, a combined assessment involving the various stakeholders will be necessary.

to take stock of the situation before defining a broad program in the sector.

This assessment will help identify the steps, with a view to a comprehensive strategy and a

specific intervention for each geographical area of the country or space

regional economic hubs such as territories.

The program agreement tool, a new mechanism introduced by the new 2021 law on

Public-private partnerships can simplify and accelerate implementation in a

a unique program comprising several PPP contracts sharing common characteristics

municipalities across several localities in Senegal. The issue of insecurity

legal framework being outdated with the completion of the PPP governance framework.

Housing, yes, but sustainable and resilient.

One of the merits of PPPs is their consideration of technological developments.

green throughout the life cycle of projects or programs with better

involvement of the national private sector.

This point aligns with the numerous initiatives that are pushing us to rethink our ways

construction and housing must respect planetary boundaries. It will be necessary

accelerate action in the face of one of the most urgent challenges of our time: making

built environment a driver of environmental sustainability through approaches

holistic approaches that harmoniously integrate resilience and socioeconomic factors.

The building and construction market must be impacted to accelerate action

in support of the fight against the harmful effects of climate change.

Reflections on Public-Private Partnerships in the Sustainable Housing Sector

By Al Hassane DIOP, PPP Expert

ARCOP - Senegal

4

By rethinking building regulations to prioritize the overall carbon footprint, the

resilience and value, rather than the lowest initial cost, are what public buyers prioritize.

and private companies can stimulate the market through demand for low-carbon materials.

energy-efficient designs and modern construction practices and

Innovative. It is need that creates the market.

The aim will be to assess how ambitious sustainability criteria can send

clear signals to other actors in the context of PPPs, strengthening ambition and

accelerate the transition to low-carbon and resilient buildings overall

of the sector.

The PPP and Infrastructure Evaluation and Rating System (PIERS) promoted

by the United Nations Commission for Europe will be able to help to

better structuring of projects for PPPs that are resilient to the Development Goals

sustainable in the building sector in general and housing in particular.

The PIERS tool is an evaluation system applicable to PPP projects related to

05 sustainability criteria, primarily: - Access and equity – Economic efficiency and

Budgetary viability – Environmental sustainability and resilience – Reproducibility –

Stakeholder participation.

Thus, the specific requirements and scope of projects in the sector of

buildings in general, and housing in particular, will be precisely adjusted for

reflect climate considerations, and can be used to develop

appropriate performance indicators to address risks and resilience

climatic factors. These elements will become inputs for structuring projects and

programs.

This project is covered by the momentum generated within the framework of the Commission

sustainable/green public sector by Dr. Moustapha DJITTÉ, Director General of

ARCOP will make it possible to reconcile, in a definitive and irreversible way, the construction of

Buildings and Sustainability. This project, based on an ambitious yet realistic plan, will change

Ultimately, the trajectory of state investments towards construction projects

fully aligned with the SDGs.

Which mounting model?

For the public entity, the advantages of the PPP solution lie in the acceleration

and the proper management of deadlines and costs in the appropriation cycle and

long-term possession, the guarantees provided regarding the actual existence of a

maintenance.

The logic behind these contracts, in the housing sector, is, for the

public entity, to move from an essentially heritage-based approach to a

logic of service provision guaranteed by a commitment from the operator on the

performance for the benefit of the populations receiving the housing.

Reflections on Public-Private Partnerships in the Sustainable Housing Sector

By Al Hassane DIOP, PPP Expert

ARCOP - Senegal

5

The operator, for its part, will be able to maximize revenue from projects or programs

through related services such as security, the provision of services

merchants, maintaining the ecosystem balance of the localities concerned, etc.

In this sector, we observe that the degree of private sector involvement can

It can vary greatly from one project to another. While it is often quite important in terms of appearance

Due to construction delays, it tends to be weaker in terms of performance.

operation and maintenance.

Housing projects are often part of a strategy to rationalize the

land assets of public authorities (transfer of unsuitable or overpriced sites,

(grouping of services, etc.). Thus, PPP contracts offer the private operator the

possibility of developing, in addition to the public service mission which can be

exercised by public authorities, that of alternative land development or of

the real estate included in the contract. This valuation will generate some

revenues that will be deducted from the rent paid by the public authorities under

form of so-called ancillary revenue, thus allowing for savings

Budgetary arrangements for public authorities. Payment terms for beneficiaries.

will be left to the discretion of the public authorities.

What sustainable financing model?

Governments therefore need access to appropriate financial capital, to

technical learning and technological innovation, leading to long-term effectiveness

asset term and proactive climate risk management throughout the

asset lifecycle; this ambition is well within reach of the private sector.

Therefore, mobilizing private investment is crucial to bridging the funding gap.

housing, facing increasing financial needs and pressures on the

Public budgets. The financial costs associated with resilience must not be perceived.

as a threat, but rather an advantage contributing to the financing of the

resilience.

The size, complexity, and lack of understanding of the financing models of the

Resilience means that concrete examples remain limited. However, there are at least

two main frameworks for financing resilience in the context of PPPs:

- Integrate climate resilience into existing and funded PPP models

successfully, taking into account the climate risks identified in the

infrastructure and services;

- Use PPPs to finance adaptation, mitigation and

successful resilience, by leveraging the knowledge and resources of the sector

private to build sustainable housing.

And since resilience is a systemic attribute, it is essential to consider the

both the project and its ecosystem, and to adopt a "whole-to-whole" financing approach

throughout the life cycle,” based on assumptions credible to all stakeholders. This

allows us to take into account the most pessimistic climate scenarios and their

Reflections on Public-Private Partnerships in the Sustainable Housing Sector

By Al Hassane DIOP, PPP Expert

ARCOP - Senegal

6

impacts beyond return on investment. This monitoring role falls to the Authority.

public.

At least two approaches can help achieve this:

Blended financing and risk reduction instruments can be used:

The PPP allows it. Blended finance mechanisms combine public funds and

private. Public funds, mobilized in the form of subsidies or contributions, have

with the aim of reducing the probability of risks occurring, attracting and reassuring

Private investment in resilient housing projects. Insurance and

guarantees constitute instruments for mitigating climate risks capable

to improve the credibility of projects. Parametric assurance, for example, can

to guarantee rapid payments based on predefined climate triggers by

the parties to the contract.

It is also possible to promote incentive instruments based on the

Performance and risk sharing. PPP contracts, in general, must include

performance-related incentives, moreover, those based on achieving the

Predefined outcomes for resilience to the SDGs. Sharing mechanisms

risks, such as resilience bonds and contingency funds

distribute climate risks between public and private actors, thereby strengthening the

stability and contractual balance of the project.

Al Hassane Diop,

PPP Expert

ARCOP - Senegal