Identification of Challenges to Attract Public Private Partnerships for Power Generation Infrastructures: A Review

Abstract

Although the required capital investments for electricity generation infrastructure from 2018 to 2037 have been projected around USD 14,568 in Sri Lanka, Ceylon Electricity Board is not in a position to meet this requirement due to its negative cash flows. Full private investments are restricted by the law stating that any person to generate capacity above and over of 25 MW, shall Government hold 51% of ownership. Since the funding of power generation is a top urgent priority in the country, this paper investigates the challenges and critical factors involved in going for a public private partnership (PPP) by reviewing the related literature in other countries and identifying main themes that Sri Lanka needs to take into account. Narrative literature review with thematic analysis revealed that 1) Political Instability, 2) State Credibility on policies, 3) Regulatory and legal framework, 4) Transparent and efficient procurement process, 5) Financial Market, 6) Favourable investment environment, and 7) a strong and good private consortium as the mostly influencing macro factors to build PPP for power generation infrastructure projects in Sri Lanka.