Public private partnerships (PPP, 3P, or P3) are described by the World Bank Group as “a long-term contract between a private party and a government entity, for providing a public asset or service, in which the private party bears significant risk and management responsibility, and remuneration is linked to performance” (World Bank Group, Accessed January 10th, 2020). In conservation finance, PPPs have been used for improving the efficiency of protected areas management, commercial concessions in protected areas and other sites of interest, watershed management, and a range of other situations. The difference between PPP and pay for service mechanisms is that PPPs are usually established as long term mechanisms whereas pay for success is usually a one time offering (that can be repeated).
One successful example of a PPP is California’s Marine Life Protection Act (MLPA) which led to the effective redesign of the state’s marine protected area network. State environmental agencies signed a Memorandum of Understanding (MOU) with a private non-profit foundation that outlined specific roles for each organization (Fox et al. 2013, Kirlin et al. 2013). The role of the private foundation (the Resources Legacy Fund Foundation) was primarily to raise charitable funding for the network, as well as provide support staff and facilitate stakeholder input in the planning process. Their efforts raised $19.5 million in donations which was combined with $18.5 million in public funds (Living Oceans Canada, 2014). Another important example for conservation is African Parks – an organization that has taken on the management and financial costs for a range of protected areas in Africa.
Social and development impact bonds
A public-private partnership or performance-based financial tool that allows private (impact) investors to provide upfront capital for traditionally public projects that deliver social and environmental outcomes. If the project succeeds, the investors are repaid by the Government (Social Impact Bonds), an aid agency, or other philanthropic funder (Development Impact Bonds) with capital plus interest. If the project fails, the interest and part of the capital is lost. While commonly referred to as a "bond", the solution replicates in essence a payment-for-results scheme. It cannot be compared to commercial bonds, green bonds or other impact bonds as an instrument except in that it seeks to repay capital and provide interest. The approach is also referred to as pay-for-success in the United States and as a social benefit bond in Australia. It can be applied to conservation.
Conservation impact bond (payment for results)
A social and development impact bond where resources are linked to a conservation outcome.
Development impact bond (payment for results)
A social and development impact bond where resources are linked to a development outcome.
Wildlife impact bond (payment for results)
A social and development impact bond where resources are linked outcomes featuring the protection or conservation of wildlife.