Skip to content
Jordan PPP
Stained-glass illustration of the Red Sea port of Aqaba seen through a great stained-glass arch

· 4 min read

What is a PPP? Public-private partnerships explained from zero

The definition, how a PPP works, a short history, what goes wrong, and what PPPs could do for Jordan.

By Saad I. Sahawneh

A public-private partnership, or PPP, is a long contract in which a government and a company build and run a public service together. The idea is simple, it is older than most people think, and it will shape much of what Jordan builds next. This post explains it from zero.

The definition

The World Bank defines a PPP 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.”

In plain words, the government decides what the country needs, such as a road, a water plant or a school. A private company designs it, builds it, often pays for it, and then runs it for many years, usually 20 to 30. The company is paid only when the service works as promised. At the end of the contract, the asset goes back to the government.

The government keeps the public asset. The company takes the risks it can manage best and is paid for performance.

How a PPP works

Every PPP follows the same path:

  1. 01Identify. The government picks a need and checks that a PPP is the best way to meet it.
  2. 02Prepare. Advisors study the cost, the demand and the risks, and draft the contract.
  3. 03Tender. Companies compete, and the best bid on price and quality wins.
  4. 04Sign and close. The contract is signed and the lenders commit the money. This moment is called financial close.
  5. 05Build, operate, hand back. The partner builds the asset, runs it for decades and returns it in good working order.

The main kinds have short names. In a BOT (build, operate, transfer) the partner builds an asset, runs it for a fixed term and hands it back. In a DBFO it also designs the asset and raises the money. In a concession it takes over an existing service and collects fees from its users. An IPP is a private power plant that sells its electricity to a state buyer. The partner is paid either by users, through tolls and tariffs, or by the government, through availability payments made while the asset is open and meets its standards.

Stained-glass canopy sheltering a workshop on the desert shore at sunset
A PPP runs for decades, so the contract has to work for the people who will use the asset long after it is signed.

An old idea with a modern form

In 1854 Egypt granted Ferdinand de Lesseps the concession to build the Suez Canal, and a second concession in 1856 set a 99-year term. In the 1800s many canals and railways were built by private companies under rights granted by governments. The modern PPP took shape in the UK, which named its program the Private Finance Initiative in 1992 and signed more than 700 deals before it stopped using the model for new projects in 2018.

$100.7B

of private investment in infrastructure in low- and middle-income countries in 2024, according to the World Bank

What goes wrong

PPPs fail in familiar ways. A World Bank study of more than 1,000 concessions in Latin America found that 30% were renegotiated, on average just 2.2 years after award. The UK’s National Audit Office found that private finance cost 2% to 4% a year more than government borrowing. Guarantees given today can become bills years later, and a contract signed for 25 years has to survive new technology and new governments.

The lesson is consistent. A PPP works when each risk sits with the partner best able to manage it and the contract is priced fairly. The starting guide lists the six most common failures with a source for each.

Jordan’s PPP story

Jordan has built with PPPs for more than 20 years. The As-Samra wastewater plant reached financial close in 2003. Airport International Group signed a 25-year concession for Queen Alia International Airport in 2007. Amman East, the country’s first independent power plant, opened in 2009, and the Disi water conveyance followed in 2013. The Tafila Wind Farm and Shams Ma’an solar plant came after.

Stained-glass window looking out over the Gulf of Aqaba
The Aqaba-Amman Water Desalination and Conveyance project signed its final agreement in April 2026.

The laws kept pace. PPP Law No. 31 of 2014 was replaced by Law No. 17 of 2020, and PPP Law No. 19 of 2023 took effect on November 13, 2023, with PPP Regulation No. 9 of 2024 after it. The PPP Unit now sits at the Ministry of Investment. In April 2026 the final agreement for the National Water Carrier was signed: about $4.3 billion to bring 300 million m³ of water a year from Aqaba through a 450 km pipeline.

What comes next for Jordan

$86B

of PPP and infrastructure projects in development in Jordan, $46 billion of them anchored in Aqaba

The Economic Modernisation Vision needs about JD 41 billion of investment by 2033, 72% of it from the private sector. Jordan has the law, the PPP Unit and two decades of projects. The next step is many more PPPs, of every size, led by every kind of organization. AI, robotics and tokenization make that step easier, and together they point towards the $500 trillion infrastructure singularity.

Where to start

The starting guide covers all of this in ten short chapters, with a source for every date and figure, a glossary of the words you will hear most and a PDF to keep. When you are ready to act, the 52 guides show each kind of organization in Jordan how to launch a PPP program of its own.

Four of the 52 guides, one for every kind of organization in Jordan.