What is PPP?
A public-private partnership (PPP) is a collaborative arrangement between the public and private sectors to develop infrastructure projects and improve the quality of services being provided to the public. In a PPP, the public sector partners with a private sector partner to jointly plan, finance, construct, and/or operate/maintain an asset or service.
The private sector partner brings in their expertise, resources, and capital to the project, while the public sector partner provides oversight and regulatory support. PPPs are commonly used to deliver infrastructure and public services. The structure of a PPP can vary, but the key characteristics include:
- Financing: PPPs often involve the private sector partner providing financing for the project, in addition to design, construction, and operation.
- Risk sharing: PPPs involve the sharing of risks between the public and private partners. Both parties assume risks which are in line with their ability and appetite.
- Long-term commitment: PPPs are typically long-term agreements, often lasting several decades. However, the duration can vary according to the risk-return profile of the selected projects.
- Innovation: PPPs often involve the private sector in bringing new ideas, technology, and best practices to a project.
- Performance-based approach: PPPs often follow performance-based contracts, with payment tied to the achievement of specific performance targets.
- Focus on end user: PPPs have a strong focus on the end user, with the goal of providing improved services or infrastructure to the public.
Source: Manual on PPP projects, management and execution – Ministry of Finance (PDF, 1 MB)
Legal framework of public-private partnerships
The Federal Decree-Law No. 12 of 2023 on Public-Private Partnerships sets the general framework for partnerships between federal government entities and the private sector.
In addition to regulating public-private partnerships in the UAE, the law aims to:
- encourage the private sector to participate in developmental and strategic projects,
- increase investment in federal government projects of social and economic value,
- enable the government to efficiently implement strategic projects
- benefit from financial and administrative expertise, technical knowledge, and technology solutions available to the private sector.
The new law, which came into force on 1st December 2023, will accelerate the implementation of projects that offer an added value for public funds, minimise financial and operational risks on the government, transform the management of some infrastructure projects and public services, and enhance the competitiveness of projects in the local, regional, and global markets.
Why adopt the ‘PPP’ model?
The PPP model would serve the UAE’s goals and agenda in implementing a sustainable, competitive-economy based on knowledge, expertise and diversity. It would serve the public interest from the integration of efforts, fund, expertise and technologies of both the government entities and the private partners. In addition, it is an ideal option to render efficient commodities and services at a lower cost and to make use of the private sector’s capabilities and efficiency.
Other benefits include:
- attracting national, regional and foreign investments
- cost saving on projects’ operation and maintenance through competitive bidding and innovative technologies offered by private tenderers
- motivating the private sector to innovate
- promoting economic growth by creating more job opportunities in the country
- reducing government spending and funding and/or sharing economic risks with the private sector
What are the functions of the private partner?
There are nine main functions that help determine which Public-Private Partnership (PPP) model should be used. These functions are usually identified during the feasibility study and defined in the contract model. The following are some of the key responsibilities of the private partner:
- Design (D): Includes creating a detailed project plan, outlining the project’s scope, and identifying key project milestones.
- Build (B): When PPPs are used for new infrastructure assets, the private partner is typically required to build the asset and install all equipment.
- Rehabilitate (R): When a PPP involves an existing asset, the private partner may be responsible for rehabilitating or expanding the asset.
- Finance (F): When a PPP includes building or rehabilitating an asset, the private partner is typically also required to finance all or part of the capital and operational expenditures.
- Maintenance (M): Entails maintaining the infrastructure to a specified standard throughout the duration of the contract.
- Ownership (O): The private partner owns an asset throughout the duration of the contract.
- Transfer (T): Involves transferring the asset or the operations & maintenance of a particular project.
- Lease (L): In some cases, the private partner leases assets to the public entity for the duration of the contract.
- Operation (Op): A private partner’s operating responsibilities to a PPP can vary widely depending on the nature of the underlying asset and associated service. For example, a private partner could be responsible for:
- Operating an asset and providing a bulk service to a government off taker; for example, a bulk water treatment plant.
- Operating an asset and providing services directly to users; for example, a water distribution system.
- Providing support services, with the government agency retaining responsibility for delivering the public service to users; for example, a school building that includes janitorial service.
Source: Manual on PPP projects, management and execution – Ministry of Finance (PDF, 1 MB)
UAE’s strategic partnerships with the private sector and international bodies
Learn more about the UAE’s strategic partnerships with the private sector and international bodies in the following key sectors:
Read also about UAE’s global partnership for sustainable development.
Updated on:
11 May 2026
