The Potential Power of Public-Private Partnerships (PPPs) in Financing Digital Development
In February 2026, the FII Institute published the report Public-Private Partnerships (PPP): Financing the Future Impact, developed with the Digital Cooperation Organization, Kearney, and the Voluntary Carbon Market Company. The report shows that PPPs anchored in citizen outcomes and measurable social impact are outperforming traditional "profit-only" models in attracting capital. Nevertheless, it also notes that across seven countries surveyed, only 23% of citizens believe PPPs benefit everyone equally, whereas among business and government leaders the figure rises to 41%.
Much of this difference comes down to how success is measured as it differs within levels that affect people differently (inputs, outputs, outcomes, impact). Specifically in digital infrastructure, where most of the global financing conversation is heading. The report estimates the global infrastructure financing gap could reach USD 15 trillion by 2040, with an annual shortfall of USD 130 to 170 billion in Africa alone. Public budgets will not close it without other sources of capital, so how that capital is structured will matter as much as how much of it arrives.
Why digital assets change the PPP equation?
A traditional infrastructure PPP is built around a physical asset where a private partner finances and builds a road, operates it for 25 years (or more), and receives payments when the road is available and maintained. Success is visible considering the road exists, traffic flows, and the contract's performance metrics are met.
However, digital infrastructure works differently in many ways. When the asset is a payment platform, a digital identity system, or a data exchange layer, delivery is only the starting point. A system that is built but not adopted generates maintenance costs without generating public value. Three questions become central here: Do people actually use it? Do they trust it? And can the government maintain and evolve it without depending on a single vendor?
That last question has no clear equivalent in traditional infrastructure. A concessioned highway can be re-tendered, whereas an identity system built on proprietary code and closed data formats is harder to transition. The World Bank's approach to digital public infrastructure now recommends open-source technology or open APIs precisely to prevent vendor lock-in, and emphasizes that the goal is real-world impact rather than technology deployment.
Four levels of success, and where capital is moving
The shift the FII report documents becomes clearer with a simple hierarchy. Any infrastructure project can be measured at four levels, each answering a different question.
Inputs: was the money spent? This is the metric of traditional public procurement that confirms that resources flowed (budget executed, capital deployed, procurement completed), but it says nothing about what they produced or achieved. A project can score perfectly at this level and still deliver no service at all.
Outputs: was it built? This is where most PPP contracts concentrate, since availability payments reward exactly this level (kilometers of fiber laid, system delivered, technical uptime achieved). For a road or a bridge, outputs are a reasonable proxy for success, but for digital infrastructure a payment platform can be fully operational and remain empty.
Outcomes: does it work for people? This is what the FII report calls citizen outcomes, and it is the first level at which the public's experience enters the contract (active adoption, transactions per user, time saved on government services, citizen trust in the system). As implied earlier in the article, measuring here shifts the behavior of the actors involved, since a private partner paid on adoption acquires a direct stake in usability, reliability, and trust.
Impact: did anything structural change? This is the hardest level to attribute, since many forces shape these results at once (financial inclusion, economic formalization, poverty reduction), and it is the one donors and impact investors ultimately look for.
The report's central signal is that capital is migrating from the second level toward the third and fourth. Investors facing stricter transparency requirements and governments working to strengthen public trust are converging on the common demand that contracts pay for use, trust, and durability.
Tanzania offers a working example
The Bank of Tanzania built its national interoperable payment system, the Tanzania Instant Payments System (TIPS), on Mojaloop, an open-source software platform designed for inclusive instant payments. Private firms participate throughout the system in two ways: banks and mobile operators connect to it, and integrators build and maintain its components. The code, however, remains open, the standards interoperable, and the system under central bank ownership.
What is relevant to notice from this example is the chosen governance structure. Tanzania is not alone in keeping ownership of the rails public while the private sector participates as builder, integrator, and innovator on top. India's Unified Payments Interface (UPI) is managed by a nonprofit created by the central bank and the banking association, which purchased source code from vendors and adapted it internally. Brazil's payment system called Pix, is operated directly by the central bank, with private institutions building services on top. The difference between the three lies in the entry cost of each path. Brazil's model demands strong engineering capacity inside the public sector, and India's requires deep institutions and a market large enough to justify them. Tanzania reached the same governance outcome through open-source technology, a path that requires neither.
The Tanzania model is now extending regionally. In November 2025, the East African Community began building a regional instant payment network with a Rwanda-Tanzania pilot, working with central banks, AfricaNenda, and the Mojaloop Foundation.
Now, open source does not come without its risks and it does not guarantee good governance. Research on public-sector software procurement documents soft lock-ins even in open-source projects, when a single supplier concentrates the technical knowledge and the government cannot credibly switch. In digital PPPs, as in traditional ones, government capacity to structure, supervise, and exit contracts remains the binding constraint more often than capital does.
What this means for development institutions
For UN agencies and multilateral organizations, this shift is worth exploring for practical reasons. Grant budgets are limited and, in most agencies, shrinking. When those resources are used as catalytic capital instead of direct financing (for example, through guarantees, first-loss positions, or technical assistance), each grant dollar can mobilize several times its value in private investment. A well-structured digital PPP also helps answer the question that every agency faces from its donors of what happens when the program ends. A contract designed around adoption, trust, and vendor independence builds the answer into the project itself, because the system has a revenue model and an operator before the grant funding runs out.
Agencies also bring legitimacy with governments and a normative mandate to these partnerships, which the private sector cannot supply on its own. This means they can condition the entry of private capital on open standards, data protection, and inclusion metrics. Considering the trust deficit that the FII report quantifies, these conditions do not limit the transaction; they are part of what makes it financeable, because outcome-level investors need exactly that evidence of adoption and trust to commit capital.
As the FII report shows, investors are already responding to how projects are structured, not just to how much financing they need. In digital infrastructure, this means writing contracts that measure success at the outcome level, where citizens actually experience it, and choosing governance arrangements that keep ownership of the rails public while private capital builds services on top of them. For the institutions financing digital development, the combination of contract design, outcome measurement, and government capacity will likely determine which projects earn both the funding and the public trust they need to be successful.