PPP Fiscal Risk Assessment Model (PFRAM)
PPP FISCAL RISK ASSESSMENT MODEL (PFRAM), developed by the IMF and the World Bank, is an analytical tool to assess the potential fiscal costs and risks arising from PPP projects. In many countries, investment projects have been procured as Public Private Partnerships (PPPs) not for efficiency reasons, but to circumvent budget constraints and postpone recording the fiscal costs of providing infrastructure services. Hence, some governments procured projects that either could not be funded within their budgetary envelope, or that exposed public finances to excessive fiscal risks. As an analytical tool, PFRAM helps country authorities quantify the macro-fiscal implications of PPP projects, understand the risks assumed by government and identify potential mitigations measures. Since launched in April 2016, PFRAM has been used not only in the context of IMF and World Bank technical assistance, but also by country authorities—mainly PPP units in ministries of finance—to better understand the long-term fiscal implications of PPP projects. Building on lessons from two years of use, the new version of PFRAM allows for the analysis of a portfolio of projects.