Growth & Jobs | DBJ, a catalyst for nation-building

IN RECENT years, public-private partnerships (PPPs) and privatisation have emerged as pivotal fiscal and economic strategies to foster national development, particularly in countries like Jamaica. These collaborative efforts between the public sector and private enterprises aim to enhance the country’s public infrastructure, stimulate economic growth and improve public services.

PPPs involve long-term, performance-based agreements between governments and private entities, where private entities finance, construct, operate and maintain public infrastructure or services, and the associated risks and rewards are appropriately allocated to each party. The infrastructure is paid for by the users or by the government, or a combination of both. This model leverages private-sector efficiency and innovation, leading to cost-effective and timely project completion. Privatisation, on the other hand, entails transferring ownership or management of state-owned enterprises to private investors, aiming to boost operational efficiency and reduce the fiscal burden on governments.

PPPs and privatisation (P4) attract private capital for critical projects such as roads, ports, airports, water treatment plants, hospitals and schools, which might otherwise face delays due to fiscal constraints. This, in turn, drives economic growth by improving infrastructure and stimulating economic activities and job creation. Additionally, the involvement of private entities often leads to better management practices, resulting in higher-quality and more accessible public services. From a fiscal standpoint, these collaborations allow governments to allocate resources more efficiently, focusing on regulatory and social responsibilities.

The Development Bank of Jamaica (DBJ), as the central implementing agency of the Government of Jamaica’s (GOJ) P4 Programme, plays a crucial role in facilitating PPP and privatisation initiatives within the country. As a government-owned institution, DBJ is committed to promoting economic growth and development by providing technical support for the development and implementation of resilient infrastructure projects and divestments. The DBJ’s involvement ensures that such projects align with GOJ policies, national priorities, and deliver tangible benefits to the populace.

The DBJ possesses a unique and highly specialised skillset, cultivated through global training and practical experience in managing PPP transactions. It plays a pivotal role in collaborating with government ministries, departments, agencies, and other key stakeholders to develop projects suitable for PPPs or privatisation, based on Cabinet directives. By managing multi-disciplinary teams, including advisers, the DBJ supports Cabinet-appointed enterprise teams to strategically structure and market investment opportunities that attract private capital, while safeguarding public interests. Leveraging its distinctive expertise, the DBJ also strengthens public-sector capacity by providing targeted training and resources, equipping public entities to effectively develop and manage PPP initiatives. Additionally, it plays a critical role in policy development, working alongside the Ministry of Economic Growth and Job Creation and the Ministry of Finance and the Public Service (MoFPS) to establish transparent, robust legal frameworks and processes that facilitate the success of P4 transactions.

Since 2009, DBJ has supported 38 PPP and privatisation transactions, across nine sectors, facilitating over US$460m in revenues to the Government and US$1.3b in investments in the economy. Some of the successful P4 transactions completed include the Kingston Container Terminal PPP, Caymanas Track Limited, Norman Manley International Airport PPP, Wigton Windfarm Limited and the Greater Bernard Lodge Development. The GOJ’s PPP Programme is internationally recognised and ranked sixth in Latin America and Caribbean in the latest INFRASCOPE ranking.

TRANSJAMAICAN HIGHWAY LTD: ANOTHER INVESTMENT OPPORTUNITY FOR JAMAICANS

Most recently, the DBJ was mandated by the MoFPS and Cabinet to execute the sale of the National Road Operating and Constructing Company (NROCC) shareholding in the TransJamaican Highway Ltd. This major infrastructure project has been instrumental in improving the island’s road network, enhancing transportation efficiency and contributing to economic growth.

The GOJ, through NROCC, seeks to raise approximately J$9b via an Offer for Sale of Shares on the Jamaica Stock Exchange. This will allow ordinary Jamaicans to invest in the highway, promoting broad-based ownership and participation in national infrastructure.

DBJ has been instrumental in this process, providing transaction management support, ensuring that the public offering aligns with best practices and delivers value to both investors and the GOJ.