Critical managerial measures on financial risks of sustainable public–private partnership projects: a PRISMA review

Abstract

Purpose

Public–private partnership (PPP), a project financing arrangement between private investors and the public sector, has revolutionized the approach to the funding and development of public infrastructure worldwide. However, the increasing cases of financial risks and poor financial risk management related to the model threaten the sustainability and financial success of PPP projects leading to huge financial investment losses. This study aims to review existing literature to establish the key measures to control the financial risks of sustainable PPP projects.

Design/methodology/approach

A PRISMA-compliant systematic literature review method was used in this study. Data were sourced from academic databases consisting of 56 impactful peer-reviewed journal articles.

Findings

The review outcomes demonstrate 41 critical factors (measures) in mitigating the financial risks of sustainable PPP projects. They include minimum revenue guarantee, strategic alliance with private investors, financial transparency and accountability and sound macroeconomic policies. The principal results of the study were categorized and conceptualized into a financial risk management maturity model for sustainable PPP projects. Lastly, the study reveals that further studies and project policies must focus more on addressing financial challenges relating to climate risks, and health and safety concerns such as COVID-19 outbreak that have negative impacts on PPP projects.

Research limitations/implications

The results provide essential research gaps and directions for future studies on measures to mitigate the financial risks of sustainable PPP projects. However, this study used small but significant existing publications.

Practical implications

A checklist and a conceptual maturity model are provided in this study to help practitioners to learn and improve upon their practices to mitigate the financial risks of sustainable PPP projects.

Originality/value

This study contributes to managerial measures to reduce huge losses in financial investments of PPP projects and the attainment of sustainability in public infrastructure projects with a financial risk maturity model.

Citation

Akomea-Frimpong, I., Jin, X., Osei-Kyei, R. and Pariafsai, F. (2023), "Critical managerial measures on financial risks of sustainable public–private partnership projects: a PRISMA review", Journal of Financial Management of Property and Construction, Vol. 28 No. 3, pp. 398-422. https://doi.org/10.1108/JFMPC-12-2021-0070