ENVIRONMENTAL INVESTMENT

Environmental investments are defined as goods and services that improve the state of the environment, and in which the investor is or should be making profitable investments (UNEP 1995). It provides mechanism of raising and allocating financial resources for the prevention of the negative effects of pollution and resource degradation.

Public-Private Partnership (PPP)

PPP is a cooperative relationship through a ‘joint venture’ that utilize the strength of both public and private sector, where each party have an equal ‘equity’ position in the new organization, and assume co-ownership and co-responsibility based on shared-risk-shared-reward basis.

Private sector – provide capital, technical and managerial and operating expertise to the
                       public sector

Public sector – provide incentives through tax system, regulatory framework for the private
                      sector, facilitate paperwork and approval processes

Advantage of PPP

Investment opportunities and mechanism on private sector participation is based on a number of scientific and socioeconomic studies such as risks assessment and contingent valuation method (CVM).

Investment size is smaller from USD 5-50 million (MYR 19 – 190 million), which fit perfectly into small and medium-sized municipality, where full privatization concept is not an appealing choice.

Civil society participation is recognized and mobilized from the start of the investment process.


                   


 

Examples of potential investment

Municipal solid waste management

Municipal sewerage management

Hazardous waste management

Port and shore reception facility

There are three major steps in implementing the PPP;

First step involves awareness and consensus building among the stakeholders to determine the most appropriate priority environmental concerns that needs to be addressed. This includes identifying potential investment opportunities, conducting pre-feasibility study and building up of a local stakeholder consensus.

Second step deals with packaging and promoting investment opportunities. At this stage, investment opportunity briefs are prepared together with public awareness materials. On the same time, prospective potential partners are determined.

Final step deals with management arrangement, legal and regulatory arrangements, together with a bankable project documents. Continuation of public awareness is essential at this stage to gain support. At last, an MOA will be signed between the partners before setting up of a project operating company.