Partnerships to Drive Infrastructure Development in Jamaica

By Daniel Molina and Francisco Fernandez Funes

As the first lights of the morning shine over Kingston, Roger Thompson smiles thinking about the passengers arriving at the Norman Manley International Airport (NMIA). Like every day, he gets ready for his duties as director of Kingston City Guided Tours, a small company that offers guided sightseeing experiences in and around Jamaica’s capital. Thompson, who oversees the firm’s operations, is focused on growing the business. And he has reason to be optimistic: keeping up with evolving technologies and growing passenger demands, the renovation of Kingston’s airport is bringing more and more travelers—and potential customers of Kingston City Guided Tours—to the Caribbean country.

"The improvements at the NMIA are enhancing the travel experience of the visitor to Kingston and making tour packages more appealing," he says.

In 2018, IFC was the transaction advisor to the Government of Jamaica (GoJ) for the successful 25-year concession to operate, expand and modernize the NMIA. This project is the foundation of IFC’s Public-Private Partnerships (PPPs) work in Jamaica. Despite a delay due the COVID-19 pandemic, the project has resulted in a substantial upgrade of the airport infrastructure and resulted in the creation of jobs, all while providing a revenue share of over 50 percent to the government—surpassing that of the private sector partner.

Currently, the airport—operated by PAC Kingston Airport Ltd.—serves 1.7 million passengers every year, giving a boost to the tourism industry, the country’s primary economic driver. Like Thompson, many small business owners are beginning to benefit from the renewal of the NMIA, a project that demonstrates how collaboration between the public and private sectors can address critical infrastructure needs.

This fruitful PPP motivated the GoJ to replicate the mechanism in other sectors with the objective of improving the quality of public services for the Jamaican people. But instead of going transaction-by-transaction, IFC designed a programmatic approach for PPPs to enhance efficiency and results, further enabling private capital to be invested where the needs are greatest. 

A dynamic collaboration

The PPPs programmatic approach—formalized through the signing of an Memorandum of Understanding (MOU) by IFC Managing Director, Makhtar Diop, during his recent visit to the country—is poised to streamline the development of key infrastructure projects across various sectors in the island nation. Building on previous and current engagements, including advisory services for four projects (three roads in the country’s north and the National Broadband Project), the strategic framework agreed by the GoJ and IFC contemplates five additional PPP transactions in the roads and water spaces, and the preparation of another five in renewable energy, healthcare, and water and sanitation. These projects, to be executed concurrently, are expected to lead to over $2 billion of private investment in Jamaica in the next few years.

"Designed to increase market interest and capacity, this new approach will allow the GoJ to attract top quality investors and deliver infrastructure solutions that will improve the quality of life for the Jamaican people," said Jamaica’s then Minister of Finance and the Public Service and current International Monetary Fund Deputy Managing Director, Nigel Clarke.

Acknowledging the former minister’s vision and commitment, Ronke-Amoni Ogunsulire, IFC Regional Manager for the Caribbean, explained that “PPPs offer a way for governments to leverage the expertise and efficiency of the private sector, raise capital, and spur development, and the programmatic approach will do so in a more efficient and coordinated manner". 

Bridging infrastructure gaps

Investing in climate-smart infrastructure is key for resilience and reducing environmental impact, especially in areas like transport and energy. The Latin America and the Caribbean region needs to invest over 3.1 percent of GDP annually to close infrastructure gaps, compared to the 1.8 percent invested between 2008 and 2019. This shortfall is reducing annual GDP growth by 1 percent.

In this context, PPPs play an important role. In Jamaica, advancing them through a programmatic approach can foster a virtuous cycle centered on one crucial aspect: a strong track record will heighten private sector interest in projects and accelerate the development of key infrastructure, ultimately delivering better opportunities for its citizens.

In the last 10 years, IFC has made several investments in Jamaica to support the private sector and foster productivity, inclusion, and sustainability. Undoubtedly, the signing of the Jamaica PPPs Programmatic Engagement MOU marked a major milestone for IFC’s work in the country. But it didn’t happen overnight. It is set over rock-solid foundations and successful projects like NMIA, which will propel the nation’s economy and empower local businesses.

The improvements in the airport will result in enhanced facilities and larger terminals, allowing for more flights and passengers," says Thompson of Kingston City Guided Tours. "This can help our company to attract more customers and show them everything this beautiful country has to offer".