The contract said take-or-pay. The utility took the risk. The budget took the bill.
Private generators sell to the state utility, PLN, under take-or-pay clauses that require it “to pay for a minimum contracted amount of power whether or not it dispatches electricity”. A 2015 plan for 35 GW helped build a surplus that runs to about 2028. The tariffs PLN charges are held below cost.
Take-or-pay worked exactly as designed. Lenders got a revenue line they could bank. The demand risk did not disappear — it moved to the one party that could not refuse it.
The State ran the buyer. The generators financed it. Now the Treasury pays.
Air-e serves 1.4 million customers on the Caribbean coast. The State has run it since September 2024. It kept buying electricity. It stopped paying for it. Creditors were told not to cut it off. The generators carried the bill — until a budget bill listed in Congress on 25 September.
The bill’s own words: the debt became “a forced transfer of risk” onto the country’s generators. And its own rule: if a buyer cannot be cut off, it falls to the State to provide the source of payment.
The hardest asset in water. Five bidders. The buyer belongs to the Ministry of Finance.
Wastewater is where water PPPs usually stall: someone has to pay for treating it. On 28 September SHARAKAT, the State’s water-partnership company, received bids for the Riyadh East plant — 200,000 m³ a day, 25 years, build-own-operate-transfer. One buyer. Standard contracts. Owned by the Ministry of Finance.
Then it shows its hand. On its last award, a pipeline to Qassim, it published every bidder’s price: 2.627 SAR/m³ for the winner, 3.262 and 3.324 for the rest. The winner, almost a fifth below the runner-up — in public.
Don’t wait for the buyer to pay. Make it put up half the money.
The Olifants bulk-water scheme in Limpopo is owned through a water user association: government and the mines that need the water, 50:50. Stage 1 — R8.5 billion of pipelines, pumps and treatment works — closed in December. The buyers are not a promise on paper. They are co-owners.
On 25 September the Treasury signed the State’s half: USD 200 million from the New Development Bank, 11 years, SOFR plus 0.985%. Good money. One thing left to price: a floating dollar loan behind a service paid in rand.
Half of what you pay for solar power is the price of trust.
The IEA’s World Energy Investment 2026: in emerging and developing economies, capital costs at least twice what it costs in advanced ones. And it is at least half of the levelised cost of solar power — against a third in advanced economies and China.
Water says the same. In a World Bank model of an Egyptian desalination plant, cheaper debt and a well-used guarantee cut USD 0.13 per m³ from a cost of 0.93 — more than economies of scale. Fix the financing and you beat building bigger.
Your PPAs are promises from the State. Price them before you sign.
Indonesia paid for the buyer in the budget. Colombia, in the generators’ balance sheets. Saudi Arabia, in a buyer the market trusts. South Africa, in the mines’ own money. Someone always pays for the buyer. The only choice is when — and whether you knew the number.
Thursday: Why the PPP and Not the Programme — why the sustainability rules written for PPPs never reached the rest of public investment.