Sustainable public-private partnerships: Ageas and FEB approach government
Belgian public investments have been low by design for decades, and they are not enough to meet the complex and far-reaching challenges of tomorrow, like the green and digital transitions. The private sector appears to be particularly enthusiastic about participating in large government investments, but unfortunately, the supply of concrete projects remains limited.
The government faces a major financial challenge in the coming years and decades, due to climate change, mobility and energy issues, digitalization, scarcity of resources and the increasing pressure on welfare and health. In light of the broad social impact and complexity of these challenges, it is important that private and public partners are able to find and support each other.
When the VBO called out to the private sector, in the context of the Belgian National Plan for Recovery and Resilience, it was able to collect over 140 investment projects. However, sustainable public-private partnerships are largely hampered by the limited supply of public sector projects. Fortunately, policymakers are aware of this, and Thomas Dermine, Secretary of State for Relaunch and Strategic Investments, highlights sustainable public-private partnerships as a key component of his relaunch plan.
With regard to financial funding capacity, Ageas also sees a natural fit with sustainable public-private partnerships. For insurance companies, as cautious investors, investing in infrastructure projects is a good match. Not only are they low-risk, but thanks to their long duration, they also fit within the long-term guarantees offered to customers. They are also more predictable than other investments and offer higher returns than low-yielding government bonds.
"Ageas views public-private partnerships as a win-win-win story. They are a clear and important component in our socio-economic role as an insurer. For example, a partnership project can ensure that the investment of the insurance premiums that we receive provides sufficient yield for the supplementary pensions that we guarantee. That is the beauty of a PPP (Public-Private-Sustainable Partnership). We use our clients' pension reserves to build infrastructure for the next generation(s). That provides a return to the current generation so they can enjoy a comfortable retirement. Along the way, the pension gap narrows for the government. The circle is complete, every party wins: the insurer, the citizen and the government." said Hans De Cuyper, CEO of Ageas.
"Public investments are important to strengthen the long-term growth potential of our economy on the one hand, and to support the energy and environmental transitions on the other. Therefore, sustainable public-private partnerships remain important tools for the VBO in terms of realizing new public investments that contribute to our prosperity in the short- and long term. Thus we create real value for an inclusive society in which we leave no one behind" said Pieter Timmermans, CEO of VBO FEB.
Source: Ageas newsroom