Public-Private Partnerships and Surety: Why PPPs Are Driving Bond Demand Globally

15 January 2026

PPPs and the Need for Financial Security

Public-private partnerships have become a central feature of infrastructure delivery across the world. Governments in Africa, the Middle East, Southeast Asia, and Latin America are using PPP frameworks to mobilise private capital for roads, ports, hospitals, schools, and energy infrastructure — assets that would otherwise require full public funding that many governments cannot sustain.

The defining characteristic of a PPP from a bonding perspective is that it combines the complexity of a private commercial contract with the accountability requirements of public procurement. Employers — often government bodies or publicly mandated entities — require contractors to provide robust performance security. Funders — development banks, commercial lenders, or equity investors — require contractual protection for their capital. The result is a bond and guarantee structure that is typically more demanding than a standard construction contract.

What PPP Bonds Look Like

A typical PPP contract may require the contractor to provide a performance bond covering a percentage of the contract value, an advance payment bond if mobilisation funding is provided upfront, and in some cases a maintenance bond covering the defects liability period. The form of these instruments — whether on-demand or conditional, the governing rules, the acceptability of the guarantor — will be specified in the contract and may be subject to approval by the project's funders.

The surety and guarantee market provides around 58% of the contract security in PPP frameworks globally, according to sector analyses, with the balance provided through banking channels. As PPP activity grows in emerging markets — driven by fiscal constraints on public spending — surety's role in this segment is expanding.

The Scale of PPP Activity

Saudi Arabia's Vision 2030 programme, which relies heavily on PPP structures to mobilise private investment, is among the largest drivers of surety demand in the current cycle. Morocco's World Cup infrastructure development, structured partly through PPP and private investment channels, is another. Across Sub-Saharan Africa, the African Development Bank has been actively promoting PPP frameworks as a mechanism for closing the infrastructure financing gap.

How We Can Help

Solidum Global facilitates access to performance bonds and advance payment bonds for contractors working on PPP and infrastructure contracts across international markets. Submit an enquiry and we will assess your requirement and connect you with the right partner.

Reference: Maximize Market Research — Surety Market Global Industry Analysis and Forecast 2024–2030: maximizemarketresearch.com/market-report/surety-market/185094/

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