Financial Public Private Partnerships for the South-African National Defence Forces
His main message was that innovation could speed up if private funds are used effectively in a Public Private Partnerships for Defence. Similarly, private financing methods could be used for major programmes: manufacturing of capabilities and in-service support. It could be important for the South African Defence to take advantage of these opportunities to strengthen its capabilities.
Conclusions
1. Progress in Europe
Financial
Public Private Partnerships are pursued by the European Union, NATO and several
European member states. These seem to be quite complex to develop, but it has
advantages to involve the financial sector in national security. Certainly, since
the war in Ukraine has taught us that peace is more fragile than we thought.
However,
misunderstandings, emotion and lack of knowledge from both the military and the
financial sector are potential stumbling blocks that need to be avoided.
2. FPPP for innovation and businesses
Relatively
small Defence related innovations of a few million euros are almost impossible
to finance by private funds. Development of a large and specialised
international fund to invest in multiple companies and projects seems more realistic. However, participation of national or supranational governments
with some form of guarantee is indispensable to make this possible.
3. FPPP for major programmes
Institutional investors are quite interested to supercharge important
replacement programmes or procurement of new capabilities. Long-term, high
financial volume and low financial risk are the keywords for this solution. For
the South African National Defence Forces, the Multi-Mission Off-Shore Patrol
Vessels, their on-board helicopters and the Maritime Patrol Aircraft programmes would probably be good candidates.
To achieve this, an intensive and open consultation based on trust will be
necessary between government, industry and investors.
For more information contact Jan Wind at jw@fedta.eu
© EDTA 2023