Public Private Partnerships (PPP), a term which refers to a wide spectrum of possible relationships between public and private actors for the cooperative provision of urban infrastructure services, has been proven to be a feasible and attractive development modality. PPP covers a range of partnership arrangements between public and private sectors from operational type: service, management, leasing contracts and concession to investment types: built operate transfer and others.

PPP arrangements combine strengths of private sector innovation, access to finance, technological knowledge, managerial efficiency and entrepreneurial spirit with the social responsibility, legal authority, public accountability, administration network and ability to take risks of the public sector. The cooperative functioning allows for potent and effective solutions to address and solve pressing urban environmental challenges. But the public sector retains ultimate responsibility and democratic accountability for defining the objectives, seeing that they are delivered to the standards and ensuring wider public interests are safeguarded.

The institutionalized form of PPP in Nepal started with Ministry of Local Development executed and UNDP funded project Public-Private Partnership for Urban Environment (PPPUE) in 2002. Until the initiation of PPPUE, the concept and utility of the PPP approach in the provision of basic services and infrastructure was not clear in Nepal. Since the project's launch, PPPUE together with its partners have worked towards raising awareness of the potential of PPPs at both local and national levels and creating an enabling environment for PPPs in local urban service delivery with continued capacity building and policy/legislative interventions. PPPUE has raised the interest of various development stakeholders in PPP initiatives through concept dissemination, capacity development, policy guidance and model PPP projects.