Public-Private Alliances: a sustainable way to promote productive investment in the Dominican Republic
Xochitl Calderón
January 20, 2026
Public-Private Alliances: a sustainable way to promote productive investment
In an economic context characterized by sustained growth in recent years, although with a recent slowdown with expansion projections below 3%, lower than the potential growth rate, which fluctuates annually depending on the global and national context, around 5.0%, the Dominican Republic faces growing challenges to sustain its pace of development. At the beginning of the year, the economic analysis also becomes an opportunity to pause, observe with perspective the path that is opening up and reflect, with serenity, on the challenges that still remain to be faced. Among these, fiscal limitations stand out as a key factor that restricts the State's ability to boost public investment and meet growing socioeconomic demands. In this scenario, understanding the causes of these restrictions and promoting innovative mechanisms, such as Public-Private Partnerships (PPP), is essential to strengthen competitiveness, attract private capital and move towards a more balanced and sustainable development.
The current fiscal panorama of the Dominican Republic reveals a trend that limits the State's ability to invest in productive sectors. Although tax revenues have shown sustained growth, rising from around DOP660 billion in 2019 to more than DOP1.2 trillion in 2024, the simultaneous increase in public spending and borrowing has reduced the margin available to finance development and infrastructure projects.
Source: Prepared by BT with information from ONE and Digepres
In practice, a considerable part of the resources is allocated to paying interest on the debt, which limits investment in value-generating sectors. Although the nominal Gross Domestic Product (GDP) has grown constantly, public debt has grown at a higher rate in recent years, evidencing a structural dependence on public credit to cover current spending.
Source: Prepared by BT with information from ONE and DiGEPRES
This situation becomes evident when observing the use of the national budget, where most of the funds are concentrated in current spending, which includes payrolls and basic services. While these commitments rose from DOP 641 billion in 2019 to more than DOP 1.2 trillion in 2024, the money allocated to capital investment for infrastructure works has been significantly more moderate. This difference confirms that the State has fewer of its own resources to boost production, which forces it to seek alliances with the private sector so that the country's development does not stop.
Source: Prepared by BT with information from ONE and Digepres
The fiscal deficit in the Dominican Republic is closely linked to a relatively low tax pressure, between 13% and 14.6% of GDP, below the regional average of close to 20%. This level of collection limits the State's ability to adequately finance its investment and social spending needs without resorting to greater debt, thus affecting medium-term fiscal sustainability.
Source: Prepared by BT with information from the ONE
This slow growth suggests that current economic activity is not enough to fill this productive gap, leaving idle capacity that prevents the country from reaching the production goal that it could really generate with the resources it has available.
Fuente: Elaborado por BT con información de BCRD
The APP as a tool to boost investment
Against this backdrop, Public-Private Partnerships (PPP) emerge as an efficient mechanism to channel private resources towards projects with economic and social impact, without increasing public debt. Law 47-20 provides the legal framework that allows structuring initiatives in strategic sectors such as infrastructure, energy, transportation and urban development, generating synergies between the State and the private sector.
Projects such as the rehabilitation of Puerto Duarte in Arroyo Barril, developed under this scheme, demonstrate the potential of PPPs to transform public assets into drivers of development, as long as they have a solid technical and financial structure.
The quality of the design, risk management and the predictability of flows are decisive factors to ensure the feasibility of each initiative and attract long-term institutional capital.
International lessons: the Chilean model
Chile's experience offers a valuable reference in the region. Its public concessions model combines institutional stability with innovative financial mechanisms, such as the “Least Present Value of Revenues” (LPVR).
This system awards projects to the bidder that requires the lowest present value of income to recover its investment, reducing discretion and increasing competition.
Adapting a similar approach in the Dominican Republic, for example, integrating the LPVR with exit value mechanisms backed by the State or trusts, could improve investor confidence and reduce exposure to financial risk, without compromising fiscal responsibility.
An opportunity to create shared value
The APP should be seen as a sustainable development tool. Its success depends on rigorous planning and multidisciplinary risk analysis (financial, political, regulatory, environmental, social, operational and construction). Transparent management of these factors is what guarantees the return and benefit for the sectors involved.
The APP today represent a concrete way to promote productive investment and strengthen the country's competitiveness, under schemes that promote shared value and long-term sustainability.
In this process, having specialized technical advice is essential to structure projects that are financially viable, socially responsible and sustainable.
From our experience at Baker Tilly, we have proven that the right combination of strategic vision, financial analysis and risk management can make the difference between a successful project and a missed opportunity. We promote this vision through our structuring services (infrastructure planning, feasibility analysis, commercial structuring, debt and capital structuring, support in the bidding process) and our investment services (construction of financial models, M&A, financial closing and due diligence). In this sense, Baker Tilly is positioned as a key partner to transform strategy into results, promoting sustainable projects that generate value and contribute to the country's economic growth.
Authors: Steven Rosario and Juan S. Mendoza
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