For widespread uptake of NBS throughout the city, the inclusion of private actors is essential. Public-private partnerships (PPPs) are a viable option to achieve this goal. Public and private entities may enter contractual agreements aimed at creating, operating and maintaining NBS. PPP schemes yield benefits for both public and private actors. Public entities gain access to additional capital provided by private partners, while the private entities might gain additional business opportunities. There are different forms of PPPs thatcities and private partners can adoptto govern and co-fund NBS. These range from small-scale and short-termarrangements to multi-stakeholder and long-termarrangements. According to the World Bank (2017), PPP contracts can be characterised by three parameters:

- The type of assets involved. Private investors might help create new assets (such projects are often referred to as greenfield projects) or upgrade and manage existing assets that are transferredfrom the public to the private sector (brownfield projects).

- The role of the private actor. Under a PPP contract, private actors can take up various roles including designing, building or rehabilitating, financing, maintaining or operating the asset. The different functions and services provided by the private actors call for different types of contracts. Some examples of the typical PPP contracts include Design-Build-Finance-Operate-Maintain (DBFOM), Operations and Maintenance, and Rehabilitate-Operate-Transfer contracts,amongother arrangements (The World Bank,2017).

- The source of revenue for the private actors isorganised either in a user-pays or in a government-pays scheme. In eithercase,the private actors’compensation should be linked to the performance of the asset in place. If the private actorsprovide poor service the remuneration in either revenue scheme should decrease.

PPPs could also include business improvement districts (BIDs), sponsorship schemes and green barter arrangements.Forming a PPP for co-funding purposes in most cases implies establishing aSpecial Purpose Vehicle (SPV) –a specific company formed for the purpose of financing the project. The SPV raises funds through equity and debt by securing the funds from the shareholders of the company, bonds and credit institutions. The public actors might participate in the finance structure of PPP by providing debt, equity or guarantees. One of the most criticalcomponents of the successful functioning of a PPP is the bankability of its projects. This means that a SPV needsto demonstrate sufficient capacity to service its debt, which in turn implies adequate cash flows and risk variation.

Even though PPPs have been identified as one of the most promising financial cooperation mechanisms for NBS implementation, they remain highly project and context-dependent. This means that there is no one blueprint on how to successfully establish an effective PPP and replicate that across a variety ofdifferent NBS interventions and urban settings. In most cases private sector enters PPP schemes due to positive cost-benefit expectations from their investments. Since various NBS have a range of intangible public benefits that are not directly “monetizeable”, it might discourage private sector to enter into such PPP agreements. To mitigate this situation (and prevent market failures), local governments might need to offer additional incentives for private businesses (e.g. applying separate tax rates, local tax exemptions for PPP projects) (Merk et al.,2012).Furthermore, the role of the local governments could be to highlight where positive ROIs arise and engage with the private sector on cost-benefit sharing. In sum, PPPs are often very useful to generate wider ownership and diversify investment risks. As such, PPPs facilitate a joint-up approach to sustainable urban development and planning and should be seen as both ways of raising additional sources of capital, while increasing stakeholder participation in particular NBS interventions.