An interpretive structural modeling-based hierarchical analysis of risk factors for sustainable power infrastructure public-private partnerships in developing countries

Despite the increasing reliance on private capital in the power sector, Public-Private Partnership (PPP) projects in developing countries often struggle with sustainability due to complex, interdependent risk environments. This study aims to identify the interrelationships among factors that threaten sustainable PPP-based power infrastructure development and to propose effective mitigation strategies. Risk factors were consolidated and classified into Construction, Operational, and General categories. Using Interpretive Structural Modeling (ISM), hierarchical levels were assigned to these factors to visualize their structural dependencies. The analysis revealed that Political, Legal, and Environmental risks are located at the foundational levels (Levels VI and V) of the hierarchy, acting as primary drivers that trigger subsequent operational failures. Given their critical roles, these factors were prioritized to establish targeted risk mitigation strategies. To address Political risk, the study proposes mitigating political uncertainty and diversifying financing channels. Regarding Regulatory risk, it emphasizes balancing investment between power generation and transmission and distribution (T&D) grid infrastructure. For Environmental risk, ensuring social acceptance and environmental reputation is suggested. The findings provide a systematic basis for practical policies by accounting for risk interrelationships rather than treating factors in isolation. Theoretically, this research shifts the academic focus from simple risk identification to a structural understanding of risk propagation within the power value chain. By elucidating the hierarchical nexus between grid constraints and project sustainability, this study offers a strategic framework for ensuring long-term viability in complex developing markets. • Examines risk factors affecting PPP power infrastructure in developing countries. • Uses interpretive structural modeling to analyze risk factor interrelationships. • Political, regulatory, and social risks emerge as the most influential drivers. • Construction risks have high driving power; operational risks have low driving power. • Proposes priority mitigation strategies to enhance sustainable PPP development.