Despite the increasing occurrence of policies aimed at mobilising the financial and human resources of the private sector, most urban local governments responsible for urban basic services in the South do not have the capacity to initiate and sustain partnerships. Nor do they understand how they can create partnerships that target the poor. This sourcebook provides practical information and guidance to do so. With extensive illustrative material from Africa, Asia and Latin America, it sets out a strategic framework for building municipal capacity to create pro-poor partnerships. It focuses on implementation rather than policy. It locates private sector participation within the broader urban governance and poverty reduction agenda. And it is above all concerned to supply information on the issues and processes involved in making the public-private partnership (PPP) approach appropriate for service delivery in developing countries. The second in a series of capacity-building sourcebooks, it will be invaluable for those concerned with the capacity of local levels of government: policy-makers, municipal authorities, development agencies and practitioners, and all those involved in urban governance and poverty reduction.