To enhance resilience for adapting to recent severe issues such as flooding and water shortage, Sponge City (SPC) is being delivered by using Public–Private Partnerships (PPPs) across China. Considering a sustainable implementation, an understanding of and effective management for the environment-related underlying dynamics of the adaptability of SPC PPPs are prerequisite. Therefore, we examined a conceptual model integrated with four external environment dimensions, which is useful for identifying externally environmental effects on the project’s adaptability. By utilizing the structural equation modeling techniques, the hypothesized relationships illustrated in the conceptual model were tested and verified. Empirical evidence indicates that the Political Environment has the highest impact followed by the Social, Economic and Natural Environments. Implications generated from the SEM are then discussed for future improvements. This study provides governments with an insight into assessing external environment effects that are significant for (1) improving the adaptability of their projects and then (2) enabling sustainability for infrastructures.