Investing in Ukraine's reconstruction: what the law on public-private partnership will change
Today, the Parliament passed a very important law on public-private partnerships (PPPs) in the second reading. It is no exaggeration to say that we have been working for years to get it passed .
Thus, in Ukraine, infrastructure will be able to be built or restored not on the principle of "everything from the budget" but in partnership with business and donors. On the basis of public-private partnership. The way it happens in the world.
Although the concept of PPPs has existed in Ukraine for a long time, we have only signed two large concession agreements so far. Thanks to the changes to the legislation, we expect the PPP mechanism to finally work and bring us up to USD 1 billion in investments in specific projects in the coming years. First of all, these may be the following areas: ports, hospitals, municipal facilities.
The law allows us to introduce a hybrid PPP model that combines the budget, grants from our international partners, and private financing. It is cheaper for the state, faster and safer for the investor.
Small communities will now be able to implement projects without expensive feasibility studies - a concept is enough. For example, a small rehabilitation center, kindergarten, or affordable housing. And state-owned companies, such as Ukrzaliznytsia, will be able to launch PPPs without a bureaucratic maze. This will allow them to restore train stations, and Ukrenergo to restore power grids .
Another important change is that the state will have the right to launch a simplified procedure for recovery projects: in medicine, transportation, energy, education, and social services. It will be valid during martial law and for another 7 years afterwards for projects of any size.
In addition, the law introduces additional guarantees for investors (e.g., regarding the stability of contractual terms) and updates more than 30 sectoral laws.
Now, the PPP will be able to work in areas where it was almost impossible before due to legal barriers, such as healthcare, education, culture, transportation, or housing.
