Good news: on the 15th of February, 2022, the Verkhovna Rada of Ukraine adopted in the second reading the bill № 5090 “On making amendments to the Budget Code of Ukraine on the settlement of budgetary relations during the implementation of agreements that regulate public-private partnership, including concession agreements”. On the 16th of August, 2022, the bill on long-term liabilities in the PPP field was returned with the signature of the President of Ukraine.
The goal of the bill is to ensure the full functionality of the PPP (concession) mechanism and the practicality of the usage of the Laws of Ukraine “On Public-Private Partnership” and “On Concession”. The bill also allows to provide private partners (concessioners) with guarantees that the government will fulfil its obligations in the field of PPPs, including the provision of state support for PPP implementation.
For a whole range of PPP projects, including social infrastructure development (for instance, projects in fields of education, healthcare, culture, housing and communal services, the road sector), the issue of long-term liabilities is critical. As of today, the state cannot accept long-term liabilities because of the principle of three-year budget planning.
Bill № 5090 entails the implementation of an effective mechanism for government financing of long-term liabilities involved in PPP projects (concessions). From now on, government support of the private partner will be guaranteed, predictable and a priority, which is a positive indicator for the market and prospective investors.
We are certain that the adoption of bill № 5090 will create an influx of investment in PPP (concession) projects, financing the modernization of infrastructure as well as the creation of new facilities that will provide socially significant services.
You can learn more about it on the official website of the Verkhovna Rada of Ukraine:
Featured image: https://www.rada.gov.ua/en/news/News/page/en/news/News/147657.html