On the 10th of August, a meeting took place regarding the results of cooperation with the International Finance Corporation (IFC) and prospects of further collaboration on attracting private investments by implementing PPP projects in different sectors of the economy of Ukraine. This was stated by Deputy Minister of Economy, Iryna Novikova, following a meeting of the parties in Kyiv.
The Deputy Minister has emphasized the importance of this collaboration and support provided by the International Finance Corporation (IFC) to the Ministry of Economy of Ukraine, the PPP Agency and relevant public sector bodies, responsible for the fulfilment of PPPs, including the selection, preparation and implementation of pilot projects.
Thus, with the support of the International Finance Corporation, in November 2018, the PPP Agency was formed. It belongs to the management sphere of the Ministry of Economy of Ukraine and is aimed at being an effective institution that provides comprehensive organizational and advisory support to the public sector in preparation and implementation of efficiently structured PPP projects that contribute to the fulfillment of the Sustainable Development Goals.
In June 2019, the Memorandum of cooperation between the Ministry for Development of Economy, Trade and Agriculture of Ukraine and the International Finance Corporation was signed. This document became the basis for obtaining expert support from consultants of the international organization and the Public-Private Infrastructure Advisory Facility (PPIAF) regarding the commencement of the work of the PPP Agency, as well as the development of relevant policies and a strategic plan for its expansion in the medium term.
Aside from this, in order to increase the institutional capacity of public authorities and local governments in the field of PPP, including the preparation and implementation of PPP projects/concessions taking into account the world’s best practices, the International Finance Corporation (IFC), the Ministry of Economy of Ukraine and the PPP Agency have joined efforts and organized more than 12 educational events (conferences, seminars, workshops) for more than 500 people in 2020-2021.
In October 2019 the International Finance Corporation (IFC) and the Cabinet of Ministers of Ukraine signed the Memorandum of understanding, identifying key sectors for the joint implementation of PPP projects. In addition to seaport concession projects, the International Finance Corporation (IFC) is exploring PPP opportunities in the road, rail, energy and medical sectors to attract private investments and stimulate the country’s economic growth.
With the help of the selected consultants, the development of the feasibility study for the concession project of the railway-ferry complex of the state enterprise “Sea Commercial Port” Chornomorsk“ and corresponding property of the SE “Ukrainian Sea Ports Authority” related to this complex was started. Preliminary research and preliminary market consultations have also been conducted to assess the interest of qualified potential investors in:
- Concession of the I and container terminal of the SE “Sea Commercial Port” Chornomorsk“ and corresponding property of the SE “Ukrainian Sea Ports Authority” related to this complex (berths 1 to 6);
- 6 pilot PPP projects in the road sector, selected based on the results of the study “Road PPP Program in Ukraine – ways to engage the private sector to improve, renovate and maintain roads” conducted by experts from the World Bank and the International Finance Corporation (IFC) with the support of the Global Infrastructure Fund (GIF);
- Concessions of railway stations in the cities of Kyiv, Kharkiv, Dnipro, Vinnytsia, Khmelnytskyi, Mykolaiv and Chop with potential options of Kyiv plus Vinnytsia, Lviv and/or Odesa;
- Pilot PPP project in the healthcare sector in Ukraine on the basis of the Lviv Emergency Hospital (LEH). On the 9th of June 2021, a Memorandum of understanding between Lviv City Council, International Finance Corporation and the PPP Agency was signed to establish a legal basis and framework for cooperation in the development of PPP projects in the health sector. The parties have already started collaborating on pilot projects on the basis of the Lviv Emergency Hospital (LEH) which are expected to have significant potential for replication in other territorial communities of Ukraine. Several project options are considered, including the construction of a new multidisciplinary hospital facility, the creation of a network of laboratories using the hub-and-spoke model, the creation of a diagnostic imaging center or a network of diagnostic imaging centers that will serve the needs of the Lviv Emergency Hospital and other hospitals.
“We appreciate the support of our international partners who share their knowledge and experience in the field of PPP to demonstrate the viability of PPP projects and concession projects in Ukraine and to encourage the private sector to participate in such projects. We expect this to significantly increase the amount of private investments in various sectors of Ukraine’s economy over the next 2-3 years”, said Deputy Minister of Economy of Ukraine, Iryna Novikova.
The next steps in the development of cooperation between the International Finance Corporation (IFC), the Ministry of Economy of Ukraine and the PPP Agency include
- The development of an effective contract management system for the first pilot concessions of ports “Olvia” and “Kherson” to address any technical, legal, regulatory, environmental and social management issues that may arise during the implementation of projects. On the 16th of July 2021, the PPP Agency and the International Finance Corporation have signed a cooperation agreement, according to which the IFC will support the PPP Agency in providing consultations to the Ministry of Infrastructure of Ukraine and SE “The Ukrainian Sea Ports Authority” regarding the monitoring and implementation of concession agreements.
- The implementation of the project “The Climate Resilience & Environmental Sustainability Technical Advisory (CREST): improving infrastructure sustainability by implementing the use of the Aligned Indicators for Sustainability in Infrastructure (AISI) in Ukraine”, which is a part of technical assistance provided by the Public-Private Infrastructure Advisory Facility (PPIAF). The project is aimed at improving the quality of current areas of cooperation by introducing a sustainability component with an emphasis on resilience to climate change, as well as other environmental, social and management issues.