In 2024, the PPP Agency is involved in reforming the public investment management system, particularly in introducing strategic planning of public investments (including PPPs, concessions) in close connection with budget planning. One of the strategic directions of the PPP Agency’s activities is to “ensure clear and consistent strategic planning of public investments and management of PPP project selection”, which includes the strategic goal of ensuring the identification, prioritization and selection of PPP projects under common approaches to the selection and screening of public investment projects and with the use of best international practices.
In 2024, on behalf of the Ministry of Economy, the PPP Agency reviewed the concepts of public investment projects (submitted by the main managers of budget funds) that had already passed the preliminary screening and prioritization (in line with the Roadmap for Reforming the Public Investment Management System approved by the Cabinet of Ministers of Ukraine in December 2023). The PPP Agency completed the initial identification of 626 projects that do not have identified funding sources and are not included in the List of Priority Public Investment Projects to the draft State Budget of Ukraine for 2025 and can be financed from other sources, including, in particular, PPPs.
In the process of initially identifying 626 public investment projects, the PPP Agency conducted a qualitative preliminary assessment of their potential and suitability (compliance with the criteria) for implementation as PPPs in the priority sectors identified with due regard to sector assessments and recommendations of the World Bank Group’s Report “Private Sector Opportunities for a Green and Resilient Reconstruction in Ukraine”[1]:
- Social infrastructure (healthcare, education, affordable housing)
- Municipal services (waste management, water supply and sanitation)
- Transport infrastructure (roads, sea and inland waterways, airports);
- Energy (“green generation”, heat production).
The criteria for the preliminary assessment of public investment projects for the possibility of attracting private financing and implementing these projects as PPPs were the following:
- public investment projects have passed the preliminary screening and prioritization[2] and demonstrate strategic feasibility, socio-economic and financial feasibility, and technical feasibility;
- after the research, public investment projects have private investors interested in the possibility of implementing PPPs (according to the relevant indicator of the criterion of availability of financing sources defined in the Criteria for prioritizing public investment project concepts[3])
- public investment projects are not yet in the implementation stage.
For the purpose of additional preliminary qualitative assessment, all 52 public investment projects that have interested potential private investors and are not at the implementation stage were checked for
- potential and suitability (compliance with the criteria) for implementation as PPPs, i.e. potential compliance of the content and scope of public investment projects and possible options for the provision of services by the contractor (design, construction, financing, operation, maintenance) on PPP basis
- potential for replication/multiplication in different territorial communities of the country.
Based on the results of a qualitative preliminary assessment of the potential and suitability (compliance with the criteria) for implementation as PPPs, a detailed report (recommendations) on the identification of 52 prioritized public investment projects was prepared. This report includes recommendations and examples of possible project structuring in various priority sectors, including
- possible forms of participation of both public and private parties, considering the choice of a PPP mechanism as a basic alternative for project implementation and a way to meet public needs;
- analysis of potential sources of revenues and return on investment mechanisms for the private partner;
- possible structures of the payment mechanism from the public sector perspective, including conditions (triggers) for budget payments based on various types of events, such as infrastructure availability, performance indicators;
- preliminary legal feasibility assessment and specific recommendations on possible measures to overcome legal obstacles.
[1] World Bank Group’s Report “Private Sector Opportunities for a Green and Resilient Reconstruction in Ukraine”
World Bank Group’s Report “Private Sector Opportunities for a Green and Resilient Reconstruction in Ukraine. Sector Assessments”
[2] in pursuance of the Roadmap for Reforming the Public Investment Management System, approved by the Cabinet of Ministers of Ukraine in December 2023
[3] Annex 2 to the Procedure for the Preparation, Submission, Evaluation and Determination of Criteria for Prioritizing Concepts of Public Investment Projects for 2025, approved by the Resolution of the Cabinet of Ministers of Ukraine No. 903 of August 9, 2024)