IFC and EBRD will support the PPP pilot projects in the road sector in Ukraine

Published on: 22.12.2021
Category: PPP News

Today, December 22, an agreement was signed between the State Agency of Motor Roads of Ukraine and the International Finance Corporation (IFC), the European Bank for Reconstruction and Development (EBRD) for the provision of the services needed for the Public-Private Partnership projects in the road sector preparation and implementation, in particular services for the Feasibility Study development.

The first two sections of roads for the future PPP pilot projects of the Road PPP Program have been agreed upon:

•          Yagodyn – Kovel – Lutsk (М–07, М–19),

•          Kharkiv – Dnipro – Zaporizhzhia (М–29, M–04, M–18).

“The Kharkiv-Dnipro-Zaporizhzhia and Yahodyn-Kovel-Lutsk routes are the first PPP projects on these routes envisage roads rehabilitation, maintenance and overhaul. Long-term cooperation is based on the logic of the so-called OPRC road maintenance contracts, which assess the contractor’s performance on specific safety and comfort indicators. This year we have intensified our cooperation with business and now we are talking not only about the road or port concessions but also about various effective models of Public-Private Partnership in the field of infrastructure. It is important for us to involve international partners because this is a direct signal for new financial institutions and road companies to enter the Ukrainian market”, said Oleksandr Kubrakov, Minister of Infrastructure of Ukraine.

The purpose of the Road PPP Program is to engage the private sector in Ukraine’s existing road network through PPP contracts to help improve the quality of the road network and long-term service through private investment. PPP using the availability payment mechanism is considered to be the most appropriate for the purposes of the Program. This mechanism envisages financing by a private investor for the rehabilitation and long-term maintenance of selected sections of roads. After the initial work, the private investor will receive availability payment – an amount agreed in the contract, which depends on the provision of the private investor certain performance indicators: performance standards (KPI) and technical requirements.

In 2021 for the first six PPP road projects in the Road PPP Program in cooperation with the Ministry of Infrastructure and with the support of the International Finance Corporation (IFC), the PPP Agency completed the Concept Notes preparation. The plans for 2022 include the preparation of the first Feasibility Studies for the future pilot projects in the road sector: from the Polish border – Jagotyn – Kovel – Lutsk (M-07, M-19) and Kharkiv – Dnipro – Zaporizhzhia (M-29, M – 04, M – 18).

More details on the Ministry of Infrastructure website – https://mtu.gov.ua/news/33323.html

Image source – https://mtu.gov.ua/news/33323.html