PPIAF presented an Annual Report on its activities, including in Ukraine

Published on: 27.11.2023
Category: PPP News

Public-Private Infrastructure Advisory Facility (PPIAF) is the only global facility dedicated to strengthening the policy, regulatory, and institutional underpinnings of private sector investment in infrastructure in emerging markets and developing countries, as well as enabling finance for subnational entities. Turning hundreds of thousands in grant financing into hundreds of millions in infrastructure investment— this is the role of PPIAF.

Ukraine’s critical infrastructure has long faced immense challenges, which have only worsened since Russia’s invasion of Ukraine. Before February 2022, Ukraine pursued an ambitious reform agenda focused on Private Sector Participation in infrastructure. In 2018-2019 PPIAF provided early support to help establish Ukraine’s PPP Agency and develop a pipeline of potential projects.

In 2020 the first concession agreements were concluded for the concession projects of the Olvia and Kherson port, and PPIAF assisted the Ministry of Infrastructure of Ukraine and the PPP Agency in increasing the institutional capacity of concessionaires and designing a monitoring system to oversee the concessions during the first critical years of operation. For this purpose, the PPP Agency, together with the International Finance Corporation (IFC), as part of the PPIAF technical assistance, engaged advisers to assist the Ministry of Infrastructure and the State Enterprise “Ukrainian Sea Ports Authority” in the transition period and the process of managing concession contracts.

While Russia’s invasion of Ukraine has halted port activities, Ukraine has worked diligently with concessionaires and development partners to sustain these partnerships for the future. 

Qualitatively structured concession agreements laid out a framework for monitoring financial, operational, and property matters to facilitate project implementation and identify issues early on. During these first critical years of implementation of the concession agreements, regular meetings were held between the concessionaires, grantors, and stakeholders to review performance, address challenges, and ensure smooth operations. PPIAF’s support enabled effective oversight during this startup phase, allowing productive long-term partnerships at these strategic ports. These efforts also supported IFC’s work addressing technical, legal, communication, and regulatory issues.

The exceptional value of this approach in supporting concession agreements at the stage of their launch was demonstrated during the Russian invasion of Ukraine. With the Russian military targeting strategic infrastructure such as ports, the focus of technical assistance shifted to sustaining the concession relationships in times of war crisis. PPIAF provided timely guidance on invoking Force Majeure clauses, recalculating concession payments, and extending contract timelines.

Ongoing engagement with concessionaires has been critical, signaling commitment to restoring operations in ports when feasible. Though physical assets require rehabilitation and commercial terms may need renegotiating, the concession relationships remain intact. In particular, concessionaires take measures to pay concession payments:

  • in accordance with the concession agreement for the Olvia port concession project (with Qterminals W.L.L., Qterminals Olvia LLC), concession payments in the amount of UAH 19,223.2 thousand were paid by the concessionaire in 2023;
  • in accordance with the concession agreement for the Kherson port concession project (with Rysoil-Kherson LLC, Kherson Port LLC), concession payments in the amount of UAH 2,148,000 were paid by the concessionaire in 2023.

“Ukraine has demonstrated remarkable dedication to its reform agenda. Its efforts to preserve partnerships with private port operators, with support from PPIAF and the World Bank, will be essential for recovery and building back better infrastructure. Sustaining engagement with concessionaires also sends a powerful signal—that Ukraine remains open for business, and private investment will continue driving modernization and growth when peace returns” – stated in the PPIAF Annual Report 2023.

Learn more at ppiaf.org or on LinkedIn at linkedin.com/company/ppiaf.