On 7 April 2026, the PPP Agency of Ukraine and the Japan PFI/PPP Association signed a Memorandum of Understanding, marking a new phase of cooperation between Ukraine and Japan in the field of public-private partnership (PPP).
The Japan PFI/PPP Association is a professional organization that has been engaged for over 25 years in the promotion, education, and implementation public-private partnership (PPP) mechanisms, and, in particular, the Private Finance Initiative (PFI) model, in Japan and other countries.
The Association is already actively cooperating with the Ukrainian “Mayors’ Club” and local communities, providing humanitarian aid and advisory support on infrastructure reconstruction and restoration projects, as well as helping to adapt effective Japanese public-private partnership models for the implementation of such projects.
“Cooperation between the PPP Agency and the Japan PFI/PPP Association will contribute to strengthening institutional and technical capacity in the PPP sector in Ukraine and will accelerate the mobilization of private investment into strategically important projects, opening opportunities for large-scale economic development,” said the Director of the PPP Agency, Niko Gachechyladze.
The PPP Agency has already identified priority sectors and compiled a pipeline of initiatives, public investment projects, suitable for implementation as PPPs. The PPP Agency also reaffirmed its openness to cooperation, which includes using Japan’s experience and effective financial instruments.
Mr. Niko Gachechyladze emphasized that PPP projects are being developed at two levels:
- National level, where the priorities are the development of transport and logistics infrastructure, and
- Municipal level, covering sectors such as waste management, water supply and sanitation, affordable housing, healthcare, culture and recreation, as well as “green energy” and thermal energy production projects.
Particular emphasis was placed on strengthening the institutional capacity of municipalities, local self-government authorities, which are currently developing their own pipelines of public investment projects that may be implemented within the PPP framework. It is precisely at the local level that there is a significant need for infrastructure reconstruction and development, while the resource and financial capacities of local communities remain limited. In this context, the implementation of effective PPP models could become a key instrument for recovery.
From the perspective of the Japan PFI/PPP Association, the Memorandum opens opportunities for the dissemination and implementation in Ukraine of the Private Finance Initiative (PFI) model, which has been successfully applied in Japan since 1999. This model involves the use of private financing, efficient management practices, and advanced technologies for the construction/development, maintenance, management, and/or operation of public infrastructure.
The parties agreed to focus on the practical aspects of PPP project preparation and implementation, specifically:
- procedures for the selection of private partners
- PPP project structuring
- risks allocation between public and private partners, etc.
In addition, it is expected that Japanese private and donor capital will be able to be attracted as early as the project preparation stage, which is an important step toward achieving Ukraine’s strategic goal of mobilizing large-scale private sector financing.
At the same time, in Ukraine work is progressing, with the support of international partners – including the IFC and the World Bank – to establish a Viability Gap Fund (VGF) as a financial support mechanism for PPP projects that can be used when user payments or availability payments from the public sector for the operational readiness/availability of infrastructure/services are insufficient to cover the full cost of the project or all costs over the project’s lifecycle, including capital and financial expenses. Such an instrument will ensure a systematic approach to the financing and implementation of PPP projects.
Overall, the parties emphasized that the signing of the Memorandum is not a final objective, but rather a starting point for further cooperation focused on achieving tangible results.
The next important milestone will be the Ukraine Recovery Conference (URC 2026), which will take place in June in Gdańsk, Poland. The event is expected to serve as a platform for presenting developed solutions, discussing specific projects, and defining further steps for cooperation.
Overall, the Memorandum marks the beginning of a new stage of cooperation in the field of public-private partnerships between Ukraine and Japan, aimed not only at knowledge exchange but also at launching concrete projects, attracting investment, and establishing sustainable mechanisms for recovery and development.
