UKRAINE: Building PPP Implementation Capacity

Before Russia’s invasion of Ukraine in February 2022, PPIAF supported IFC in its efforts to operationalize Ukraine’s newly formed PPP Agency and build its institutional capacity. Ukraine, a country with EU accession aspirations, has long sought to build its capacity to develop and implement PPPs to facilitate infrastructure development. PPIAF played an important role in these efforts. The need for stronger PPP capacity took on greater significance following the war, which has significantly damaged Ukraine’s critical infrastructure and severely constrained the government’s capacity to provide services.
While ambitions for developing and implementing PPP projects are high, the country has a limited track record and low implementation capacity. Additional deterrents for PPI include the current lack of a clear legal framework and policy guidelines that govern successful PPP programs, particularly in the face of greater uncertainty.
To mitigate these shortcomings, the support has focused on aiding Ukraine in attracting private investments by creating an overall strategy and business plan to operationalize the nascent PPP Agency and provide recommendations on governance processes and associated regulations. Additionally, the training and capacity-building efforts provided by PPIAF have instructed on best practices and methodologies across the PPP lifecycle to properly screen, prepare, and deliver PPP projects. The training further discussed specific considerations within PPPs, such as climate and gender, the assessment of unsolicited proposals, and the successful contract management of PPPs during the implementation phase.
Throughout PPIAF’s technical assistance, key methodologies to be implemented by the PPP Agency were developed and codified in the newly established PPP operational manual. These focused on topics such as advisory offerings, fees for advisory services, procurement best practices, and the incorporation of gender principles in PPPs. An additional workshop funded by CREST was carried out to train the agency on the Aligned Indicators for Sustainable infrastructure (AISI).
Due to PPIAF’s interventions, the newly developed strategy authorized the PPP Agency, on behalf of the Ministry of Economy, to be the centralized division in charge of the approval of quality PPPs, institutional implementation mechanisms, and the overall monitoring and reporting of the PPP market in Ukraine.
The PPIAF technical assistance also facilitated the successful CP3P certification of the PPP Agency’s members. Ukraine’s first two concessions, the Olvia and Kherson Sea Ports, highlighted the agency’s increased capacity. These concessions provided a learning experience for post-transaction advisory support, where the PPP Agency was trained on contract management and developing monitoring and evaluation systems. Additionally, prior to Russia’s invasion of Ukraine, the PPP Agency signed partnership agreements with several cities and ministries, such as the Ministry of Infrastructure, to aid in developing airports in Lviv, Cernivci, and Rivne.
The progress has stalled due to the war. Future engagements focused on rebuilding will likely include a stock-take of assets to readjust the pipeline in a way that best supports Ukraine’s effort to reestablish services and infrastructure for economic development and prosperity. Additional efforts will focus on the continued reform of the PPP framework to allow for necessary streamlining related to PPP procurement, ultimately accelerating PPI program development and implementation.