PR_MCPublic Investments and Public-Private Partnership as the Main Mechanisms for Restoring the Investment Capacity of Communities
In the current realities, when almost the entire budget of Ukraine is directed to financing the defense sector, and the amount of external public debt exceeds 90% of GDP, the issue of infrastructure restoration and modernization of the public administration system becomes particularly urgent. Today, the «traditional» sources of funding are nearly exhausted; therefore, communities need to seek alternative methods of attracting foreign investments that ensure sustainable development of territorial centers. One such instrument is Public-Private Partnership (PPP).
At the workshop «Possible Sources of Financing Public Investment Projects in Communities and Ways to Strengthen Institutional Capacity under the Reform of Public Investment Management (PIM)», Taras Boychuk, Managing Partner of SPILNO LLC, and Andrii Pidhainyi, Partner at Arzinger Law Firm, shared their insights on the effectiveness of implementing PPPs, municipal bonds, and international aid as key sources of financing community investment projects.
First of all, in order to demonstrate his high level of expertise in the subject matter, Taras Boychuk vividly illustrated the specifics of SPILNO Consulting Company, which, since 2017, has acted as a trusted advisor both for government institutions and private investors in areas such as Public-Private Partnership, state support for investments (InvestNanny), and industrial parks. He presented several potential sources of funding for the reconstruction of critical infrastructure facilities in Ukraine and clearly demonstrated how communities can filter investment cash flows to address the most pressing needs of the local population. He emphasized that communities possess enormous, though still underdeveloped, investment potential, which could foster rapid economic growth of the entire country.
Andrii Pidhainyi provided a more detailed overview of the new edition of the Law of Ukraine «On Public-Private Partnership» (Draft Law No. 7508). The draft law provides for:
- simplification of procedures for reconstruction projects and standardization;
- adaptation of EU acquis;
- improved guarantees for investors and creditors (procedures for replacing a private partner, guarantees of legislative stability, rules on compensation to a private partner in case of contract termination, etc.);
- the possibility of blended and grant financing, when projects are supported by budget funds, donor grants, and private capital simultaneously.
🔵 Summarizing the above, this document transforms the Ukrainian PPP implementation system in line with European standards and opens up new opportunities for attracting foreign capital to Ukraine. A successful example of applying PPP mechanisms for infrastructure restoration is the establishment of the Minimally Invasive Surgery Center in Truskavets, Lviv region. The main goal of the project was to improve the accessibility of surgical services (including for foreign tourists) by pooling the resources of local authorities, private partners, and financial institutions.
The open dialogue was also joined by Mr. Niko Gachechiladze, Head of the PPP Agency, who noted that funds from an international foundation have already been allocated for the implementation of state and municipal projects aimed at enhancing investment and institutional potential.
As we can see, Ukraine is gradually moving toward a systemic model of economic growth, which will undoubtedly accelerate the country’s recovery process, with Public-Private Partnership becoming the key to large-scale infrastructure modernization of communities.
In addition, our partners are launching training programs on public investments and PPP. If you feel the need for this, please register at the provided link.
👉🏻 You can learn more about the workshop on our YouTube channel or by viewing this presentation.