UKRAINE Trends and Developments Contributed by: Timur Bondaryev, Maryna Sharapa, Andrii Pidhainyi and Olena Yurets, Arzinger
Legislative Changes PPP-based co-operation between the State and the private sector Despite the ongoing hostilities in Ukraine, the reconstruction process is gaining momentum. Given the enormous extent of damage to vari - ous infrastructure facilities, the government, rel - evant expert organisations and foreign donors continue to work actively to find ways of attract - ing investment to Ukraine. Public-private partnerships (PPPs) are regarded as among these instruments. Therefore, discus - sions have now intensified around amendments to PPP legislation (Draft Law No 7508), which were adopted in the first reading back in October 2022. Key changes include: • expanded scope of application – new areas, including the restoration and construction of new housing; • introduction of a conditional classification of PPP projects – “regular”, “rehabilitation” and “small” projects (worth up to EUR5.382 mil - lion); • expanded sources and mechanisms of finan - cial support – attracting grants from donors (foreign States, organisations, municipalities, IFIs, etc) to co-finance capital expenditures; • transition to the EU model of selecting a pri - vate partner by analogy with public procure - ment procedures through restricted bidding, competitive dialogue and open bidding; and • digitalisation of PPPs – gradual transition to online procedures, introduction of a standard form of a European single procurement docu - ment (ESPD), etc. In addition, the Law “On Amendments to the Budget Code of Ukraine” came into force at the end of August 2022, and the government adopt - ed several additional acts in 2023, providing for
the introduction of long-term obligations under a PPP agreement and State support for the private partner at the expense of the State budget. Introduction of State support mechanisms for private investment The amendments to the law adopted in August 2023 have considerably expanded the list of industries where projects can be implemented with the use of the State support mechanism, as well as the types of such support. The minimum investment amount (changed from EUR20 million to EUR12 million), as well as the requirements for the investor and the project, have also been reduced. The law provides for State support in the form of tax, customs and other benefits, as well as for various forms of compensation, up to 30% of the contributed investment amount. The process of developing and adopting a set of amendments to the by-laws is currently being finalised, intended to implement the provisions of the law, reduce the timeframe and simplify procedures. All necessary acts were expected to be adopted by March 2024. This will allow potential investors to start preparing and sub - mitting applications, and to conclude the first special investment agreements with the govern - ment of Ukraine as a party thereto. The updated status of the land reform At the first stage of the land reform, in July 2021, it was permissible to sell agricultural land plots. The second stage of the land reform success - fully came into force on 1 January 2024, and means that: • the purchase and sale, or other types of alienation, of agricultural land plots in favour of legal entities is allowed (this was previously prohibited); and
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