Public-Private Partnerships/
Concessions


The EBRD region continues to experience an increased demand for infrastructure, particularly acute in the context of scarce financial resources and competition for funds and expertise. Attracting private sector resources such as funding, efficient management and know-how facilitates overcoming limitations of the public budget for infrastructure building, maintenance and quality services provision. Public-private partnership (PPP) structures have become one of the most common instruments for development of infrastructure using the private sector resources and expertise.

Historically, concessions with their vesting of the entire operation and investment responsibility with the private sector have played the central role in the development of infrastructure with the private sector support. Recent years have seen the emergence of a wide range of PPP projects employing varying degrees of risk taken by the private and public sectors and therefore, a need for the legal frameworks to reflect on a wider range of PPP structures, with concessions still remaining one of the key ones.

The EBRD experience shows that effective implementation of PPP structures for infrastructure developments, particularly in developing countries, is impossible without efficient and transparent policy, legal/regulatory and institutional frameworks encouraging private sector participation, including foreign capital, on sustainable terms and with appropriate allocation of risks between the public and private sectors.

For nearly 20 years, the EBRD has been assisting the governments committed to bringing their PPP/concessions regimes in line with better standards and promoting sound practices in the PPP/concessions sector. This has been done primarily through the EBRD’s Legal Transition Programme (“LTP”), of which the PPP/concessions is long-standing core focus area. The EBRD is uniquely positioned to share its experience as a direct investor and financier and as an international organisation promoting better standards at the macro level (policy, regulations and institutions).

The LTP’s efforts in the PPP/concessions sector over 2001-2010 have been assessed by the EBRD’s Evaluation Department in its Special Study “Legal Transition Programme Review” dated June 2012 (the “LTP Study”) as “successful”.

The LTP conducts the following four types of activities in the PPP/concessions sector:

I. Assessments of PPP/concessions frameworks and practices

Through the LTP, the EBRD regularly assesses laws and practices in the PPP/concessions sector in its countries of operations and benchmarks those against identified international standards. Assessment results provide first-hand information to what extent a country’s policy, legal/regulatory and institutional frameworks reflect international standards and best practices and how are these frameworks operate, mark the progress achieved and help to evaluate investment risk.

An assessment questionnaire developed by the EBRD combined with interviews of selected stakeholders and verification of the preliminary results by local experts serves as the primary analytical tool in conducting the assessments in the PPP/concessions sector.

II. Technical assistance / legal reform projects

Acting upon request of the respective governments, the LTP provides assistance to the EBRD countries of operations in bringing their PPP/Concessions regimes in line with international standards and best practices.

The EBRD’s assistance typically focuses on:

  • supporting national PPP policy formulation and strategic advice on sector development to the ministry in charge or other counterparts;
  • assisting the governments with aligning their legal and regulatory frameworks with international standards and best practices, including support with legislative drafting and providing for necessary implementation arrangements;
  • helping the governments to ensure necessary institutional infrastructure is in place, with the deliniation of policy formulation, regulatory and operational functions;
  • providing support with respect to capacity building, training and awareness activities.

The scope of each technical assistance / legal reform project is carefully developed in cooperation with the respective government to match the country’s specific needs with tailored expertise. Assessment results often serve as an indication of gaps and a starting point for identification of areas of potential assistance.

Examples of some of the LTP’s recent technical assistance projects in the PPP/concessions sector include:

III. Standard-setting

The EBRD contributes to identification and promotion of sound practices in the PPP/concessions, including by way of participating in setting, reviewing and updating international standards in the sector.

Examples of the some of the LTP’s recent standard-setting activities in the PPP/concessions sector include:

  • Cooperation with UNCITRAL with respect to potential future work in the PPPs sector, including participation in the International Colloquium on Public-Private Partnerships.
  • Cooperation with UN ECE with respect to finalisation of two training modules of the PPP Toolkit, “PPP Frameworks” and “How to Negotiate a Concessions Agreement”.
  • Providing assistance to the Inter-Parliamentary Assembly of the CIS Member States with the development of the Model Law on Public-Private Partnerships for the CIS Member States and related legislative support documents.

IV. Outreach

The EBRD promotes sound practices and shares experiences in the PPP/Concessions sector through various outreach activities, including publications in the EBRD’s legal journal, Law in transition, and other publications, dissemination of the LTP’s work in the sector at the Bank’s website and through speaking at conferences.

The EBRD also collaborates and coordinates closely with other international organisations and international financial institutions, including UNCITRAL, UN ECE, World Bank, Asian Development Bank and African Development Bank, as well as with bilateral assistance providers with respect to various activities in the sector.

Examples of the some of the EBRD’s recent outreach activities in the PPP/concessions sector include:

  • Cooperation with UN ECE with respect to finalisation of two training modules of the PPP Toolkit, “PPP Frameworks” and “How to Negotiate a Concessions Agreement”.
  • Cooperation with UNCITRAL with respect to potential future work in the PPPs sector, including participation in the International Colloquium on Public-Private Partnerships.
  • Cooperation with UNCITRAL, UN ECE, World Bank, Asian Development Bank regarding development of the Model Law on Public-Private Partnerships for the CIS Member States.
  • Participation in the UN ECE Roster of Experts and Team of Specialists on Public-Private Partnerships.
  • Participation in the Public Private Partnership (PPP) Alliance, an initiative of the United Nations Economic Commission for Europe, established to promote private sector and alternative finance by bringing together representatives from the private sector, international financial institutions, the donor community and the public authorities of the countries of operations.

Further reading:

If you have any comments or questions, please contact the EBRD's PPP/concession specialist, Mr. Alexei Zverev, on +7 495 7871111 or at zvereva@ebrd.com