• Yevheniy Deyneko

    Managing Partner,

    Education: INSEAD, (Broadening Business Perspectives Programme, 2015); Kyiv National Economics University (Masters in Finance, 2009); University of Connecticut School of Law, (LL.M., 2001); Lviv National University Law School (Specialist’s Degree in Law, 2000). Mr Deyneko is qualified to practice in Ukraine and admitted to practice in New York State, USA

  • Andriy Olenyuk


    Education: Georgetown University Law Center (LL.M., 2010); Lviv National University Law School, (Master’s Degree, 2008). Mr Olenyuk is admitted to practice in Ukraine


Address: 4 Rylskyi Lane, Sofyiska Square, 6th Floor, Kyiv, 01001, Ukraine

Tel.: +380 44 337 0016

Fax.: +380 44 337 0018

E-mail: info@everlegal.ua

Web-site: www.everlegal.ua

EVERLEGAL is an independent and sector-focused Ukrainian law firm with particular expertise in Energy & Natural Resources. Our mission is to be a legal business partner for our clients and to facilitate your progress and get your jobs done.

The EVERLEGAL team is a synergetic combination of professionals from international law firms and local legal experts. We advise our clients on transactional matters with a focus on corporate finance, dispute resolution (in courts and via ADRs) and legal aspects of business operational matters. We feel equally comfortable when advising on complex cross-border deals or representing your interests in domestic courts or foreign arbitration fora and jurisdictional bodies against tough counterparties. Our offering covers Corporate and M&A, Dispute Resolution (Courts and ADRs), Antitrust/Competition, Banking & Finance and Commercial Matters. We are also experienced in Drafting Legislation.

EVERLEGAL’s clients encompass industry leaders with global brands, mid-size and growing businesses as well as innovative start-ups. Our lawyers have experience and expertise in a range of sectors such as Energy & Natural Resources (with special focus on RES), Agriculture, IT and Telecoms, Healthcare, Infrastructure, Financial Institutions and Consumer Goods.

EVERLEGAL’s motto is “Ever More Success”. We measure that success by how successful our clients are in achieving their business goals. We get your jobs done.

PPPs in Ukraine: Untapped Fountainhead

Public-private partnerships (“PPP” or “PPPs”) around the world and particularly in Ukraine, are a type of contract between government (or municipalities acting on behalf of local communities) and private partners (usually legal entities) relating to projects of public interest. A typical PPP contract involves cooperation where a private partner undertakes to implement a project, provide services, construct new or rebuild existing facilities in a sector where public authorities have a prime responsibility to act.

Such cooperation traditionally contemplates the operation, improvement and development of certain facilities. PPP is much more than just a long-term lease, as it may sometimes be erroneously perceived. Moreover, the transfer of a facility to the private partner under a PPP contract does not imply an ultimate change of title to such facility. The public partner will still have the facility and all the benefits associated with it back after the PPP contract ends. At the same time, the terms of PPP arrangements can be structured in a way allowing the investor to return its investments and earn reasonable profits. The majority of PPPs in Ukraine are implemented in the form of concessions, while joint activity agreements and so-called “public-private partnership” contracts are less common.

Benefits of PPPs

PPPs became popular worldwide because of the advantages both for public and private partners. These include, among others:

— attractiveness for foreign companies or individual entrepreneurs to invest in the development of the public sector;

— competitiveness, transparency and choice of the best private partners;

— reasonable risk allocation (i.e., certain risk can be attributed to a partner who can mitigate it in a more efficient manner);

— cost-effectiveness, preferences and reduction of tax burden for business;

— higher quality and agility of project development, since the private partner is often an experienced player in a given sector;

— the public partner’s ability to monitor and control the development and implementation of the project;

— better planning and well thought-out implementation;

— interaction between public and private sectors; and

— support for new business ideas, innovative approach and maximum benefit from the experience possessed by private partners.

Regulatory Framework for PPPs in Ukraine

The key laws and regulations gover­ning PPPs in Ukraine are:

— Law of Ukraine No.2404-VI On State and Private Partnership;

— Law of Ukraine No.997-XIV On Concessions (the Concessions Law);

— Law of Ukraine No.3687-VI On Specific Issues of Lease or Concession of State Owned Fuel and Energy Industry Facilities;

— Law of Ukraine No.2624-VI On Specific Issues of Transfers into Lease or Concession of Facilities in the Field of Heat Supply, Water Supply and Water Disposal that are Owned by Municipalities;

— Law of Ukraine No. 185-V On Management of State Owned Property Objects; and

— Law of Ukraine No.1286-XIV On Concessions for the Construction and Operation of Automobile Roads.

There is also a considerable amount of secondary legislation supplementing the primary PPP rules and detailing PPP-related procedures.

In addition, Draft Law No.8125 On Concessions was adopted by the Ukrainian Parliament in 2018 in the first reading and is currently being prepared for its second reading. The Draft Concessions Law, which was developed in collaboration with experts from the European Bank for Reconstruction and Development, introduces amendments to several legislative acts, including the Concessions Law. It provides for, inter alia, a simplified procedure of land plot allocation, possibility to change an ineffective private partner and establishes a transparent procedure of competition for determining the most appropriate private partner for the project. There are also several tax and budget law related initiatives to enable implementation of PPPs in infrastructure projects, including to accommodate tax and budget rules into new rules to be introduced by the Draft Concessions Law.

PPPs Currently Implemented

According to the Ministry of Economic Development and Trade of Ukraine, 192 PPP contracts had been concluded by 1 July 2018. However, only 66 projects are in operation (41 concession agreements, 24 joint activity agreements, 1 public-private partnership contract), while 126 are not in operation. The majority of PPP contracts (124) were concluded in  Poltava Region, but only 5 of them are active. As of July 2018, Mykolayiv Region was the leader in terms of numbers, having implemented 15 PPPs projects.

According to the Ministry of Economic Development and Trade of Ukraine, the majority (47%) of active projects are implemented in the sector of water disposal and water treatment. Despite the fact that investors are generally interested in PPP arrangements, PPPs in such sectors as healthcare, mineral survey, mining are not common at all. However, the Ukrainian government believes that the new model of Ukrainian healthcare will open the possibility to raise the interest of investors in concluding PPPs in this sector. Furthermore, the strategy of the Ministry of Economic Development and Trade of Ukraine has adopted a pro-PPP direction, which is confirmed by the Ministry’s plans to establish the PPP Support Agency.

In recent years Ukraine has implemented many new regulations in the renewable energy sector and is about to change its renewable energy support scheme by introducing auctions going forward. Starting from 2020 the auction procedure would be the only way for investors to act on the renewable energy arena in Ukraine. For instance, under Law of Ukraine No.2019-VIII On the Electricity Market the investor winning an auction will conclude a 20-year term power purchase agreement with the “guaranteed buyer”, a state-owned legal entity, which will be obliged to purchase produced electricity. While such laws by themselves are not PPP-related laws, they will make the sector sustainable and enable the attraction of private partners into associated projects, particularly in the area of energy storage and creation of flexible production capacities for balancing the Ukrainian energy system.

Important Issues with Conclusion of PPPs

Apart from the general positive impact of PPPs, there are several issues which can disregard their aim and expectations of partners. Even though Ukrainian legislation provides for transparent PPPs framework, a limited number of private entities willing to take part in a tender to become a private partner may abolish the expected competitiveness and transparency. Hence, the government should involve and attract as many potential private partners as possible, and so endorse competition in this area.

Furthermore, depending on the PPP sector, a private partner may require the allocation of certain additional risks to a public partner, which apparently requires bearing additional cost by the public side of PPPs. The Ukrainian government has announced its aim to launch PPPs in sectors like education, healthcare and to proceed with concessions in seaports and other infrastructure where there is a need for substantial modernisation. However, the priority sectors for PPPs have still not been defined. Furthermore, the competence of the future PPP Support Agency to be established in 2019 should be clearly set out.

Final Points

There is a strong need to improve PPP laws and regulations, support implementation of existing PPPs and develop new PPP opportunities in Ukraine keeping in mind the successful examples of PPPs in other countries. PPPs can take the burden from the public partner and allow for effective resolution of economically and socially important tasks with the attraction of private capital, particularly in infrastructure, energy, utilities, healthcare and education. Therefore, there is no other option but to continue fostering PPPs in Ukraine as the latter will definitely benefit from each new PPP.