Ukraine's PPP Reform: Legal Highlights and Potential Strategic Opportunities for Investors

On 19 June 2025, the Ukrainian Parliament adopted a landmark Law on Public-Private Partnership ("PPP Law"), set to be signed by the President and published imminently. This long-awaited reform aims to modernise Ukraine's legal framework for PPPs, including concessions, aligning it with international and EU standards.

To date, just prior to the Russian invasion of Ukraine, only two major concession projects have been launched in the country: the Olvia and Kherson seaports. Our lawyers advised investors on both projects, including the successful bidder for one of them.

With the adoption of the PPP Law and the government's focus on post-war infrastructure reconstruction and development, the Ukrainian PPP and concession market is poised for further growth, and additional projects are expected to follow.

KEY TAKEAWAYS

The PPP Law is an extensive and foundational legal act that consolidates and updates the rules for PPPs and concessions in particular, providing clarity on definitions, types of projects, and applicable procedures. The law also introduces amendments to dozens of other legislative acts and spans a wide range of sectors, including infrastructure, utilities, housing, social services, and, most relevant to the current situation in Ukraine, security and defence.

Below are the key takeaways for investors considering entry or expansion in Ukraine's PPP market at some stage:

1. Broad scope and flexibility, including hybrid structures. The PPP Law governs classic PPP models and permits hybrid structures combining state funding, donor contributions and private capital. It also permits the use of mixed contracts that integrate elements of various agreements to suit the needs of complex projects.
2. Sector-specific regulation and tailored provisions. The PPP Law contains dedicated sections that specifically regulate PPPs in key sectors such as housing construction and automobile roads, establishing detailed procedures, requirements, and rights for each. For example, it sets out specific rules for the transfer and use of land, ownership of newly built assets, and the structuring of rights and obligations for both public and private partners in housing and road infrastructure projects, ensuring that sectoral nuances and practical needs are directly addressed within the legal framework.
3. Direct agreements with lenders and step-in rights. Direct agreements of public and private partners with lenders are expressly recognised, including step-in rights for creditors and compensation mechanisms in case of early termination. This enhances bankability and aligns with international standards.
4. Role of the public partner and use of advisors. The public partner is responsible for project initiation, preparation and structuring, securing land and permits, and ensuring transparent, competitive selection of private partners. The law anticipates a significant role for international financial institutions ("IFIs") and independent advisors to support public authorities, especially given the limited local experience with complex PPPs.
5. Simplified regime for recovery and reconstruction projects. During martial law and for seven years after its end, a simplified regime applies to PPP projects related to infrastructure and economic recovery. This includes streamlined procedures, reduced administrative barriers, and additional investor protections to accelerate post-war reconstruction.
6. Special provisions for smaller projects. Projects below a certain threshold (EUR 5,538,000) benefit from simplified preparation and approval procedures, making it easier to launch smaller-scale PPPs.
7. Transparent and competitive selection procedures. Private partners and concessionaires are selected through open tenders, restricted tenders, or competitive dialogue. All essential information, including the qualification criteria, evaluation methodology, and results, must be published and cannot be classified as confidential, ensuring a level playing field and minimizing corruption risks. The law sets clear deadlines for each stage of the process, from project preparation (concept note, feasibility study) to tendering and contract award, providing predictability for investors.
8. Protection of project assets and land. Land plots and assets required for PPP projects are protected from division, privatization, or transfer to third parties until they are officially transferred to the private partner or concessionaire, safeguarding project integrity.
9. Contractual stability and non-discriminatory treatment. The PPP Law guarantees contractual stability by applying the legislation in force at the time of contract signing throughout the contract's duration, except for changes that do not change or improve the investor's position. It also provides for non-discriminatory treatment and equal rights for all participants.
10. Dispute resolution and governing law. The law provides for robust dispute resolution mechanisms, including the right to challenge tender results, contract changes, and other key decisions within defined timeframes. International arbitration is recognised, and the law includes clear provisions on waivers of sovereign immunity where appropriate. The PPP Law provides that PPP and concession contracts are governed by Ukrainian law, with more flexibility allowed for supporting agreements, including direct agreements with lenders, which may be governed by foreign law.

WHAT'S NEXT?

The new PPP Law will take effect three months after publication, with certain transitional provisions commencing earlier (notably for existing projects) or later (such as those related to the electronic trade system, expected to be launched in the beginning of 2027). Implementing regulations are expected to follow.

While the new legislative framework is robust and ambitious, it is important to recognise that its practical effectiveness remains to be seen. The law is still very new, and much will depend on how public authorities implement its provisions, the extent of support from IFIs, and the ability of all stakeholders to navigate a landscape where practical experience with PPPs and concessions is still limited. The true test will be in the execution, as Ukraine's public sector and its partners move from legal reform to real-world projects (see the list of previous and some perspective projects on the Ukraine’s PPP Agency’s web-site).

While Ukraine’s commitment to aligning with international best practices is a positive sign, investors should be prepared for a steep learning curve, lengthy preparatory phases, and inevitable delays as the market stabilises and regulatory frameworks evolve. Progress may be uneven, but the willingness to engage and reform is evident.

CONCLUSION

Ukraine’s new PPP Law represents a meaningful step toward improving the country's investment climate and infrastructure development. Its full impact will depend on how effectively it is implemented and supported. As Ukraine gradually begins its reconstruction journey, opportunities for private sector involvement are expected to emerge and grow over time, though likely accompanied by challenges typical of both a maturing economy and a post-conflict environment.

Mayer Brown's cross-offices team, experienced in project finance, PPP, concessions, construction, and the Ukrainian market, stands ready to advise and support clients in navigating this new landscape and capitalising on the opportunities ahead. Mayer Brown is well positioned to guide investors through every stage of PPP and concession projects in Ukraine. Our multidisciplinary team, including Ukraine-qualified and Ukrainian speaking lawyers, with experience in PPP projects in Ukraine, combines global expertise with local insight and longstanding relationship with leadings local law firms, ensuring our clients are well-placed to succeed in this promising market.