Hybrid Financing: Blending State, Private, and Donor Capital
The law introduces a fundamentally new financing model, allowing PPP projects to draw funding from a combination of public budgets, international donor grants, and private investment. This shift significantly reduces the fiscal burden on the state and accelerates implementation timelines. According to Ukraine’s Ministry of Economy, the reform could unlock up to USD 1 billion in infrastructure investment across priority sectors such as ports, healthcare, and municipal services in the coming years.
Broader Sectoral Reach
Unlike its predecessor, the new PPP Law explicitly allows projects in previously excluded areas, including defence, cybersecurity, IT infrastructure, postal services, penitentiary facilities, and even cultural heritage. It also empowers state-owned and municipal enterprises such as Ukrzaliznytsia (Ukrainian railways) or Ukrenergo (energy) to initiate PPPs, broadening the range of public entities that can attract private investment.
Fast-Track Local Projects and Post-War Recovery Regime
To enable local development, the law simplifies procedures for smaller PPPs valued under approximately EUR 5.38 million. These projects no longer require full feasibility studies, only brief concept notes, and can be processed under significantly shortened timelines using electronic auctions to ensure transparency and competition.
Recognising the urgency of post-war reconstruction, the law introduces a special expedited regime for recovery-related PPPs. For seven years following the end of martial law, selected infrastructure and economic restoration projects can bypass standard procedures under government-defined fast-track rules prioritising speed without compromising legal safeguards.
Digitalization and Transparency
In a major step toward curbing corruption and aligning with EU standards, the law mandates full digitalisation of PPP processes. All stages, from project announcements to contract awards, will be conducted through Ukraine’s Prozorro e-procurement system. Competitive selection methods, including open bidding and competitive dialogue, will be applied via electronic platforms to ensure accountability and public oversight.
Stronger Legal Protections for Investors
The law codifies enhanced protections for private partners and lenders, including contract stability clauses, compensation mechanisms for adverse legal changes, and the explicit right to use international arbitration. These provisions are expected to boost investor confidence by ensuring predictability and alignment with international norms.
Key Departure: Elimination of Private Partner Initiative
One of the most debated changes is the elimination of the right for private companies to initiate PPPs. Under the previous law, businesses could submit project proposals that triggered formal consideration. The new regime places exclusive responsibility for project initiation on public partners though private stakeholders may still suggest ideas informally.
This change increases the importance of early strategic engagement with government entities. Private actors will need to align their investment interests with the priorities of public bodies to ensure that projects are officially launched and supported.
Sectoral Impact: From Transport to Defence
Transport and Infrastructure. The new law paves the way for private participation in airports, ports, and railways, including areas previously barred by legal restrictions. For instance, airport runways and related aerodrome facilities can now be leased or concessioned to private operators—an important breakthrough for aviation PPPs. Reconstruction of war-damaged transport infrastructure will benefit from special fast-track procedures.
Energy. The law enables PPPs in electricity generation, distribution, and storage. State energy companies can now initiate projects in renewables, grid restoration, and energy efficiency, supported by blended public-private-donor financing and backed by long-term contracts with investor protections.
Healthcare. Private investors can now build and operate hospitals and medical facilities, with ownership or operational rights and streamlined approval processes. The law also allows lenders to secure mortgages on under-construction healthcare facilities, making it easier to finance and deliver modern medical services.
Education. For the first time, education is formally included as a PPP-eligible sector. From kindergartens to university dormitories, private partners can now help bridge the infrastructure gap with clear legal backing and simplified procedures for small-scale, local projects.
Utilities and Waste Management. The law removes outdated registration requirements and simplifies procurement for municipal projects such as water supply, sewage, and waste treatment. This is expected to trigger a wave of investments, particularly in liberated or war-affected communities.
Defence and New Domains. Perhaps most notably, the law opens the defence and military-industrial sectors to PPPs. Projects can range from logistics facilities to weapons development, subject to additional safeguards. Other new areas include postal logistics, penitentiary infrastructure, digital networks, and R&D facilities.
Implementation Timeline and Next Steps
The law is set to enter into force three months after publication (expected in autumn 2025), with certain provisions such as e-procurement procedures phased in over 12 to 36 months. The Cabinet of Ministers must adopt a host of implementing regulations within a year. A PPP module integrated into the Prozorro platform is due by 2027. For existing projects launched under the old law, transitional rules apply: some steps can proceed under previous rules, but contracts must ultimately comply with the new legal framework.
Summary
Ukraine’s new PPP Law marks a critical step toward aligning the country’s infrastructure development model with international best practices. By simplifying procedures, expanding eligible sectors, and reinforcing investor protections, it sends a strong signal to domestic and foreign investors alike.
While the elimination of private initiative may constrain bottom-up project development, the law’s broader reach and enhanced clarity offer unprecedented opportunities, particularly in the context of post-war recovery. For developers, financiers, and public agencies, the message is clear: Ukraine is open for business and looking for partners to help rebuild its future.