August 2025 – On 30 July 2025, the President of Ukraine signed Law No. 7508, aimed at optimising the mechanism for attracting private investment into post-war infrastructure recovery efforts through public-private partnerships (PPPs). The law, save for a few exceptions, will come into force three months after its official publication.
The reforms enact a new version of the Law "On Public-Private Partnership" and also introduce significant changes to the Law "On Concessions", along with related laws governing urban planning, highways, land relations, railway transport, and other sectors.
Below we summarize the key innovations:
1. Expansion of PPP usage and concessions
Opening up additional entry points for private capital by enabling PPPs and concessions across the following sectors:
- Education;
- Residential construction;
- The defence industry;
- Railway infrastructure (stations, lines, platforms, tunnels, procurement of rolling stock);
- Reclamation systems.
2. Simplification and standardization of PPP preparation procedure
Private investors will no longer be able to initiate PPPs and concessions by way of so-called "unsolicited proposals" and only the public partner will be authorized to initiate these. At the same time the list of eligible public partners is extended by recognizing state and municipal enterprises as valid initiators.
Project preparation procedures for PPPs and concessions have also been simplified. For sub-threshold projects (under EUR 5.538 million) the initiator will only be required to prepare a concept note. A previously required complicated feasibility study will no longer be necessary for such projects, which significantly reduces for project preparation times and costs.
Additionally, during martial law and for seven years thereafter, a fast-track project preparation procedure applies to PPPs and concessions listed for infrastructure and economic recovery purposes. The Cabinet of Ministers will be responsible for preparing the lists of such projects along with the specific fast-track project preparation procedures.
3. Competitive procedures: enhancing transparency through digitalization
Depending on the complexity of the given project and current market situation, the public partner may decide to use either of the following procedures for the selection of its private counterpart:
- Open bidding;
- Restricted bidding;
- Competitive dialogue.
For a transitional period of five years from the law's effective date, it will also be permissible to convert state property leases into PPPs or concession agreements via direct negotiations, bypassing formal competitive procedures.
The law offers detailed procedures for each competitive methodology. To further enhance transparency and reduce corruption risks, by 1 January 2027 all competitive procedures are to be conducted online using an Electronic Trading System aligned with EU standards.
However, these procedures will not retroactively apply to projects already approved for PPPs or concessions before the law took effect. Such projects will be procured under the legal framework that was in place at the time of their initial approval.
Additionally, the law contains strict participation limitations, banning individuals or entities from participating as private partners in PPP tenders if registered in offshore zones, Russia, Belarus, Iran, as well as any entities affiliated therewith above the established control thresholds.
4. Tender result appeals
One year after the new law enters into force, any disputes arising from the competitive selection of private partners will be subject to adjudication by the Antimonopoly Committee of Ukraine. Prior to this, any such disputes must be resolved through Ukraine's ordinary court system. To minimize procedural abuses and to prevent undue delays in tendering, the law dramatically shortens appeal periods – to 30 days, and in exigent circumstances, to 15 days.
5. Project duration and flexibility in PPP agreements
Traditionally, public–private partnerships and concession arrangements have been bound by standardized term periods ranging from five to fifty years. Under the reformed legislation, however, these limitations have been significantly relaxed. For residential projects valued below EUR 5,538,000, the law now permits terms shorter than five years. The maximum 50-year term has also been revoked.
Moreover, each project timeline will be determined and justified on a bespoke basis and specified in a concept note or feasibility study during the project preparation stage based on such factors as investment recovery periods, expected profitability, and the structure of financing.
This enhanced flexibility is particularly advantageous for complex and capital-intensive infrastructure ventures, where returns may take longer to materialize. It is worth noting, however, that sector-specific laws, including those governing highways and rail systems, may continue to impose independent duration restrictions according to the type and nature of the respective PPP initiative.
Additionally, Law No. 7508 provides for the possibility of the suspension of PPP or concession terms under circumstances such as force majeure events or conditional triggers. Such suspensions are permissible for up to five years, during which the effective control over the given PPP object may temporarily shift to the public partner.
6. Legal innovation: Introducing PPP agreements
Property management and joint activity agreements previously recognized as public-private partnerships will be no longer recognized in this way, marking a key departure. Instead, the law introduces a fully articulated legal instrument, namely a PPP contract, which comprehensively defines the parties involved, the subject matter, and other essential contract provisions
The new law introduces the following new material provisions of the PPP agreements:
- Performance indicators and operational requirements, particularly pertinent to road infrastructure, which are instrumental in calculating availability payments and penalties;
- Risk allocation mechanisms, rigorously rooted in a project's concept note or feasibility study;
- Cost adjustment provisions, allowing for adaptive financial structuring as project circumstances evolve;
- Donor grant frameworks providing details on funding streams to support PPPs.
Moreover, the new law permits hybrid contractual models, enabling PPP contracts to include elements spanning construction, service delivery, and procurement agreements – simplifying complex legal structuring and offering enhanced flexibility.
Crucially, the reformed legal structure allows for multiple public entities (such as state bodies, municipal enterprises, or other organisations) to participate jointly in PPP contracts in order to fulfil project obligations such as land allocation and town planning documentation development, building, and providing engineering infrastructure.
The law also stipulates clear procedural timelines: the negotiation and conclusion of a PPP contract must take place within 60 days following the announcement of the winner of a given PPP procurement procedure. Should the chosen bidder fail to conclude the necessary agreement – or attempt to modify non-negotiable terms – they risk forfeiting their bid guarantee (up to 1% of project value), with the process then advancing to the next eligible bidder.
All PPP and concession agreements will now be governed by Ukrainian law only; although complementary supporting agreements – such as direct contracts, financing agreements, or grant agreements – may be governed under foreign law, as needed. The law also allows a public partner to waive sovereign immunity for dispute purposes at the request of the private partner and upon government approval, enhancing the enforceability of PPP contracts.
7. Legal status of PPP objects
Under the newly enacted legislative framework, PPP and concession assets generally remain under public ownership. However, the law introduces a significant exception for residential projects falling below a threshold value. In such cases, ownership may be transferred to the private partner or even the end consumer, providing greater flexibility for housing initiatives within the PPP mechanism.
In support of smoother project implementation, the law also streamlines title registration procedures. Previously, the formal registration of state or municipal ownership was required before any property rights could be recorded for the private partner or concessionaire. The reform eliminates this requirement, allowing the registration of private party rights without prior public-property registration.
Crucially, to facilitate the return of PPP assets, the new law provides an innovative alternative: rather than requiring the physical handover of infrastructure, public partners may accept equity in the project SPV (Special Purpose Vehicle) in lieu of an actual asset transfer. This mechanism enhances operational efficiency and serves to mitigate logistical challenges at the end of contract terms.
8. Land use innovations
The revised PPP law significantly simplifies land use procedures, dramatically shortening preparation times and reducing costs for linear infrastructure, road construction, and residential projects under the given value threshold. One key mechanism allows developers to utilize public land without the need for land allocation and formal lease agreements, i.e. by concluding so-called "agreements on the assignment of employer functions". This instrument enables private partners to design, secure permits, construct, and operate infrastructure on public land, while compensating the public partner via a land tax rather than paying rent.
Where established easements exist – such as for power lines or pipelines – the law permits the private partner to use these on behalf of the public partner.
Perhaps most transformative change is the relaxation of land delineation requirements: neither during project preparation nor at contract signing will land plots need to be precisely surveyed and registered with cadastral numbers. Instead, approximate boundaries and areas depicted graphically will be sufficient, with formal allocation and ownership registration occurring post-contract. This prag matic approach removes a substantial administrative hurdle and accelerates project preparation.
Nevertheless, the obligation to procure land and amend town planning (zoning) documentation remains with the public partner. In cases where land needs to be expropriated, the private partner will be able to finance such activities under the given PPP's contract terms.
9. New forms of PPPs state support
In addition to already existing state and local guarantees, availability payments, procurement by the public partner, infrastructure delivery, and co-financing of PPP objects, the new law provides additional forms of state support to PPPs and concessions:
- The public partner's obligation to compensate any difference between the guaranteed and actual demand for goods/works/services under the given PPP;
- The provision of donor grants for PPP projects directly to state or private partners, avoiding formal approval procedures;
- The public partner's assistance in attracting investments from individuals and legal entities for residential PPPs.
Yet another novel feature is the possibility to increase state support during project implementation or contractual amendments via specific procedures to be determined by the Cabinet of Ministers.
Law No. 7508 thus truly represents comprehensive PPP reform in Ukraine. Such reforms have the potential to significantly improve the investment climate, in particular for infrastructure and the social sector, and to attract substantial private sector and IFI (International Financial Institution) resources toward post-war reconstruction.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
