MTBS News

MTBS Ukraine supports Government of Ukraine with developing the country’s first PPP based on international best practice

The Ukraine’s Ministry of Infrastructure, the Ukrainian Sea Ports Authority and a consortium comprising of Risoil S.A. and Georgian Industrial Group successfully signed the PPP agreement on the 26th of June. IFC, in cooperation with the EBRD, have supported the Ministry with a landmark Public-Private Partnership (PPP) agreement to develop the Kherson Sea Commercial Port under a 30-year concession model.

MTBS Ukraine is proud to have been involved in this project, which is a key component of the government’s efforts to mobilise much-needed private investment and expertise in the country’s port sector. The concession will help transform Kherson port into a hub for cargo hauling operations on the Dnipro river, the key water artery in Ukraine, thus improving Ukraine’s export capacity. Additionally, as part of the concession it is agreed to invest 300m hryvnias (over USD 11m) in the development of port and city infrastructure the region in the next three years.

The project also showcases opportunities now opened up by Ukraine’s recently adopted Concession Law. Kherson’s success story therefore poses a bright precedent for Olvia Port, Ukraine’s other port currently posed for transaction, of which the process is also already in an advanced stage.

MTBS Ukraine, as a member of the consortium hired by the EBRD and IFC, was tasked with the transaction of the two ports in Kherson and Olvia, helping the government competitively tender the first PPP in Ukraine designed in accordance with best international practice. Both port’s financial-, technical-, environmental-, social- and legal viability were thoroughly assessed for viability prior to forming the cornerstone of the tailor-made PPP-structure. This was subsequently paired with an optimised transaction strategy, ultimately resulting in the successful contracting of the winning consortium.