Archive Issue
International Interdisciplinary Scientific Journal "Expert"
Volume 2, Issue 1 (2025)
Language of the original article: English
ABSTRACT. The article analyzes the economic foundations for mobilizing private and blended capital in Ukraine through public–private partnerships (PPP) amid the urgent need to restore and modernize infrastructure under constrained fiscal space. It is shown that PPPs make it possible to combine long-term resources with performance-based remuneration and a rational allocation of risks, whereas traditional public investment mechanisms neither guarantee sufficient funding volumes nor ensure whole-life asset efficiency. The study identifies key barriers: a gap between CAPEX needs and budget capacity; higher WACC driven by war-related, political, regulatory, and currency risks; institutional gaps in project preparation and selection; a protracted pre-feasibility/feasibility/VfM/PSC cycle; a tension between socially acceptable tariffs and project bankability; and limited project capacity at the municipal level. It is substantiated that selecting the payment model (user-paid tariff, availability payments – AP, or hybrid) should be based on the life-cycle cost (LCC) approach, Value for Money (VfM) assessment and the Public Sector Comparator (PSC), as well as analysis of demand elasticity and fiscal space. The article demonstrates the need for a coherent de-risking architecture combining political/war risk insurance and guarantees with VGF and MRG instruments, indexed payments, FX hedging, and the development of long-term hryvnia financing (project and municipal bonds, participation of institutional investors). The paper proposes institutionalization (a central coordinating body, regional hubs, a Project Preparation Facility), standardization of template contracts and KPI / SLA, fiscal rules (limits on direct and contingent liabilities, a registry, regular stress tests), alongside open data, market sounding, and digital contract-management tools (BIM / CMMS / IoT). The importance of ESG requirements and transparent monitoring is emphasized. The conclusion is that a portfolio-based, standardized, and transparent PPP approach reduces the risk premium and WACC, increases competition and fiscal manageability, improves VfM, and accelerates infrastructure recovery and modernization without sacrificing service quality.
Keywords: public-private partnership (PPP), investments, infrastructure, availability payments (AP), minimum revenue guarantee (MRG), viability gap funding (VGF), Value for Money (VfM), Public Sector Comparator (PSC), life-cycle cost (LCC), weighted average cost of capital (WACC), de-risking, fiscal liabilities, long-term hryvnia financing, political and war risk insurance.
2. Yescombe, E. R., & Farquharson, E. (2018). Public-private partnerships for infrastructure: Principles of policy and finance (2nd ed.). Butterworth-Heinemann (Elsevier). Available at: https://librarysearch.royalholloway.ac.uk/permalink/44ROY_INST/fdaefq/alma997463253002671
3. Grimsey, D., & Lewis, M. K. (2004). Public private partnerships: The worldwide revolution in infrastructure provision and project finance. Edward Elgar Publishing. https://doi.org/10.4337/9781845423438
4. Engel, E., Fischer, R. D., & Galetovic, A. (2014). The Economics of Public-Private Partnerships: A Basic Guide. Cambridge: Cambridge University Press. https://doi.org/10.1017/CBO9781139565615
5. Hodge, G., & Greve, C. (2007). Public-Private Partnerships: An International Performance Review. Public Administration Review, 67(3), 545 - 558. https://doi.org/10.1111/j.1540-6210.2007.00736.x
6. OECD. (2012). Recommendation of the Council on principles for public governance of public–private partnerships. OECD Publishing. Available at: https://legalinstruments.oecd.org/en/instruments/oecd-legal-0392
7. World Bank. (2017). Public–private partnerships: Reference guide (Version 3). World Bank. https://doi.org/10.1596/29052
8. European PPP Expertise Centre (EPEC). (2011). The guide to guidance: How to prepare, procure and deliver PPP projects. European Investment Bank (EIB)/EPEC. Available at: https://ppp.worldbank.org/sites/default/files/2024-08/EPEC_Guide%20to%20Guidance_EN.pdf
9. World Bank. (2020). Public–private partnerships fiscal risk assessment model (PFRAM) (Version 2.0). World Bank. Available at: https://ppp.worldbank.org/library/public-private-partnerships-fiscal-risk-assessment-model-pfram-2019-version-2-0
10. Zapatrina, I. (2010). Public–private partnership in Ukraine: The prospects of use to realize infrastructural projects and provide public services. Economy and Forecasting, 4, 62–86. Available at: https://ideas.repec.org/a/eip/journl/y2010i4p62-86.html
11. Zapatrina, I. (2018). Ukraine: The Ukraine Continues Development of PPP Regulation, But Still Needs Improving Institutional Capacity. European Procurement & Public Private Partnership Law Review, 13(1), 83–86. Available at: https://www.jstor.org/stable/26695257
12. Pavlovskyi, S., Slobodianyk, A., & Nikolaev, O. (2023). Theoretical and methodological features of public–private partnership in the implementation of economic activities of territorial communities. International Interdisciplinary Scientific Journal “Expert”, 1(1), 128–142. https://doi.org/10.62034/2815-5300/2023-v1-i1-010 [in Ukrainian].
ABSTRACT. The article analyzes the economic foundations for mobilizing private and blended capital in Ukraine through public–private partnerships (PPP) amid the urgent need to restore and modernize infrastructure under constrained fiscal space. It is shown that PPPs make it possible to combine long-term resources with performance-based remuneration and a rational allocation of risks, whereas traditional public investment mechanisms neither guarantee sufficient funding volumes nor ensure whole-life asset efficiency. The study identifies key barriers: a gap between CAPEX needs and budget capacity; higher WACC driven by war-related, political, regulatory, and currency risks; institutional gaps in project preparation and selection; a protracted pre-feasibility/feasibility/VfM/PSC cycle; a tension between socially acceptable tariffs and project bankability; and limited project capacity at the municipal level. It is substantiated that selecting the payment model (user-paid tariff, availability payments – AP, or hybrid) should be based on the life-cycle cost (LCC) approach, Value for Money (VfM) assessment and the Public Sector Comparator (PSC), as well as analysis of demand elasticity and fiscal space. The article demonstrates the need for a coherent de-risking architecture combining political/war risk insurance and guarantees with VGF and MRG instruments, indexed payments, FX hedging, and the development of long-term hryvnia financing (project and municipal bonds, participation of institutional investors). The paper proposes institutionalization (a central coordinating body, regional hubs, a Project Preparation Facility), standardization of template contracts and KPI / SLA, fiscal rules (limits on direct and contingent liabilities, a registry, regular stress tests), alongside open data, market sounding, and digital contract-management tools (BIM / CMMS / IoT). The importance of ESG requirements and transparent monitoring is emphasized. The conclusion is that a portfolio-based, standardized, and transparent PPP approach reduces the risk premium and WACC, increases competition and fiscal manageability, improves VfM, and accelerates infrastructure recovery and modernization without sacrificing service quality.
Keywords: public-private partnership (PPP), investments, infrastructure, availability payments (AP), minimum revenue guarantee (MRG), viability gap funding (VGF), Value for Money (VfM), Public Sector Comparator (PSC), life-cycle cost (LCC), weighted average cost of capital (WACC), de-risking, fiscal liabilities, long-term hryvnia financing, political and war risk insurance.
References
1. Verkhovna Rada of Ukraine. (2025, June 19). Law of Ukraine “On Public–Private Partnership” (No. 4510-IX). Available at: https://zakon.rada.gov.ua/laws/show/4510-20#Text [in Ukrainian].
2. Yescombe, E. R., & Farquharson, E. (2018). Public-private partnerships for infrastructure: Principles of policy and finance (2nd ed.). Butterworth-Heinemann (Elsevier). Available at: https://librarysearch.royalholloway.ac.uk/permalink/44ROY_INST/fdaefq/alma997463253002671
3. Grimsey, D., & Lewis, M. K. (2004). Public private partnerships: The worldwide revolution in infrastructure provision and project finance. Edward Elgar Publishing. https://doi.org/10.4337/9781845423438
4. Engel, E., Fischer, R. D., & Galetovic, A. (2014). The Economics of Public-Private Partnerships: A Basic Guide. Cambridge: Cambridge University Press. https://doi.org/10.1017/CBO9781139565615
5. Hodge, G., & Greve, C. (2007). Public-Private Partnerships: An International Performance Review. Public Administration Review, 67(3), 545 - 558. https://doi.org/10.1111/j.1540-6210.2007.00736.x
6. OECD. (2012). Recommendation of the Council on principles for public governance of public–private partnerships. OECD Publishing. Available at: https://legalinstruments.oecd.org/en/instruments/oecd-legal-0392
7. World Bank. (2017). Public–private partnerships: Reference guide (Version 3). World Bank. https://doi.org/10.1596/29052
8. European PPP Expertise Centre (EPEC). (2011). The guide to guidance: How to prepare, procure and deliver PPP projects. European Investment Bank (EIB)/EPEC. Available at: https://ppp.worldbank.org/sites/default/files/2024-08/EPEC_Guide%20to%20Guidance_EN.pdf
9. World Bank. (2020). Public–private partnerships fiscal risk assessment model (PFRAM) (Version 2.0). World Bank. Available at: https://ppp.worldbank.org/library/public-private-partnerships-fiscal-risk-assessment-model-pfram-2019-version-2-0
10. Zapatrina, I. (2010). Public–private partnership in Ukraine: The prospects of use to realize infrastructural projects and provide public services. Economy and Forecasting, 4, 62–86. Available at: https://ideas.repec.org/a/eip/journl/y2010i4p62-86.html
11. Zapatrina, I. (2018). Ukraine: The Ukraine Continues Development of PPP Regulation, But Still Needs Improving Institutional Capacity. European Procurement & Public Private Partnership Law Review, 13(1), 83–86. Available at: https://www.jstor.org/stable/26695257
12. Pavlovskyi, S., Slobodianyk, A., & Nikolaev, O. (2023). Theoretical and methodological features of public–private partnership in the implementation of economic activities of territorial communities. International Interdisciplinary Scientific Journal “Expert”, 1(1), 128–142. https://doi.org/10.62034/2815-5300/2023-v1-i1-010 [in Ukrainian].
© 2025 The Author(s)
This work is licensed under the Creative Commons Attribution 4.0 International (CC BY 4.0).
Rebryna, A., & Malskyy, O. (2025). ECONOMIC PRINCIPLES OF ATTRACTING INVESTMENTS TO UKRAINE ON THE BASIS OF PUBLIC-PRIVATE PARTNERSHIP. International Interdisciplinary Scientific Journal “Expert”, 2(1), 89–95. https://doi.org/10.62034/2815-5300/2025-v2-i1-008
Citation Format APA
Rebryna, A., & Malskyy, O. (2025). ECONOMIC PRINCIPLES OF ATTRACTING INVESTMENTS TO UKRAINE ON THE BASIS OF PUBLIC-PRIVATE PARTNERSHIP. International Interdisciplinary Scientific Journal “Expert”, 2(1), 89–95. https://doi.org/10.62034/2815-5300/2025-v2-i1-008.
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