A major challenge to improving the investment climate is getting the attention of government with recommendations, proposed legislation, or new ideas. For PPP development in Ukraine, this obstacle has been overcome through the launch this month of the PPP and Infrastructure Expert Center (PIEC), a joint effort by P3DP and the American Chamber of Commerce (AmCham) in Ukraine.
PIEC, which is based within the Chamber, will serve as a platform for businesses and other stakeholders to advocate for reforms that improve the environment for Public-Private Partnerships and investment into infrastructure. Activities and services will also include promoting opportunities and facilitating the closure of specific PPP agreements. By joining forces, P3DP and the Chamber are confident that the design and success of reform efforts will be increased.
The event, attended by approximately 80 representatives from the private sector, helped cement P3DP as an authority on PPPs in Ukraine. Since the launch, P3DP numerous companies have approached P3DP with questions about PPPs, including Nestlé. Andriy Bilousov, Deputy Minister of Regional Development, Construction and Housing and Communal Services of Ukraine and Andriy Bondarenko, Deputy Minister of Infrastructure of Ukraine, spoke at the event and expressed strong support.
AmCham, founded in 1992, represents foreign investors in Ukraine and is a strong advocate for policy reforms. The establishment of PIEC ensures that potential investors will have a voice in the development of Ukraine’s PPP policies and that PPPs will continue to develop after P3DP closes in September 2015.
News coverage of PIEC’s launch (Ukrainian)
On December 5, 2013, P3DP co-organized an International Conference with the Ukrainian Agrarian Business Club: Doing Agribusiness in Ukraine: Perspectives for 2014. At the plenary session, P3DP’s international expert Edward White spoke to over 300 participants about the use of PPPs in agriculture, drawing from global experience. During a break-out session on PPPs in Agriculture, P3DP led a discussion focused on developing pilot PPP projects in the Ukrainian agricultural sector.
Over 30 participants from private companies, professional associations, academic institutions and USAID projects discussed various aspects of PPPs in Ukraine with great interest and an emphasis on specific experience. Although none of the projects discussed were launched under Ukraine’s PPP law, there is ample experience, particularly in USAID projects, that illustrates the mechanisms and benefits of private sector participation in the development of agricultural infrastructure.
Mykola Hrytsenko, USAID Agroinvest Project Manager of Market Infrastructure Development, discussed their experiences partnering with local governments in developing infrastructure for agrarian markets. Viktor Andrievskiy, Director of the Agricultural Markets Development Institute, which is implementing the USAID Water for Crimean Agri-sector Project, shared the experience of using PPP models for renovating the water supply infrastructure for rural populations and agricultural production in Crimea. Ruslan Tormosov, Director of USAID Local Alternative Energy Solutions in Myrhorod, talked about his vision of using a PPP to establish a logistical center for providing steady supply of biomass to boiler houses.
Following the Conference, P3DP wrote an article, Public-Private Partnerships in Agriculture: International Lessons Learned and Opportunities for Ukraine, which highlights areas where PPPs are used internationally in agriculture, including an analysis of the Ukrainian legal and institutional framework.
You can download speaker papers and presentations at the following links:
- Practical Experiences in Ukraine: Partnering with Local Governments in Developing Infrastructure for Agrarian Markets by Mykola Hrytsenko, Manager of Market Infrastructure Development, USAID Agroinvest Project (Ukrainian).
- Use of PPP for Establishing a Logistical Center for Providing a Steady Supply of Biomass to a Network of Boiler Houses by Ruslan Tormosov, Executive Director, ICF Municipal Development Institute (Ukrainian).
- Use of PPP models for Renovation of the Water Supply Infrastructure for Rural Populations and Agricultural Production in Crimea, by Viktor Andrievskiy, Director Agricultural Markets Development Institute, USAID Water for Crimean Agri-sector (Ukrainian).
The P3DP team extends its sincere thanks and appreciation to its partners, colleagues, and clients for their cooperation, collaboration and support we enjoyed throughout 2013. Together, we accomplished a great deal toward establishing Public-Private Partnerships in Ukraine and expect even greater success in 2014.
During the coming year, multiple pilot PPP projects are slated to be tendered and the National PPP Strategy is to be adopted and implemented. Even in these challenging economic and political times, we are confident that that these sustainable projects being introduced in health, education, solid waste management, parks and recreation, and alternative and renewable energy will bring desperately needed improvements to public services and infrastructure.
Equally important, we believe the processes used to develop the PPPs will lead to more transparent and effective governance, create business opportunities, and help improve the overall environment. We also expect that many of the PPP pilots will be adapted and replicated in other cities, leading to broader investment and greater cooperation between the public and private sectors.
We remain optimistic about Ukraine and expect great things from it as a country – even more so from its people. We look forward to “partnering” with all of you as we work together to establish lasting partnerships that bring benefits to all Ukrainian citizens.
Happy Holidays and have a Great New Year.
P3DP’s work supports the USAID’s Climate Change and Development Strategy and President Obama’s Global Climate Change Initiative. We help Ukraine become climate resilient and encourage low-emission sustainable economic development through legislative reform, capacity building, and pilot PPP projects that reduce greenhouse gas emissions and encourage use of renewable energy.
P3DP’s success training in Energy Efficiency and Renewable Energy PPPs in Zhytomyr (see story on page 1) isn’t the only way P3DP is promoting investments in clean energy in Ukraine. We use a multi-pronged, complementary approach to dealing with climate issues. Our approaches include:
- Promoting Clean Energy through Legislative Engagement. P3DP has included provisions promoting clean energy in Ukraine’s PPP policy and provided input to draft legislation. These inputs are expected to encourage use of ESCO contracts, improve solid waste management, and encourage PPPs for for improving the resource and energy efficiency of the housing and communal sector.
- Building Environmental Knowledge and Capacity. In addition to teaching national, regional and municipals about the fundamentals of public-private partnerships, P3DP demonstrates how the private sector can contribute to low emission, sustainable economic development through financing, technology, and managerial know-how.
- Clean Energy Pilot PPP Projects. P3DP’s pilot PPP projects have a positive impact on greenhouse gas emissions and greater energy efficiency. Pilots in Vinnytsia, Ivano-Frankivsk, Dnipropetrovsk and Malyn are expected to demonstrate how PPPs can mitigate climate change by generating electricity with landfill gas and biofuel and use of energy-efficient street lighting. Estimated reductions resulting from U.S. Government assistance delivered through P3DP will be equivalent to 998,159 metric tons of CO2.
After three years of developing PPPs in Ukraine using a participatory approach, P3DP has become a valuable partner to IFC, the World Bank, the European Union, and other international institutions seeking a role for the private sector in their own projects. P3DP’s ongoing work with the Ministry of Economic Development and Trade has given us unequaled depth of experience in PPP policy and legislative issues. Our collaborative approach and strategic communications skills help P3DP leverage its experience with that of other developmental institutions to maximize the impact of our work. This helps Ukraine lay the foundation for a strong economy and build transparent, democratic institutions necessary for long-term prosperity.
In recent months, P3DP has been approached by numerous organizations to collaborate on PPP-related issues, including policy, legislation, and investment projects:
- IFC, the private sector arm of the World Bank Group, requested P3DP’s support on legislative review of the road concession law related to a multi-year, multi-million dollar transportation project;
- Mick Mullay was invited to speak at a conference in Poland conference along with IFC, EBRD and other institutions about the PPP environment in Ukraine and how PPPs contribute to the change in procurement culture in a historically difficult business environment;
- P3DP’s Ruslan Kundryk was invited to lead a discussion on P3DP’s recommendations for changing the PPP law at the American Chamber of Commerce, an event attended by senior government officials and private sector investors;
- The World Bank invited P3DP to participate in a workshop on solid waste management in Ukraine. P3DP’s work on two solid waste management projects and familiarity with related legislation enabled us to make valuable contributions to the discussion;
- The European Union invited P3DP to talk about the possible role of PPPs in tourism development in Crimea, drawing from its experience implementing PPPs there.
P3DP approach has made it the partner of choice for any work involving PPPs in Ukraine. By integrating our work, collaborating with government, the private sector, NGOs and other developmental institutions, we expect to leave a lasting mark on Ukraine’s development.
Governor Mykhailo Vyshyvaniuk of the Ivano-Frankivsk Region visited Vinnytsia this week for a first-hand look at P3DP’s pilot PPP landfill biogas extraction project. The project aims to generate power from landfill gas at a municipal landfill. The energy produced will reduce the need for power from more polluting sources, reducing carbon emissions by an estimated 20,000 tons and increasing Ukraine’s energy independence.
This municipal cross-learning study tour is an excellent example of how P3DP facilitates knowledge sharing on the role of PPPs in energy efficiency and renewable energy in Ukraine. P3DP’s Tatiana Korotka, Nelia Makary, and Alexandra Chalaya facilitated the event.
The idea for the study tour came up in September, when the Governor visited P3DP’s offices in Kyiv to discuss a biogas extraction project in Ivano-Frankivsk. P3DP-supported tests indicated that there are sufficient gas emissions at a municipal landfill in Ivano-Frankivsk to generate electricity. Under a PPP, the city plans construct power lines from the site to the grid and enter into a PPP with a private operator to build and operate a power generating facility. The total investment could reach $3 million and generate 10 new jobs.
P3DP, as transaction advisor to both projects, presented key topics during the visit. These included information on best-practices in landfill management, including biogas extraction; social, economic, financial, and legal implications of the project, and environmental issues such as the Kyoto Protocol, green tariffs, energy-efficiency and related taxes. The roles and responsibilities of private operators in such PPPs were also discussed.
A key objective of P3DP is to improve Ukraine’s legislative and institutional framework for public-private partnerships. Through a participatory process that engages key stakeholders, P3DP has drafted more than 15 different policies, legislation, amendments, decrees and ministerial orders that support PPP development. The National PPP Concept and multiple amendments have already been adopted.
Ruslan Kunkryk, P3DP’s Manager of Legal Reform Activities, led a discussion on PPP legislative reform at a working roundtable hosted by the American Chamber of Commerce on September 30. He pointed out that existing laws increase uncertainty for investors and discourages the pursuit of PPPs. Current tariffs, land use regulations, public budget policy, and weak risk allocation must be improved before the private sector can play a bigger role in delivering better infrastructure and public services. He outlined specific proposals, facilitated discussions and analysis, and invited participants to provide feedback. The input will be used to modify recommendations and suggested amendments.
Key government officials participated, including Pavlo Pakholko from the Ministry of Economic Development and Trade (MOEDT), Mr. Tarasiuk of the Cabinet of Ministers, and Lyudmyla Paschenko of the Ministry of Regional Development. Other officials, law firms, NGOs and private sector representatives also participated.
This event is an example of P3DP’s approach to strategic stakeholder communication. By spotlighting key issues, coordinating stakeholders, and facilitating dialogue, P3DP is contributing to creating the stronger economy and good governance in Ukraine needed for economic and democracy development.
P3DP’s Tatiana Korotka, Valeriy Dobrovolskiy, and Chris Shugart, P3DP’s PPP expert, met Lviv city officials on September 26 to assess the status of the pilot PPP Parking Garage Project that is an integral component of the city’s comprehensive transport management plan.
First Deputy Mayor Oleg Sunyutka and Chief of the Lviv Investment Department Serhiy Kiral assured P3DP that the project retains a high level of political support. Parking is a priority for the Mayor, along with roads, sanitation and urban transportation. Although the municipality cannot provide subsidies for the project, it will be able to ensure enforcement of parking policies in the area, which will provide greater demand for paid parking.
Lviv’s Investment Department committed to answering all questions raised during discussion of the draft market sounding note and providing engineering, traffic analysis and other data. Upon receipt, P3DP will complete the draft and share it with three to four private operators to obtain additional feedback. Their responses will be used to adapt and complete the document prior to its use in market testing activities. The information contained will also help the private sector to understand the project and develop competitive proposals for consideration.
Due to steady increases in the number of cars per capita in Lviv coupled with poor urban planning has resulted in extreme traffic congestion and lack of parking areas. The proposed PPP Parking Garage is expected to reduce these problems that hinder retail business activity and worsen the quality of city life.
Mayor Groismann of Vinnytsia and USAID Mission Director E. Jed Barton at the P3DP booth.
The Executive Committee of the Vinnytsia City Council has been planning the construction of a new state-of-the-art landfill using a modern SWM management system that includes waste sorting, a waste processing plant and the closing and recultivation of the current landfill by 2017. It also includes a potential PPP to generate electricity from biogas at the existing landfill. P3DP has been working with the city to develop this as a pilot PPP project.
USAID’s Tent City and P3DP’s booth were well attended. P3DP distributed a flyer about the pilot PPP project and posted information about it on a board.P3DP also engaged local artists to conduct a master class on recycling called New Life to Old Things, teaching children how to live a zero-waste lifestyle. While the kids were busy, P3DP staff told their parents about the benefits of the biogas PPP and the closure and recultivation of the landfill. Citizens also received notebooks made from recycled materials and branded with USAID and city logos and the name of the pilot PPP project.
USAID Ukraine Mission Director Mr. Jed Barton and the newly appointed Head of the Economic Growth Mr. Stephen Gonyea spent considerable amount of time at the P3DP booth, along with P3DP COP Mick Mullay. The City Mayor Mr. Groismann and the municipality staff also attended the P3DP booth. Mick Mullay and Nelia Makary discussed issues related to the pilot project with municipal counterparts Mr. Korolchuk, Head of the Department of Communal Services, and Mr. Chornovol, Head of the communal enterprise Ecovin.
In June, P3DP participated at a USAID Field Days event in Simferopol, where it informed citizens about pilot PPP project in Gagarin Park.
In October 2013, the USAID Public Private Partnership Development Program (P3DP) is launching a series of trainings on the peculiarities of public-private partnerships (PPPs) in the energy efficiency and renewable energy sectors. The trainings will welcome municipal staff of five P3DP pilot cities: Dnipropetrovsk, Ivano-Frankivsk, Kyiv, Malyn and Vinnytsia.
This activity is a part of the P3DP PPP capacity development efforts for its partner cities, where pilot PPP projects are being developed, and will specifically focus on models of applying the PPP mechanism in the area of energy efficiency and renewable energy sources.