Atameken: A set of measures needed to address problems of PPPs financing
The participants of “Time is Money section. Problems of PPP financing", the first Public-Private Partnership Investment Forum in Nur-Sultan, offered their ways of solving the problems.
The speakers agreed that for successful implementation of the projects, they should be carefully calculated and structured.
Yuliya Yakupbayeva, Deputy Chairman of the Board of Atameken, emphasized the importance of closing the risks of lender and investor.
"Since the contracts, which are concluded under PPP, are not off-take agreements, the banks do not recognize them as a firm pledge. Cash flows are not guaranteed, every year it is necessary to renegotiate contracts for services, there is no compensation for early termination of contracts, high risks of default on obligations on the part of the state partner," Yuliya Yakupbaeva said.
To solve these problems, the Deputy Chairman of the Board of Atameken proposed to work on the definition of the mandatory conditions of the PPP contract, guaranteeing stability. In particular, the off-take agreement should contain mandatory compensation in case of early termination, the mechanism of special circumstances and a detailed payment mechanism.
The speaker also proposed to create a "PPP knowledge base".
"The time has come to reformat the activity of KazCenter of PPP. We believe that it is necessary to create a core, which will unite all the expert resources of PPP in the country. It is necessary to form a "knowledge base" in the field of PPP, to rank regions by the level of PPP development and replicate best practices. Thus, we will close the issues of monitoring projects and improving competence on the ground," Yuliya Yakupbayeva said.
Deputy Chairman of the Chamber noted that it is necessary to create an information platform for PPP project management and abandon the simple maintenance of the PPP register.
"There is a need for an information platform for PPP project management, and we need to abandon the simple maintenance of the PPP register. We need to organize a territorial review of all projects with their electronic passports. It is also necessary to create a database of successful cases. We need to make the acceleration of PPP projects. This will help to form high-quality statistics and analytics, that significantly simplify the search for investors," the speaker said.
Yuliya Yakupbayeva added that the proposed measures will be useful for private individuals, creditors and inspection bodies.
The topic of fair distribution of risks was supported by MFI representatives as well.
"To develop PPPs, it is necessary to comply with several key conditions: an acceptable legal environment, a well-thought-out tariff methodology and a balanced contract between the grantor and the concessionaire," Grigoriy Savva, Senior Banker of EBRD, said.
It was proposed to continue the discussion on optimization of PPP project financing mechanisms on the platform of the working group on the draft law in the Ministry of National Economy and on the platform of the Council for monitoring PPP projects.
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