USUBC Legal Series: Rebuilding Ukraine – Legal Aspects (Oct 3, 2024)

Conference Organizer: US-Ukraine Business Council (USUBC)

Topics Covered: Infrastructure financing, the energy sector's critical needs, the importance of renewables and gas-fired generation as well as international funding for mine clearance, the Ukraine Facility, PPPs, and the potential for private sector involvement in infrastructure projects.

Speakers:
Iurii Dynys, Counsel, Attorney-at-law, DLF Attorneys-at-law
Yulia Kyrpa, Executive Partner, AEQUO
Oleg Matiusha, Partner, Head of Infrastructure, Transportation, Real Estate, and Construction, Kinstellar Ukraine
Vitaliy Radchenko, Managing Partner, CMS Cameron McKenna Nabarro Olswang Ukraine
Mykola Stetsenko, President, Ukrainian Bar Association (UBA); Managing Partner, AVELLUM

Outline:

Introduction and Overview of the Legal Series Webinar

Irina Paliashvili introduces the webinar as part of the ongoing legal series project in partnership with the Ukrainian Bar Association.
The webinar is the fourth in the series, focusing on rebuilding Ukraine and its legal aspects.
Irina encourages viewers to share their feedback and propose topics for future webinars.
Lev Holubec is introduced as the moderator, with a background in rebuilding Ukraine and a partner at PwC.

Introduction to the Panelists and Webinar Structure

Lev Holubec welcomes the audience and introduces the panelists, including Oleg Matiusha, Vitaliy Ranko, Yuri Dinis, Yulia Kirpa, and Nicola Stumco.
The webinar aims to provide feedback and reflections on the Ukraine reconstruction conference held in Berlin in June.
Lev explains the significance of the Ukraine rebuild conferences, especially in the context of Russia's war on Ukraine.
Each panelist is asked to present a brief on their respective topics, with questions to be addressed at the end.

Oleg Matiusha on Infrastructure Projects in Ukraine

Oleg Matiusha discusses the need for post-war recovery of Ukrainian infrastructure and the sources of financing for such projects.
He highlights the importance of engaging private investments and debt financing, along with grants from donors.
Oleg mentions the Ukrainian government's resolution 903, which aims to collect information on potential infrastructure projects and prioritize them.
He emphasizes the benefits of having detailed information on priority projects for private investors and the potential for PPP and concession projects.

Vitaliy Ranko on the Energy Sector Rebuilding

Vitaliy Ranko presents the challenges and opportunities in rebuilding Ukraine's energy sector, particularly the significant loss of capacity due to the war.
He discusses the importance of flexible generation and the need for small, distributed generation objects to avoid large-scale targets.
Vitaliy highlights the role of renewables and gas-fired generation in the recovery plan, along with the need for storage and balancing capacity.
He mentions the recent tenders for flexible capacity and the potential for battery storage capacity to be developed.

Iurii Dinys on Mine Clearance Services in Ukraine

Iurii Dinys discusses the critical role of mine clearance services in Ukraine's reconstruction, particularly in the agribusiness sector.
He explains the complex nature of mine action services, including training, equipment supply, and IT solutions.
Iurii highlights the challenges of funding and the need for international donors to support mine clearance efforts.
He emphasizes the importance of building trust between Ukrainian mine service providers and international donors.

Yulia Kirpa on Financing Aspects of Ukraine's Recovery

Yulia Kirpa provides an overview of the financing aspects of Ukraine's recovery, including the role of ifis and dfis.
She discusses the impact of the National Bank of Ukraine's measures to control foreign exchange and the gradual easing of these measures.
Yulia highlights the importance of the Ukraine facility and its role in providing financial support for recovery and reconstruction projects.
She mentions the potential for local financing through agreements between Ukrainian banks and borrowers implementing rehabilitation projects.

Nicola Stetsenko on Private Public Partnerships (PPP) in Ukraine

Nicola Stetsenko discusses the legal framework for PPPs in Ukraine and the potential for private investments in infrastructure projects.
He highlights the legislative changes in 2019 that brought Ukrainian legislation in line with EU practices.
Nicola explains the different forms of PPPs, including concessions and joint activity management, and the potential for new areas of PPPs in the future.
He mentions the expected overhaul of PPP regulations and the introduction of electronic PPP tenders and standard documentation.

Q&A and Closing Remarks

Lev Holubec moderates a Q&A session, addressing questions from the audience about the webinar topics.
Oleg Matiusha provides insights into the challenges of land acquisition and the use of mixed-type PPP agreements to address these issues.
The panelists emphasize the importance of private sector involvement and the need for a strategic vision for financing and infrastructure projects.
Lev Holubec thanks the panelists and audience, encouraging feedback and proactive engagement in Ukraine's reconstruction efforts.

Transcript:

Irina Paliashvili
00:00
He always said USUBC is the largest Ukraine-centered trade association headquartered outside of Ukraine. And he also loved to say that it is a strong international voice for business in Ukraine since 1995.

I also want to reiterate that this webinar is part of the ongoing legal series project, which we launched five months ago in partnership with the Ukrainian Bar Association. The president of the Ukrainian Bar Association, Mykola Stutenco, is here with us today as a panelist of this webinar.

This is a project designed by members, which are law firm members, for our business members. The project provides exclusive legal content, which we are not sharing publicly but which we will be making available to our members and also will download to the members-only section of our new website, which will be coming up soon.

This is the fourth webinar in the legal series. The first webinar was on the general legal framework for business and investment in Ukraine. The second webinar was devoted to martial law and how it affects business. The third webinar was devoted to the defense sector, and the webinar today is devoted to rebuilding Ukraine and legal aspects of rebuilding.

We always ask our viewers to share their views, their comments, their feedback, and also propose the topics for our next webinars in the legal series.

The webinar today is moderated by the member of the USUBC executive committee, Lev Holubec, who is a partner at PwC and co-leader of PwC’s very fittingly Rebuild Ukraine Global Task Force. Lev is actually an expert in the area of rebuilding Ukraine as a co-leader of PwC's Rebuild Ukraine Global Task Force.

Lev’s primary focus includes building the most effective private sector alliances to accelerate an efficient rebuild, helping investors understand and navigate the reconstruction landscape, and assisting clients operating in Ukraine.

So with this introduction, I’m leaving you in the capable hands of your moderator, Lev Holubec, who will introduce his panel. I encourage the viewers again to share feedback, comments, and ask as many questions as you can. Thank you very much, and good luck with the webinar.

Lev Holubec
02:54
Irina, thank you very much. Dobroho dnia, good afternoon to everybody in Ukraine, and good morning to everybody here in the western time zones.

I am very, very pleased to have the honor to run a moderated webcast regarding feedback and reflections upon the Ukraine Reconstruction Conference, which occurred in Berlin in June, at which I know a number of you were present. If not yourselves, then members of your organizations were. Each of us came back with different perceptions, reflections, and types of feedback.

So we’ve gathered a group of our colleagues from the USUBC to share very specific feedback across a number of very important elements of Ukraine's reconstruction. Without further ado, I’m going to introduce my colleagues, and we’re going to get started because there’s a lot of content.

Just for context, for those who are not familiar, Ukraine Rebuild conferences, which have been consecutive over a number of years, really took on a lot more significance after 2022, 2023, and 2024, following Russia’s full-scale invasion in February 2022.

The first post-massive invasion conference was in Lugano. Lessons were learned and taken into the conference in London in 2023, and then finally, more lessons were learned and adapted in Berlin in 2024.

We are currently in preparation for the subsequent conference, which will be in June of 2025 in Rome. That’s something we’ll address as the year progresses. As we learn more and are more involved in the preparation and understanding of that conference, we’ll share that with our membership as well so that each of us can get the maximum participation, input, and output from that conference.

The series today features five panelists. I’m going to ask each panelist to present a brief 5-7 minute overview of their topic. For the audience, please listen keenly and submit any questions you might have into the chat.

We will work through the questions and try to answer as many as possible. If we don’t get to your question on this webcast, you are invited to reach out to the panelists or any colleagues from USUBC for further discussions.

We are going to have the following speakers in this order:

Oleg Matusha, a partner at Kinstellar, will discuss the issues and opportunities in infrastructure projects in Ukraine.
Vitaliy Ranko from CMS Cameron McKenna will discuss rebuilding the energy sector of Ukraine, its challenges, and opportunities.
Yurii Dynys, attorney at DLF, Attorneys at Law, will discuss mine clearance, which is incredibly important as a condition for rebuilding the agriculture sector.
Yulia Kirpa, from Asters, will discuss the financing aspects, figuring out how and who is going to pay for the rebuilding and reconstruction, which is a massive task.
Mykola Stutenco, president of the Ukrainian Bar Association, will discuss PPPs, private-public partnerships, and concessions as a legal tool for rebuilding.

Without further ado, I’m going to pass the baton to Oleg. Oleg, please take over and lead us through the path.

Let me know if you would like any additional changes or further divisions of the content.

You said:

That's good. Now do the whole thing at once please

ChatGPT said:

ChatGPT

Here is the entire transcript with the paragraphs divided into smaller chunks for readability while preserving the original text and timestamps:

We always ask our viewers to share their views, their comments, their feedback, and also propose the topics for our next webinars in the legal series.

Lev Holubec
02:54
Irina, thank you very much. Dobroho dnia, good afternoon to everybody in Ukraine, and good morning to everybody here in the western time zones.

We are going to have the following speakers in this order:

Oleg Matusha, a partner at Kinstellar, will discuss the issues and opportunities in infrastructure projects in Ukraine.
Vitaliy Ranko from CMS Cameron McKenna will discuss rebuilding the energy sector of Ukraine, its challenges, and opportunities.
Yurii Dynys, attorney at DLF, Attorneys at Law, will discuss mine clearance, which is incredibly important as a condition for rebuilding the agriculture sector.
Yulia Kirpa, from Asters, will discuss the financing aspects, figuring out how and who is going to pay for the rebuilding and reconstruction, which is a massive task.
Mykola Stutenco, president of the Ukrainian Bar Association, will discuss PPPs, private-public partnerships, and concessions as a legal tool for rebuilding.

Without further ado, I’m going to pass the baton to Oleg. Oleg, please take over and lead us through the path.

Oleg Matiusha
07:08
Yeah, thank you very much, Lev, and pleasure to see you all here.

We all realize the need for the post-war recovery of Ukrainian infrastructure, which has suffered significantly during the last few years. At this moment, it's obvious that the cost of such recovery will be immense.

From my perspective, one of the most important questions on the agenda would be, what will be the source of financing for such post-war recovery? Who will finance it, and which legal instruments will be used to structure the post-war recovery projects?

Of course, we understand that infrastructure projects will be financed by the state using public funds. However, it is already clear that the government will not be able to fully fund the recovery and modernization of the country’s infrastructure without engaging debt financing, without grants from donors, and without deep cooperation with the private sector, involving private investments.

A crucial question here is whether Ukraine has a strategic vision for which source of financing to use for each particular project. This is important not only for the state in order to efficiently manage public funds but also for the private sector, which is interested in participating in post-war reconstruction projects and wants a better understanding of the available opportunities on the market.

Recently, our government made a significant step towards the development of a strategic and complex approach to this matter by adopting Resolution No. 903. This resolution and a number of other bylaws introduce a procedure for collecting information on potential infrastructure projects, evaluating, and prioritizing public investment projects for the post-war recovery period.

This resolution is designed to collect information from potential public partners on infrastructure projects and to establish a publicly available single project pipeline. It is also aimed at prioritizing infrastructure projects so that the most urgent projects are financed using public funds, while projects of lower priority are implemented in cooperation with the private sector, including on a PPP and concession basis.

Once this information is collected, the list of projects will be considered by the Strategic Investment Council at the Government of Ukraine and made available on the DREAM platform, which was established last year. Some of you may have already tested this platform and noticed that there isn’t much information yet available on large infrastructure projects, most of the public projects are small-scale projects of local importance.

However, it is expected that the situation should change dramatically once the government collects information on potential infrastructure projects.

You may ask, what are the positive outcomes or efforts from this government initiative? In my opinion, this initiative will create more opportunities for private initiatives in PPP and concession infrastructure projects.

By having detailed information on priority projects, private investors will be able to select projects that are of interest to them and prepare unsolicited proposals for PPP projects to take advantage of the benefits envisioned by the legislation for the post-war recovery period.

I believe the public sector, understanding the lack of public funds, will treat such unsolicited proposals more favorably. Ukrainian law offers several incentives to encourage private sector participation in post-war recovery and initiate PPP projects based on unsolicited proposals.

For example, the private initiator, under Ukrainian law, has a preemptive right to implement the project on the terms of the best proposal, even if its bid is not considered the best in a PPP tender. Moreover, the private initiator of PPP projects has the right to reimbursement for its expenses related to the development of feasibility studies and unsolicited proposals if it later decides not to implement the project based on the PPP tender's best proposal.

The draft law 7508, which is expected to be adopted shortly, offers even more guarantees for private initiators. Additionally, the law supports the idea of establishing a publicly available single project pipeline and creating a list of infrastructure projects of national and local importance.

It also allows for financing PPP projects through availability payments, including grants from donors, which can be transferred not only to state and local budgets but also directly to private partners.

Another significant amendment proposed by the draft law is the simplification of the procedure for preparing PPP projects and unsolicited proposals during the post-war recovery period. This will apply for approximately five years after the end of martial law and will allow the preparation of unsolicited proposals without requiring the preparation of a full feasibility study, making the process less expensive for private investors.

So, in summary, these are the key challenges and opportunities I see from the most recent changes in Ukrainian law and the upcoming legislation.

Lev Holubec
16:28
Oleg, thank you very much. Really appreciate that.

Just a reminder to the audience to please submit your questions into the chat. We have 75 minutes set aside, so we will be working up until 18:15 Kyiv time and 11:15 AM Eastern time here in the US. I have a feeling this panel will take it to the very last minute because there's lots of good information.

Oleg, thank you very much. I think there are a number of projects that are going to be financed through government structures. Many of my clients have asked if everything has to go through the government, and I think the answer is no.

There will also be projects that can be financed and led strictly by the private sector. So I think each of us as potential players in the reconstruction should look at the whole spectrum and understand what it will take to work with the government, but also recognize the opportunities where common business sense will prevail.

Vitaliy, I’m going to hand it over to you to take us through what is probably the top priority in Ukraine right now—the energy sector.

Vitaliy Radchenko
17:37
Sure. Thank you. Can you hear me okay?

Lev Holubec
17:39
Yes.

Vitaliy Radchenko
17:40
All right. Let me just try to share my screen.

Vitaliy Radchenko
17:49
I have a PDF. Can you let me know if you see it?

Lev Holubec
17:57
Yes, we see it. Okay, perfect.

Vitaliy Radchenko
18:01
So, as you said, the Ukraine Recovery Conference in Berlin earlier this year focused a lot on financing and energy, for obvious reasons, because we don’t have enough electricity or capacity in our grid.

This chart shows how much we had before the war and how much we have now. Almost half of our installed capacity was bombed and taken out by the Russians. This means 90% of our coal-fired generation plants are gone, and those plants usually provide balance capacity for peak consumption.

Then, of course, there’s the Kakhovka Dam, which would normally provide flexible capacity to the grid and consumers. Add to that the largest nuclear power station in Europe, which is currently not under our control as it is occupied by the Russians. So, our system has shrunk by at least half.

This coming winter will be difficult, especially because we don’t have flexible generation sources to meet peak consumption needs. For that reason, much of the discussion at the Ukraine Recovery Conference focused on flexible generation and how Ukraine can source it in a short time window.

This is how our electricity generation profile has changed over time, significantly shifting the balance between consumption and generation. Ukraine can import electricity from Europe, but the capacity of interconnectors is limited—physically limited—and we can only import up to two gigawatts or even less.

So, imports alone won’t solve the problem, even though there are plans to increase interconnect capacity going forward. This chart shows Ukraine’s electricity trade balance—if you see a minus, that means we are importing electricity. We have been importing a lot because of the gaps between consumption and generation. But, again, that’s only part of the solution.

Ideally, what the government and everyone else are thinking about is the need for smaller, distributed generation so that the cost of sending a missile to destroy a generation facility would exceed the value of the target.

To achieve this, we need to stop thinking about building two new nuclear blocks at existing nuclear power plant sites, like the one at Khmelnytskyi. The Russians know exactly where those are located and could target them with missiles.

Instead, the Ministry of Energy should focus on smaller, distributed generation objects. The ministry has been criticized for not moving fast enough on this front.

Recently, the ministry announced that it was reviving the auction system for renewables. Renewables are one of the quickest generation options to build, aside from some containerized solutions like small gas turbines or piston engines. But renewables need to be balanced by energy storage or flexible capacity.

The first auction is for 100 megawatts of renewable energy, which is clearly not enough, but we hope it’s just the beginning of a series of auctions. In addition to that, the government wants to build more gas-fired generation using gas engines or turbines, which range from 5 to 80 megawatts.

These engines could also be used to provide district heating, so cities and villages should consider that. During the Ukraine Recovery Conference, several international financial institutions (IFIs) indicated they would provide financing, mostly to state-owned companies, for energy projects.

For example, we advised Goldbeck Solar on its joint venture with the EBRD to build 500 megawatts of solar capacity in Ukraine. But there weren’t many private-sector announcements at the conference in terms of gas-fired generation or battery storage.

Recently, the grid operator Ukrenergo held tenders for flexible capacity, and there was strong interest from bidders. The first auction resulted in 100 megawatts of frequency containment reserve, and the second auction saw about 500 megawatts of frequency restoration reserve capacity secured. This means that in one year, we should have more battery storage capacity.

Still, it won’t be enough. Ukrenergo believes there is a business case for energy storage in Ukraine, and it could be a profitable investment for those who build it.

Vitaliy Radchenko
27:48
Regarding gas generation, Ukraine’s gas production has been declining in recent years, partly due to a lack of incentives for producers. Gas exports are prohibited, which limits the potential returns for producers. However, despite the war, drilling activity remains high, and Ukraine has contracted the most drilling rigs in Europe.

Unfortunately, gas storage levels are lower than in previous years, so we could face a shortage this winter. Naftogaz has started injecting more gas into storage, but whether we have enough will depend on how harsh the winter is.

In summary, the Ukraine Recovery Conference focused on financing new generation capacity, especially flexible generation. While one gigawatt of new capacity was promised by the end of the year, experts are skeptical that this target will be met. New generation capacity, its financing, construction, and equipment remain the main challenges for Ukraine going into winter 2024-2025.

With that, I’ll conclude the presentation. Thank you.

Lev Holubec
29:18
Thank you very much, Vitaliy. Lots of content, very, very important area—in fact, you could call it critical for both today and for the rebuild effort.

There was a question from the audience asking whether the recording will be available. Yes, we are recording this webcast, and it will be made available for members. We will also share all presentation materials, as there is some very rich information here, and we will share contact details for each of our panelists.

With that, let’s pivot to another critical sector, which is agribusiness. One of the key deterrents to growth right now is the fact that much of our farmland has been mined.

Yurii, I’ll hand it over to you, please.

Iurii Dynys
30:17
Thank you for the warm introduction. I also want to thank USUBC and the Ukrainian Bar Association for this opportunity to share insights with my colleagues and the business community.

Today, I want to discuss a critical but often overlooked aspect of Ukraine’s reconstruction: mine action services. Despite the ongoing conflict, Ukraine’s agribusiness remains alive and demonstrates remarkable resilience. However, the war’s shadow looms large, and the scars are evident not only in people’s lives but also in the economy.

Currently, 144,000 hectares of arable land are mined. It’s not just land; infrastructure objects, ports, roads, and logistics hubs are also contaminated. The situation has severely disrupted agricultural activities and vital infrastructure.

As we look to the future, the importance of demining this land and restoring infrastructure cannot be overstated. Demining is pivotal to Ukraine's recovery and reconstruction.

I would also like to highlight that humanitarian demining in Ukraine has some peculiarities. First of all, it’s not just about clearing land for safety—demining is a complex business and a multifaceted industry.

Let me dispel a common misconception: Mine action is often thought of as people with detectors roaming the fields, finding mines, and digging them out. In reality, it’s much more complex. It involves training personnel, and it’s not just sappers. There are technicians, managers, IT specialists, drone operators, and so on. It’s about supplying and manufacturing equipment and machinery, developing new technologies, mapping, building data systems, logistics, and hazardous waste management.

There’s also a financial and consulting framework that supports the physical clearance of mines. This broad spectrum of activities creates one of the largest markets in Ukraine—and globally—for these services.

The World Bank estimates that the market’s capacity is around $37 billion, with decades of active growth potential.

Let’s look at the current landscape of the mine action services market. Right now, the market is just beginning to form. Current and potential participants include investors, international organizations, donors, governments, demining equipment suppliers, and training providers.

The main competitors on this market are the state mine action operators like the State Emergency Service, the National Police, and military demining squads, as well as large international corporations and organizations like Halo Trust, FSD, Tetra Tech, and surprisingly, black market deminers. While it may sound strange, black market deminers are real competitors because they are cheaper and faster, making them attractive to farmers in urgent need of demining services.

The next major issue is funding. Mine clearance is expensive, and most of the funding comes from donors and international organizations. While there are examples of private companies financing demining, such as Nibulon, this is rare due to the high costs.

Iurii Dynys
40:09
The funding rules for donors and international organizations are too strict, which has made it difficult for Ukrainian deminers and companies to access the funds. There’s also a lack of transparency and access to mined land.

Does this mean the mine action market in Ukraine is unpromising? Not at all. We have examples from other post-conflict regions, such as Kosovo, where initial centralization of funding eventually led to decentralization, allowing the market to grow.

First of all, the need for mine clearance will not go away. This is especially true for the agribusiness and logistics sectors. Delaying demining means lost opportunities and economic losses. The market for demining and related services cannot fail under these circumstances.

Secondly, this is not a market that you should wait for all problems to be resolved before entering. Mine clearance requires more than just removing explosives—it requires a range of services, including training, equipment development, logistics, and certification. Building trust between Ukrainian mine action service providers and international donors is essential.

In summary, the mine action business in Ukraine is rapidly developing, presenting not just challenges but also tremendous opportunities. While some may choose to wait for a perfectly functioning market to emerge, those who act now will benefit.

Thank you very much, ladies and gentlemen. I am the head of legal for demining practice at our company. If you have any questions, feel free to reach out to me directly. Thank you.

Lev Holubec
44:40
Thank you, Yurii. There’s a lot to unpack in your presentation. I think it’s fair to say that each of these topics warrants its own webcast and deeper thinking sessions.

We look forward to hearing your feedback on this session and on areas where you’d like to dig deeper. USUBC is here to serve its members, and we will gladly organize follow-up presentations, webcasts, and roundtables as needed.

Yulia, several of our panelists have already touched on financing. Can you bring it together and give us a more macro perspective on financing? The floor is yours.

Yulia Kyrpa
45:38
Thank you, Lev. I’d be happy to do that and cover financing aspects in more detail.

Just a few words about myself: I’m an Executive Partner at Asters. Besides that, I’m a board member of Agroprosperis Bank in Ukraine, which is 100% owned by US capital, and I’m also a board member of the Register of Damage for Ukraine, an international organization dealing with reparations for Ukraine.

Speaking about cross-border financing and trends in Ukraine in 2024, I would like to take a step back and remind everyone how it all started after the full-scale invasion and how Ukraine has managed the crisis.

In 2022, the National Bank of Ukraine imposed strict foreign exchange control measures to stabilize the hryvnia and prevent the outflow of hard currency from Ukraine. By 2024, however, the National Bank has started to gradually lift these measures, allowing for more cross-border exchange transactions.

Resolution No. 56 from May of this year introduced several simplifications, including the repayment of cross-border loans and the repatriation of new dividends. These measures have had a positive impact on the investment climate in Ukraine.

Most of the major financing transactions in Ukraine prior to the war were focused on ambitious capital expenditure plans in energy and infrastructure. Some well-known examples include Ukraine’s road operator Ukravtodor, DTEK Renewables, and Ukrenergo, which successfully raised funds in international capital markets and issued Eurobonds.

Now, the focus has shifted to rebuilding national power generation capacities, particularly renewables. There have already been several transactions demonstrating this new trend in cross-border financing.

For example, we advised on a 200 million Euro loan from the EBRD to Naftogaz and another financing deal involving IFC for a wind farm being built by Galnaftogaz. These are just a few examples of how IFIs have resumed their financing of private projects in Ukraine.

Yulia Kyrpa
51:30
IFIs and DFIs will play a critical role in Ukraine’s recovery, as private lenders are currently unable to finance Ukrainian projects due to internal policies, a lack of war insurance instruments, and other reasons.

While private capital is largely unavailable, IFIs and DFIs remain active. In 2022, most of the funding was concentrated in the public sector and was directed toward state-owned enterprises like Naftogaz, Ukrzaliznytsia, and Ukrenergo.

However, in 2024, we are starting to see investment plans from IFIs for private sector projects as well. This is a positive sign, as it means that the private sector is gradually becoming a focus for these institutions.

It’s important to note that returning to the international capital markets is still a challenge for Ukrainian companies, as credit ratings have suffered due to the war and Ukraine-related risks. Most capital market transactions since the war began have focused on restructuring existing Eurobond issues.

For example, the Ministry of Finance reached an agreement with sovereign bondholders in 2022 to defer coupon payments for two years, and this was extended in 2024. Similar restructurings have taken place at major state-owned enterprises.

While capital markets remain closed for new borrowings, these restructuring deals have helped alleviate the financial pressure on Ukrainian issuers.

In terms of financing the recovery and reconstruction, Ukraine’s recovery plan has been supported by the EU’s Ukraine Facility, which provides up to €50 billion in stable financial support over the next three years. This facility will be used to support public infrastructure projects, SMEs, and energy sector investments.

Local banks in Ukraine have also signed a memorandum to provide affordable loans for energy and infrastructure rehabilitation projects, which offers another financing avenue.

Lev Holubec
1:00:21
Yulia, I’m sorry to jump in here, but we’re running short on time. I’ll hand it over to Mykola for his presentation, and we’ll try to leave a few minutes at the end for wrap-up and questions.

Mykola Stetsenko
1:01:39
Thank you, Lev. Let me share my screen.

Today, I’ll be speaking about public-private partnerships (PPPs) in Ukraine. I’ll touch on some of the issues that Oleg already covered and delve deeper into the key legal aspects that are important for potential investors.

PPPs in Ukraine are particularly relevant in sectors like transport infrastructure, healthcare, education, and tourism. Several successful PPP projects have already taken place, including port concessions and airport upgrades.

In 2019, significant improvements were made to Ukraine’s PPP legislation, aligning it with EU best practices. The term for PPPs in Ukraine can be up to 50 years, and private partners take on the implementation risk.

There are several forms of PPPs in Ukraine, including concessions, joint ventures, and management contracts. We expect further improvements to the legislation by the end of this year, with a focus on streamlining the process for PPPs related to reconstruction.

For example, electronic PPP tenders, standardized documentation, and faster approval processes for smaller projects are among the expected changes.

One of the key challenges in PPP projects is land acquisition and title transfer. We’ve been involved in a road construction PPP that required coordinating with multiple regions and municipalities to secure land.

Draft law 7508, which is expected to be adopted soon, will introduce further simplifications, including allowing private partners to begin construction without obtaining full title to the land.

The law will also extend the period for preparatory work, which will make it easier to handle complex land buyout issues.

Lev Holubec
1:12:45
Thank you, Mykola. That was a great speed version of a very complex topic!

We’re almost out of time, but I want to thank all of our panelists—Vitaliy, Yurii, Yulia, and Mykola—for their rich and insightful presentations. There’s clearly a lot more to discuss, and we will be organizing follow-up sessions on these topics.

For our members, please give us your feedback. Let us know which areas you’d like to explore in more depth, and we’ll arrange additional webcasts, roundtables, or presentations as needed.

Thank you very much on behalf of USUBC. We’re here to support Ukraine’s reconstruction efforts and to serve our members.

Thank you, everyone!

Audio:

USUBC Legal Series Rebuilding Ukraine Legal Aspects

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