Uganda Goes Down The PPP Route

In July 2014, Uganda joined the list of African countries that have implemented Public Private Partnership or "PPP" laws, by passing the Public Private Partnership Bill 2012 (the PPP Law). As in many African countries, improving Uganda's infrastructure is seen as a key step in unlocking its economic potential. To address this, Uganda has identified a robust pipeline of road, power and social infrastructure projects which are beginning to come to market. These offer opportunities to both sponsors and lenders.

The PPP law adopts a simple approach. It focuses on establishing the framework for a successful PPP programme - it is not over-prescriptive and allows for different structures. This should provide comfort to both potential lenders and sponsors seeking a degree of certainty over process.

The Ugandan government envisages that the PPP Law will apply to design, build and operating projects across most industrial sectors, including transport (roads, rail and air), IT, social infrastructure, oil pipelines/refineries, mining and energy (both generation and transmission / distribution). The key requirement is that the proposed project "fulfils the objectives of the National Development Plan".

PPP Law - the principles

The PPP Law sets out eight basic principles of which the following will be familiar to all practitioners of PPP:

"ensuring value for money, by optional allocation of risks to private parties and maximisation of the benefits to be obtained from the expertise and financing by private parties" "ensuring that the procurement of a [PPP] does not restrict competition among bidders and that it is conducted on equal terms and uses objective criteria". Other principles relate to accountability and transparency.

PPP Law - the substance

The key areas that the PPP Law covers are as follows.

Management of PPPs

The PPP Law covers, among other things, the roles of:

the contracting authority (including clarifying its ability to participate in any financing); and government officers, such as the accounting and project officers. A streamlined and efficient process is a prerequisite for lenders and investors. They will welcome the requirement that the project officer must have "the required technical skills".

PPP Unit

The Ministry of Finance is charged with setting up a central PPP unit. Central PPP units can be a useful source of information and are often used to address 'deal breaking" issues which can arise where the public sector lacks the...

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