Main Amendements To The PPP Legislation

• Published date: 01 March 2021
• Subject Matter: Finance and Banking, Government, Public Sector, Financial Services, Project Finance/PPP & PFI, Inward/ Foreign Investment
• Law Firm: Unicase Law Firm
• Author: Unicase Law Firm

Since 2017, Uzbekistan has been experiencing a significant increase of foreign investment activity. The government has been implementing numerous reforms in its domestic legislation regarding openness and attractiveness of the foreign investment market in Uzbekistan.

The main issues in the implementation of investment projects were the following: what benefits and preferences they can get and what guaranteed benefit they would receive.

On June 10, 2019, the Law of the Republic of Uzbekistan "On Public-Private Partnership" (hereinafter - the "Law on PPP") was adopted, it has expanded the types of mechanisms for implementing investment projects. On January 22, 2021 legislators have amended the Law on Public Private Partnership ("PPP") which had a significant impact on investors.

The amendments effected the following sections of the Law on PPP:

1. The Law "On currency regulation" No.357 dated October 22, 2019, and the Law on PPP were amended. For example, linking foreign currencies or digital units to the costs of goods and/or services is prohibited in Uzbekistan. However, the new amendments make exceptions for the investment projects which involve foreign investment under PPP agreements and investment agreements based on presidential decisions. Such novelty is an important stage for the development of the PPP market because it reduces the risks for foreign investments;
2. Numerous definitions and concepts were also introduced: E.g., a concession is a form of PPP in which the state provides a private partner with properties and land plots and issues a permit to carry out certain types of economic activities in the course of the concession agreement;
   Another example is the new concept: "Success Fee Payment" which means a single payment by the bid winner to the state budget;
3. The novelty also defined a new authorised body - PPP Development Agency, which hold the following functions
   • coordinating the tender documentation of PPP projects and drafting PPP agreements with a total value of more than one million USD;
   • conducting negotiations with the international financial institutions, the international and local consulting and project developing organisations on consulting and auditing services within the framework of the PPP projects, as well as concluding contracts;
   • entering into the agreements with the winner of the tender or a participant in direct negotiations in order to charge a one-time payment for the successful execution of a publicprivate partnership...