Belarus: Investors can now go for projects in Belarus on the basis of public-private partnership agreements.
Law № 345-З of 30 December 2015 (‘Law’) lays the ground for public-private partnership development.
Under the Law, sectors of the economy public-private partnership can be carried out in sectors such as: road and transport management, public utilities, healthcare, energy, telecommunications etc. The Law enables transfer of infrastructure, even free of charge, to a private partner for possession and use, although property rights remain with the State. The State and the private partner can agree other terms and include them in a public-private partnership agreement.
The Law sets the following steps during public-private partnership project development:
1. Public sector bodies (entities) are responsible for inviting tenders for projects based on public-private partnership. Meanwhile, private investors can also propose counteroffers.
2. A tender for choosing a private partner is mandatory. The Law allows only two exceptions: force majeure and the need to ensure the defence capability and national security of Belarus.
3. Conclusion of the public-private partnership agreement
The Law sets requirements for the content of the agreement. However, most provisions of the agreement are not mandatory under the Law and can be negotiated with the State.
Sources for reimbursing expenses plus the profits of the private partner are set by the agreement on the results of the tender. According to the Law, these can be paid to the private partner by means of: sale of goods, works or services during operation of the infrastructure by collecting payment from consumers; budget financing; other legal sources.
The private party gets all the guarantees generally provided to investors (e.g. guaranteed money transfer, protection of property against nationalization). Moreover an opportunity will be available to set a “grandfather clause” in the agreement – a world practice in investor protection, which means that subsequent negative legislation will not apply to investors instead of the law applicable when the agreement was made.
The law becomes effective on 2 July 2016.
For more information, please follow the link.
Source: National legal Internet portal of the Republic of Belarus (NLIP) 01.01.2016, 2/2340