PPP application prospects were discussed at AGROINVEST Russia 2017 International Summit


Evgenia Zusman, the partner in You & Partners, spoke on the prospects of applying PPP in agriculture during Agroinvest Russia 2017 International Summit.

Evgenia Zusman pointed out that there are cases of applying PPP instruments in agriculture across the globe. For instance, PPP projects are implemented in the plant industry of the USA, Indonesia, and Pakistan. Fishery projects are implemented in such countries as Iceland and Philippines, while projects in animal production are common for Denmark and Netherlands.

The Russian legislator provided in the Law “On concession agreements” and the Law “On PPP” the option to enter into concession agreements and PPP/MPP agreements with respect to agricultural production, primary and (or) subsequent (industrial) processing and storage facilities. However, such agreements cannot be concluded unless the facilities are included into the list approved by the Russian Government. No such list has been approved for today and, therefore, it is not practicable to enter into such agreements.

As soon as the list is enacted (the draft regulation of the Russian Government is now under regulatory impact assessment), it will become possible to enter into concession and PPP agreements in respect of the following facilities:

  • seed breeding centers in plant industry and animal production;

  • genetic breeding fishery centers (breeding farms);

  • fish farming and breeding complex (farms);

  • livestock breeding complex for dairy stock farming (milk production) and beef producing;

  • greenhouse complex;

  • elevators (granaries), vegetable (potato) and fruit storehouses;

  • agrologistics centers (common use centers) and industrial logistics clusters;

  • wholesale and distribution centers;

  • agro-industrial parks;

  • transregional wholesale and distribution centers (including those export-oriented);

  • food and processing industrial facilities.

    Evgenia mentioned that the latest industry trends spoke for reducing state involvement in it and various agricultural facilities going private. As a consequence, public and private partnership will remain of immediate interest for those assets state or municipally owned (under concession agreement), as well as for such privately-owned facilities that require raising considerable funds, including budgetary means.

As an illustration of structuring a concession project, a PPP agreement initiative was presented to the audience concerning a trout farming asset complex in one of the constituent entities of the Russian Federation.

You & Partners Press Service

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