The PPP Law - signed by President of Kazakhstan Nursultan Nazarbayev - was adopted in order to create a common legal framework to regulate public-private partnership projects, which could enhance the investment prospects of this vehicle for private businesses.
Public-private partnerships can also be used to implement projects in any sector of the economy. The state can be represented in such projects by either government or quasi-government entities.
The participants of PPPs include: (i) the state (ii) entrepreneurs and (iii) financial organisations that provide project financing. The Law stipulates the conditions for sources of financing for PPP projects, the reimbursement of expenses to subjects and income generation.
The Law also stipulates that a private partner may be selected on the basis of (i) a tender or (ii) direct discussions. It also defines the qualification requirements that a potential private partner must satisfy in order to participate in a tender process, the conditions for a tender process and the procedure for the conclusion of PPP agreements.
Although long-term cooperation with the state was possible in one form or another before the adoption of the PPP Law, it was quite complicated to formalise such cooperation and could require compliance with various laws on public procurement, state-owned property, strategic assets and facilities. The PPP Law has standardised and simplified this procedure, which should help to attract investment in Kazakhstan. Moreover, the procedure has been substantially streamlined for PPP projects involving the modernisation of existing assets of private companies or the use of intellectual property.