Public and Private Sector Partnership

What is PPP?

Lithuanian PPP definition is established in the Law on Investments: “public and private sector partnerships are legally established types of cooperation between the state or municipal authority and a private body that enable the state or municipal authority to transfer its activity to a private body, while a private body invests in this activity and the assets necessary to perform this activity and receives for this a legally established remuneration”.

Current Lithuanian legal basis provides for application of the following PPP forms, supposing private capital investment:

  1. concession (in accordance with the Law on Concessions) – when the public body (awarding authority) grants authorization to the private body (concessionaire) to engage in the economic activity related to designing, construction, development, renovation, change, repair, management, usage and/or maintenance of infrastructure objects, to provide public services, manage and/or use state-owned or municipal property (including exploitation of natural resources), where the concessionaire under the concession contract assumes all or the major part of the operating risk and undertakes the relevant rights and duties and the consideration for such activity consists only of the authorization to carry out such activity and income from it or the consideration for such activity and income from it plus the payment payable by the awarding authority according to the risk assumed by the latter.
  2. government and private bodies partnership* (in accordance with the Law on Investments) - when a private body under the conditions established by the Partnership Agreement between government and private bodies invests into the activity areas attributed to the functions of the government sector bodies and into the State or municipal assets necessary for carrying out this activities, as well as it performs the assigned activities, for which the private body gets his incomes (the consideration) from the government sector bodies.
  3. establishment of mixed capital enterprises (in accordance with the Law on Management, Usage and Disposal of State and Municipal Property) – when for the purpose to carry out the particular activity a mixed capital legal entity is established and state-owned or municipal property is invested as a public sector contribution to the property of the joint venture.
Last updated: 21 04 2020