10. Infrastructure and public private partnerships

General

Over the last decades, infrastructure and PPP projects have been of great interest to both the public sector and private investors.
However, the country is now facing multiple challenges because of the imposed sanctions, which have a substantial impact on investment activity.
The current trends in the PPP market in Russia are as follows:
· A slowdown of investments because of uncertainty in the economy;
· An increase in projects’ vulnerability due to currency volatility, sanctions, inflation risks and other macroeconomic shocks;
· An increase in fiscal risks because of contingent liabilities associated with supporting PPPs;
· A shift in the Government’s focus in favour of supporting other sectors of the economy, except for the social and health sectors.
As of 1 January 2026, there are approximately 3,500 PPP projects in Russia in various forms and at different stages of implementation. The total volume of attracted investments is RUB 7.7trn, of which RUB 5.6trn are funds of private investors. In 2025, 966 PPP projects went through the stage of commercial closure.
Transport remains the most capital-intensive sector of infrastructure, attracting 64% of the total investments. The second place is taken by the communal and energy sector (20%). Social sector attracts 14% of investments.
High profile projects like the Togliatti By-Pass, including a bridge crossing over the Volga River, as part of the “Europe–Western China” international transport route, the “Alekseevskoye–Almetyevsk” Road, forming part of the “Shali (M-7)–Bavly (M-5)” Toll Motorway, the “TsKAD” (Central Ring Road) around Moscow, the Western High-Speed Diameter (one of the largest PPP projects in Europe), a digital marking and traceability system for the circulation of goods projects have been successfully implemented and have already been operating well for a few years.
But the large number of new PPP projects has not come without shortfalls. The implementation of many PPPs has become at risk due to an overall slowdown in economic activity, sanctions, currency volatility and other negative circumstances.
It is also worth mentioning that there is a local dualistic trend in the nature of PPP projects. On the one hand, most of the high-profile deals that involve a significant amount of investment are tailor-made to the needs of a particular project, well prepared by teams of qualified specialists and involve very competent investors, contractors and representatives of authorities. On the other hand, regional and especially municipal projects are much less sophisticated. And this results in lower quality and moderate outcomes of such projects, and also makes the benefits of PPPs less obvious for regional and local authorities.
At the same time, growing volumes of mid-market and small PPP projects, especially in communal services, motivate some investors to develop standard-form documents to increase the average quality of projects and make them a standard financial service ready for replication.
The PPP market is currently undergoing a qualitative transformation. The focus is shifting from the number of projects launched to their quality, efficiency and sustainability. Improving the quality of project assessment and monitoring is one of the strategic priorities.
The adoption of a law on PPP in July 2015, which had been debated for several years, was a significant milestone in the development of the PPP legal framework in Russia. The first PPP projects within the framework of the PPP law were successfully launched in 2018.
Russian federal and regional authorities alike are becoming increasingly engaged in the development of PPPs. At the federal level, the Ministry of Economic Development is the government body responsible for PPP policy in Russia. This ministry has an expert council on the development of PPP. Several federal ministries also manage PPP councils, including the Ministry of Culture, the Ministry of Public Health and the Ministry of Sport.
The trend over recent years shows that Russian authorities view the PPP sector as a leading tool for infrastructure development and for attracting private (both domestic and foreign) investment. Even though some regional authorities with little experience in the PPPs remain sceptical, the federal Government is actively advocating this instrument, including situations in which the Government declines to provide co-financing for regional infrastructure, unless it is a PPP.

Key PPP legislation

PPP projects are regulated by:
· The PPP Law;
· The Concession Law;
· The Civil Code;
· The Land Code and laws regulating land;
· The Town Planning Code and laws regulating construction activity;
· The Budget Code and associated regulations; and
· Laws and decrees regulating specific industries.

PPP Law

Generally, the PPP Law is aimed at unifying the principles regulating PPPs, defining the powers of public authorities when entering into partnerships with the private sector and specifying the procedures for entering into PPP arrangements.
In particular, the PPP Law includes the following provisions that help define, characterise and regulate PPPs:
· While the PPP Law does not set out an exhaustive list of forms for implementing PPP projects, it nevertheless allows for private ownership over the infrastructure facilities (thus enabling BOO, BOOT and other standard PPP models based on private ownership). This is in contrast to the Concession Law which requires the state to retain ownership over the infrastructure facilities.
· PPP is defined as the cooperation of a public partner (the Russian Federation, a region or a municipal authority) and a private partner (a Russian legal entity) on the basis of a PPP agreement entered into pursuant to a tender procedure and aimed at increasing the quality and availability of public services by attracting private investment.
· A PPP project may be initiated either by the public or the private partner; thus providing investors with a right to enter into a PPP agreement through a non-tender private initiative procedure.
· Major Russian state-controlled PPP market players (such as state banks VEB.RF, Sberbank, VTB, Gazprombank and state investment funds such as the Russian Direct Investment Fund) are expressly prohibited from controlling more than 50% in a private partner. As a result, they will need to enter in consortia with private entities, including foreign investors, to finance PPP projects under the PPP Law.
· A PPP agreement is to be signed for a minimum of three years.
· PPP agreements regulated by the PPP Law are distinct from concession agreements, which are implemented on the basis of the Concession Law. And the PPP Law does not apply to concession agreements.
· The list of objects under PPP agreements (the “Objects”) is exhaustive and includes, in particular, private roads, bridges, roadside utilities, transport infrastructure and relevant public transportation (excluding metros), railways, pipelines, sea and river ports, airports, electricity generation plants, public health facilities, social infrastructure, agricultural and industrial facilities, IT facilities, data processing centres and space infrastructure facilities. Any infrastructure that cannot be held in private ownership according to Russian law is excluded from the scope of regulation of the PPP Law and may only be subject to a concession agreement.
· Under a PPP agreement, the private partner must (re)construct the Object, fully or partially finance such (re)construction as well as operate and/or maintain the Object. The private partner may also be required to prepare the design documentation, and fully or partially finance the operation and/or maintenance of the Object.
· As a general rule, the private partner remains the owner of the Object after the PPP agreement expires provided, however, that the amount of financing contributed by the private partner exceeds the financing of the public partner.
· If, during the effective term of a PPP agreement, the applicable federal, regional and/or local laws and regulations are amended and this adversely affects the private partner, then the parties must review the provisions of the PPP agreement to restore the economic balance initially envisaged by the parties, as well as the property and financial interests of the private partner.
· The PPP Law allows including in the PPP agreement a provision under which the public partner alienates to the private partner the exclusive right to the results of intellectual activity in relation to existing IT objects that are subject to modification and relate to the Object.
The PPP Law also generally defines such matters as the preparation of the PPP agreement, the content of the tender documentation, the tender procedures and control over the implementation of PPP projects.

Concession Law

The Concession Law applies to certain types of infrastructure such as roads and roadside utilities, pipelines, sea and river ports, airports, public utilities, railways, metros, and other public transportation and public health facilities.
The Concession Law sets out the general rules for entering into concession agreements, including the tendering rules and the material terms that these agreements must include.
In particular, under the Concession Law it is possible for an investor to initiate a concession project and enter into a concession agreement without a tender through a private finance initiative. The grounds on which the grantor may decline the offer of an investor to enter into a concession agreement are limited by law.
However, the Concession Law provides that a concession agreement can be concluded out of tender only if there are no applicants other than the investor.
Under the Concession Law, a change of concessionaire is permitted before the conceded object is commissioned, subject to the grantor’s consent.

Financing

The state corporation VEB.RF is the Russian development bank primarily responsible for developing and funding PPP projects in Russia. VEB.RF provides financing for projects deemed to be of primary importance to the Russian Government and which are carried out on a PPP basis. There are a variety of methods which allow VEB.RF to participate in infrastructure projects, such as providing guarantees, suretyships and loans, and also through equity finance.
Investment and commercial banks involved in PPP projects remain Russian for the most part, with Sberbank, VTB and Gazprombank (all of which are state-owned) leading the way, together with Russian pension funds, such as Leader. However, the PPP Law (which prohibits state-controlled entities from having more than 50% control over a private partner) requires these major state-owned players to enter in consortia with private investors to implement PPP projects. This development is expected to benefit private investors in Russian infrastructure in view of the stable market position and resources of these major players. Unlike PPPs, concessions are not affected by such restriction, so far.

Prospects for infrastructure projects

Russian federal and regional authorities have recognised the need to develop infrastructure projects on a PPP basis. These authorities have already taken some positive steps to create the legal framework necessary to attract both foreign and domestic investors to this type of projects, such as the adoption of the PPP Law and amendments to the Concession Law enabling private finance initiatives. These factors will likely help support current initiatives and possibly create new opportunities in the Russian infrastructure market.