Ministry of Finance issues decree to regulate public-private partnership projects

The Ministry of Finance has issued a decree to regulate public-private partnerships in the UAE, a move aimed at boosting private sector investment in federal government projects.

The Federal Decree Law No 12 of 2023 applies to any partnership project that is proposed by a federal entity and wholly or partially funded by the private sector, the ministry said. The law came into force last month.

“The law aims to encourage the private sector to participate in developmental and strategic projects, increase investment in federal government projects of social and economic value, and enable the government to efficiently implement strategic projects,” the ministry said.

The government also hopes to benefit from financial and administrative expertise, technical knowledge and technology solutions available to the private sector, it added.

Other objectives include hastening efforts to put in place projects that will offer “an added value for public funds”, as well as “minimise financial and operational risks on the government”.

Transforming the management of some infrastructure projects and public services and enhancing the competitiveness of projects in local, regional and global markets also form part of the new law.

The new regulation also specifies exemptions. These include partnership contracts that were entered into before the law’s enforcement date, the ministry said.

Other exemptions include projects whose value is less than the limit specified in the Partnership Projects Manual, public asset and service privatisation projects, as well as supply and procurement contracts related to national security specified in the manual.

It also extends to federal entities, sectors and projects that are exempt under UAE Cabinet decisions.

The new law “will provide the certainty and guidance to all federal entities as to what process they need to follow and what legal requirements they have to meet when developing successful PPP [public private partnership] projects”, said Alexander Sarac, partner of infrastructure projects and energy at international law firm Addleshaw Goddard.

“This certainty and comfort will encourage a wide range of ministries and government entities to explore this sector and PPP opportunities with more confidence and pace,” he said.