PUBLIC – PRIVATE ASSOCIATIONS PANAMA.

On September 19th, 2019, the Republic of Panama approved a law for the development of infrastructure and public service supplies through the union of a private company and a governmental or semi-governmental institution under the name of PPA.

The PPA concept seeks to merge private capital investment, experience, knowledge, equipment, technology and technical capacities, distributing risks and resources into the design, repairing, construction, expansion, financing, exploitation, operation, maintenance and / or supply of a goods or services by contracting with a public entity and / or the end users of some public goods or services.

IMPORTANT ASPECTS:

• In a PPA, the contractor assumes all or part of the financing and also assumes project risks.

• Financing sources refer to local banks or located in the jurisdiction of the private entity, the stock market, financial entities, among others.

• Two types of commitments may be generated: contingent commitments or firm commitments, the first related to payment to the Private Association when the risks contemplated in the contract occur and the second related to paying for the investment or maintenance expense, which can be fixed or variable.

• PPA can be self-financed or co-financed.

• PPA contracts must be at least 15,000,000 US$.