Overview
North Macedonia has adopted significant amendments to the Law on Concessions and Public-Private Partnership, introducing new mechanisms designed to increase private sector participation and investment in public infrastructure and services, bringing the country’s public-private partnership (“PPP”) regime closer to international standards.
Key Innovations
The reforms introduce two key innovations to North Macedonia’s PPP framework:
- institutional public-private partnerships (“Institutional PPPs”) as a new form of partnership structure; and
- a formal legal regime for unsolicited proposals submitted by private investors (“Unsolicited Proposals”).
Institutional PPPs
With the new amendments, PPPs may now be established either through traditional contractual arrangements or through Institutional PPPs, allowing public and private partners to jointly establish and invest in a special purpose vehicle (“SPV”) responsible for implementing a project. Tender documentation and draft incorporation agreements must define the ownership structure, capital contributions, governance rights, financing arrangements, and the level of public participation and support in the SPV.
Unsolicited Proposals
A major feature of the reform is the introduction of Unsolicited Proposals, allowing private companies, investors, and consortia to independently propose public infrastructure or service projects to government institutions. To qualify, a proposal must include key project information, including the nature of the project, infrastructure and services to be developed, feasibility analysis, and alignment with the public interest, supported by a feasibility study.
However, Unsolicited Proposals cannot relate to projects already included in a public authority’s programme or strategic documents, projects already prepared by a public authority, or projects for which a PPP procedure has already begun.
Preferential Matching Right and Cost Reimbursement
Importantly, the amendments introduce a preferential matching right for private initiators. If another bidder submits the best offer in a subsequent tender, the original initiator may match that offer and secure the contract under the same terms. Additionally, North Macedonia has also introduced a cost reimbursement mechanism. Where the initiator is unsuccessful, the winning bidder must reimburse reasonable and documented project preparation costs; however, where the initiator wins by exercising its matching right, it must compensate the bidder that submitted the initial best offer.
Outlook
The amendments bring North Macedonia’s PPP framework closer to international practice and are expected to encourage greater private participation in infrastructure, public services, and strategic investment projects, signalling the country’s commitment to creating a more investor-friendly environment for projects of public interest.
FAQ
What prompted North Macedonia to amend its PPP law?
The reforms aim to increase private sector participation in public infrastructure and align North Macedonia’s PPP framework with international standards.
What is an Institutional PPP?
A model allowing public and private partners to jointly establish a special purpose vehicle (SPV) to implement a project, as an alternative to traditional contractual PPP arrangements.
What is an Unsolicited Proposal?
An initiative through which a private company, investor, or consortium independently proposes a public infrastructure or service project to a government institution, supported by a feasibility study.
Are there restrictions on Unsolicited Proposals?
Yes. A proposal cannot relate to projects already included in public programmes or strategic documents, already prepared by a public authority, or for which a PPP procedure has already begun.
What is the preferential matching right?
If another bidder wins a subsequent tender, the original initiator may match the winning offer and secure the contract on the same terms.
How are project preparation costs handled?
If the initiator loses, the winning bidder reimburses their documented preparation costs. If the initiator wins via the matching right, it compensates the bidder who submitted the best offer.
The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.
