investlithuania.com

PPP in LithuaniaOverview of PPP Climate & Opportunities

April, 2018

Lithuania: Facts and FiguresCountry Information

1 Statistics Lithuania, 20182 European Commission, February 20183 Currently in negotiations with OECD

4 The Global Competitiveness Report 2017–2018 | World Economic Forum5 Doing Business Report 2018 | World Bank6 Economic Freedom index 2018 | Heritage Foundation

From command economy to free market in 20 years

AA3A-

no. of procedures to start business44

#19 freest economyin the World6

#12 for getting construction permits5

Real GDP growth2

Membership

Profit tax

Credit Ratings2

Population1

Dominant foreignlanguages

Currency

Official language

Capital

2.80 million

Vilnius

Lithuanian

English, Russian, German,Polish

Euro

S&PMoody’sFitch

15%

2.3% - 20163.8% - 2017f

2.9% - 2018f

2

NATOEUOECD in 20183

Experienced and competentcentralized support structures

Developed public sector skillsand expertise in PPPsPositive political outlook

Highly compliant legal framework

Track record on PPP projects

PPP in LithuaniaGeneral Environment

3

PPP in LithuaniaThe World Bank’s global PPP procurement benchmark

1 Rankings are shared with some other countries that score the same amountSource: http://bpp.worldbank.org/data/exploreindicators/PPP-procurement

• 1st For procurement of PPPs

• 3rd For preparation of PPPs

• 8th For unsolicited Proposals

• 16th For PPP Contract Management

Lithuania ranks: 1

4

0 100

0 100

0 100

0 100

92

95

58

70

PPP in LithuaniaAmong Leaders in Eastern Europe & CIS

1 Evaluating the environment for public-private partnerships in Eastern Europe and the Commonwealth of Independent States, The Economist Intelligence Unit, 2013

• 1st For the comprehensiveness of PPP regulatory framework

• 2nd For PPP environment in general

• 3rd For clearly defined institutional framework

Regulatory framework

Institutionalframework

Operationalmaturity

Investment climate

Financialfacilities

Sub-nationaladjustment

Lithuanian PPP system ranking vs EE & CIS average1

• Lithuania• EE & CIS average

0

20

40

60

80

100

Lithuania ranks:

5

PPP in LithuaniaAvailable Partnership Schemes

6

ConcessionPrivatefinanceinitiative

(PFI)

ContractualPPP

Mixedcompany

InstitutionalPPP

PPP

Russia

Czech RepublicSlovakia

Moldova

Hungary

Latvia

Belarus

Ukraine

Estonia

Poland

Lithuania

BosniaandHerzegovina

Bulgaria

Romania

Serbia

Croatia

AlbaniaTurkey• High Compliance/Effectiveness

• Medium Compliance/Effectiveness

• Low Compliance/Effectiveness

1 EBRD, 2011

PPP in LithuaniaLegal Framework

• Concession Law

• Investment Law

• Law on State and Municipal Property

• Public Procurement Law

• Government Guidelines on PPP

EBRD Concessions SectorAssessment in CEE1

7

PPP in LithuaniaEligible Sectors

Additional sectors (on governmental approval)

Public order and security

Education

Tourism and leisure

Telecommunications

Energy

Railway network

Transport infrastructure

Waste management

Health care

8

PPP in LithuaniaDecision-making Process

1 Through the Ministry of Finance2

Required if State liabilities are above 58 M EUR 9

1QY1 2QY1 3QY1 4QY1 1QY2 2QY2 3QY2 4QY2 1QY3

Central ProjectManagement

Agency

Central ProjectManagement

Agency

Ministry of FinancePPP Commission1

Government

Parliament2

Contract Award

Governmental PPPs

Investment Project and PPP Questionnaire

Approval Process Selection of Consultants

Procurement Documentation

Procurement Process

*Only if conditions differ from the Council's initial decision

10

PPP in LithuaniaDecision-making Process

1QY1 2QY1 3QY1 4QY1 1QY2 2QY2 3QY2 4QY2

Central ProjectManagement

Agency

Central ProjectManagement

Agency

Municipal Council

Municipal Controller

Contract Award

Municipal PPPs

Municipal Controller*

Municipal Council*

Ministry of Finance

Investment Project and PPP Questionnaire

Approval Process

Selection of Consultants

Procurement Documentation

Procurement Process

PPP in LithuaniaProcurement Process

11

90 da

ys

120 d

ays

30 da

ys

70 da

ys

20 da

ys

85 da

ys

85 da

ys

5 day

s

35 da

ys

60 da

ys

120 d

ays

720 days

Pre-Qualification

Initial tender submission

Initial tender evaluation

Detailed tender submission

Detailed tender evaluation

Negotiations

Tender documents revision by the Ministry of Finance

The completion of negotiations

Final tender submission and evaluation

Signing of contract

The fulfilment of the conditions precedent

12

34

56

78

910

11

PPP in LithuaniaUnsolicited Proposals

12

Unsolicited proposals• completely new, or• identified but has no feasibility study prepared

Project initiation form

Granting authority Project implementation• feasibility study• tendering procedures

If approved*

* If project is declined:Official response explaining grounds for the decision

PPP in LithuaniaTrack Record

1 Number of all ever signed PPPs in Lithuania2 Ministry of Finance, June 2017

• 53 PPPs1

• 50 Concessions

• 3 PFIs

• Majority service concessions

• Mainly municipally owned

• Blended with EU structural funds

Private sector participation by sectors2

13

Transportinfrastructure

Culture, sports andleisure infrastructure

Number ofcontracts

13

10

Energysector

8

Education

1Public service and security

1

Other20

PPP in LithuaniaNotable signed projects

Project Scope Vilnius Balsiai school

DBFM

Vilnius City Municipality

25 years

1,050 students

EUR 10 M

Operational since 2011

Palanga bypass

DBFM

Lithuanian Road Administration

25 years

8.25 km

EUR 10 M

Operational since 2015

Vilnius police station and custody suite

DBFM

Police Department

18 years

8,665 m2

EUR 9 M

Construction

Vilnius (Santariskes) medical campus parking infrastructure

Concession

The Ministry of Health

25 years

Up to 2,250 parking places

EUR 14 M

Construction

Type of PPP

Project Owner

Project Term

Key Parameters

Capex

Project Status

14

PPP in LithuaniaProjects in Tender

Project Scope

Type of PPP

Project Owner

Project Term

Key Parameters

Vilnius multifunctional complex

Concession

Vilnius City Municipality and Department of Physical Education and Sports

Up to 25 years

At least 15,000 seats

Evaluation of preliminary bids

15

Kaunas Police headquarters

DBFM

Police Department of Lithuania

15 years

• 5,080 sq.m. administrative building• 1,180 sq.m. additional premises

Preliminary bids

Panevėžys Police headquarters and custody suite

DBFM

Police Department of Lithuania

15 years

• 8,000 sq.m. administrativebuilding and custody• 884 sq.m. garage• 2,700 sq.m. secured car parking

Preliminary bidsProject Status

16

PPP in LithuaniaInvestment Opportunities

Project Scope

16

Type of PPP

Project Owner

Project Term

Key Parameters

Capex

Project Status

Lithuanian airports development

Concession

Ministry of Transport and Communications

25 years (TBC*)

• VNO – 3.80 M PAX1

• KUN – 0.74 M PAX1

• PLQ – 0.23 M PAX1

14% avg. passenger growth in the network (in 2016)

EUR 200 M - 300 M

Analysis of project alternatives

Vilnius multifunctional health center

Concession

Vilnius City Municipality

To be confirmed

50m and 25m length swimming pools

Operational contract

Preparation of tender documents

TBC - to be confirmed

We are a government agency that providesfree investment advice, contacts and data.

Invest Lithuania activities within PPP:

• Consults public sector on project preparation

• Advises investors on project participation

• Guides foreign companies through the process of setting up in Lithuania

About Invest Lithuania

17

tadas.jagminas@investlithuania.com

Tadas JagminasDirector

dainius.normantas@investlithuania.com

Dainius NormantasAnalyst

juste.marcinkeviciute@investlithuania.com

Juste MarcinkeviciuteSenior Project Manager

Contact Us

17

Project Management Department at Invest Lithuania

+370 5 262 7438

+370 5 204 7812 +370 5 204 7811