- Ukraine Adopts New Law on Public-Private Partnerships to Drive Postwar Reconstruction
- NBU Keeps Key Interest Rate at 15.5% to Curb Inflation Risks
- NBU Clarifies Prudential Requirements for Nonbank Payment Service Providers
Ukraine Adopts New Law on Public-Private Partnerships to Drive Postwar Reconstruction
On October 31, 2025, Ukraine’s new Law No. 4510-IX “On Public-Private Partnership” (based on draft bill No. 7508) came into force, introducing a modernized framework for cooperation between the state and private sector. The reform aims to simplify the preparation and implementation of PPP projects, particularly those vital for rebuilding war-damaged infrastructure and constructing new facilities in the postwar recovery phase.
Key innovations include:
- Launching an EU-standard electronic procurement system for PPP projects;
- Introducing a budget-based payment model, where the state pays for infrastructure in installments instead of transferring demand risk to the investor;
- Streamlining approval procedures for PPPs, especially small-scale projects (under €5.3 million) and those tied to recovery and reconstruction;
- Simplifying project preparation at both national and local levels.
According to Dmytro Natalukha, Chair of the Parliamentary Committee on Economic Development, the law is about “returning Ukrainians to a normal quality of life.” It sets a clear, transparent, and investment-friendly framework to attract private capital and international grants into rebuilding critical public assets—such as roads, bridges, hospitals, schools, housing, and utilities—many of which were destroyed or damaged by Russia’s war.
The new law also harmonizes Ukrainian PPP regulations with EU standards, aligns them with concession legislation, and enables the use of external donor funding, particularly for projects in liberated or heavily affected regions.
NBU Keeps Key Interest Rate at 15.5% to Curb Inflation Risks
The National Bank of Ukraine (NBU) has decided to maintain its key policy rate at 15.5%, citing persistent inflationary pressures and the need to safeguard the stability of the hryvnia.
Although consumer inflation slowed to 11.9% year-on-year in September, with a continued decline in October, core inflation eased more modestly to 11.0%. The NBU notes that underlying price pressures remain high, driven by elevated business costs for energy and labor.
The central bank projects inflation will gradually fall to 9.2% in 2025, 6.6% in 2026, and reach the target level of 5% by late 2027. This disinflation will be supported by better harvests and increased investment in reconstruction and defense projects, though higher energy costs and regulated prices could temper the pace of improvement.
International financing continues to play a critical role in stabilizing the economy. Between August and October, Ukraine received over $13 billion in external funds, with an additional $15 billion expected by year’s end — enabling the government to cover its budget deficit without resorting to monetary emission.
According to the NBU’s macroeconomic forecast, a rate cut may begin in Q1 2026, provided inflation risks subside. However, the central bank remains ready to postpone easing if new pro-inflationary factors emerge.
NBU Clarifies Prudential Requirements for Nonbank Payment Service Providers
The National Bank of Ukraine (NBU) has issued an explanatory letter dated October 24, 2025 (No. 33-0005/81819), addressing multiple inquiries from nonbank payment service providers regarding the application of prudential standards set by the Regulation on Regulatory Capital Requirements.
The letter provides key clarifications in three main areas:
- Calculation of Payment Transaction Volume.
When determining the total annual volume of payment transactions, providers must include all accepted and executed payments — whether both initiated and completed within one provider or between different providers. This ensures accurate calculation of the average monthly transaction volume based on prior year accounting data. - Inclusion of Financial Assistance in Tier 1 Capital.
Only non-repayable financial assistance from an owner may be counted as profit and included in Tier 1 capital. Funds received as repayable assistance (essentially interest-free loans) cannot be treated as profit due to the borrower’s repayment obligation under civil law. - Auditor Review of Interim Financial Statements.
The Regulation does not require mandatory interim reviews. However, if a provider wishes to include current-year interim profits in Tier 1 capital before the annual audit, such profits can be recognized only after an independent auditor’s review report has been prepared.
This clarification reinforces regulatory consistency, ensuring that capital calculations and reporting standards remain transparent and aligned with NBU prudential oversight principles.
