The EBRD has worked extensively with the Lithuanian government and a team of consultants to prepare a new concession law that should attract private investors to the country’s public sector. The law, published this month and taking effect October 1, is an extensive revision of the 1996 concession law.

Lithuania has had a concessions legal framework in place for eight years, yet not a single concession has been granted. The authorities requested the EBRD’s assistance to make the law workable and attractive to the private sector.

Michel Nussbaumer, head of the EBRD’s Legal Transition and Knowledge Management Team, says the bank reviewed the current law, diagnosed the obstacles and then recommended amendments. As a result, the law now provides for a much more flexible regime for BOT (build operate transfer) and similar arrangements, he adds.

Under the new law any investor, domestic or foreign, may become a concessionaire. The law contains a list of activities and sectors where concessions are envisaged, and regulates concession-awarding procedures with or without tenders. The law also takes into account internationally accepted standards, particularly the Uncitral legislative guide on privately financed infrastructure projects, which was developed with the EBRD’s participation.

A stream of investors in <

  • xml:namespace prefix = st1 />Lithuania is looking at concession as a potential route of project development. With this new law, the EBRD hopes that investors and local authorities will have a wider range of instruments to promote private-sector involvement in public projects, in particular infrastructure and municipal projects. Concessions are viewed as a mechanism for alternative finance, putting less of a burden on public budgets.  They also help attract modern technologies and private-sector efficiency.