LAW

OF THE REPUBLIC OF ARMENIA

Adopted on 28 June 2019

CHAPTER 1

GENERAL PROVISIONS

1. This Law shall define the legal framework for regulation of public-private partnership (hereinafter also referred to as ''PPP''), including the rules and procedures related to the development and implementation of public-private partnership projects (hereinafter also referred to as ''PPP projects”), the institutional framework for governance, applicable criteria, the private partner selection procedure and other issues related to the PPPs.

(Article 1 supplemented by HO-284-N of 30 June 2021)

(Law HO-284-N of 30 June 2021 has a transitional provision)

1. The following main concepts shall be used in this Law:

(1) result-based payments — payments being made to a private partner by customers and/or a public partner for the goods sold and services rendered by a private partner;

(2) Net Present Value (NPV) — the difference between the present values of cash inflows and cash outflows over the period of implementation of the project being assessed, and the discount rate used during the calculation of the difference shall be determined under the PPP procedure;

(3) competent authority — the Government, a body of state administration system, which develops and implements a policy in a certain field of state administration, a local self-government body of the Republic of Armenia;

(4) authorised body — a body of state administration system which develops and implements the policy of the Government in the field of public finance management;

(5) applicant — a legal person or a consortium of legal persons that participate in a private partner selection procedure for the purpose of becoming a private partner and concluding a contract with a public partner. Moreover, a company with direct or indirect equity participation of the Republic of Armenia or a community or a company, wherein the Republic of Armenia or a community may otherwise, i.e. in another manner not prohibited by law, predetermine decisions of the company, or a consortium with participation of the above-mentioned company may not be an applicant;

(6) public partner — a competent authority which concludes a PPP contract with an applicant successful in a private partner selection procedure;

(7) public infrastructure — a fixed asset of public interest or benefit (including buildings, structures, equipment) and/or intangible asset, which is used for rendering public services (or with regard thereto), and the operation and/or construction and/or the improvement and/or the technical maintenance whereof shall ensure a private partner pursuant to a PPP contract;

(8) public service — an activity arising from public interest, which is usually carried out by state bodies and/or on behalf of the latter and/or for which the state body bears the main responsibility, as well as any service or activity of the regulated sector of the public services, within the meaning of the Law ''On Public Services Regulatory Authority";

(9) availability payments — regular payments being made by a public partner to a private partner, which are based on the accessibility of the public infrastructure complying with the Key Performance Indicators as prescribed under a PPP contract;

(10) private partner — a private legal person established and operating pursuant to the legislation of the Republic of Armenia, with which a public partner has concluded a PPP contract, or which shall subtitute the legal person that is a party to a contract, as provided for by Article 21 of this Law;

(11) public-private partnership unit or PPP unit — an entity prescribed by the Government, which exercises the powers reserved thereto under this Law;

(12) PPP — a public-private partnership;

(13) PPP project — a project targeted at construction and/or improvement and/or operation and/or technical maintenance of a public infrastructure with participation of a private sector, the risks whereof are allocated among the public partner and the private sector, and which has at least five years duration, which is calculated from the day of fulfilment of all conditions precedent necessary for the entry into force of a PPP contract;

(14) PPP procedure — procedures and rules applicable to the implementation of PPP projects, which are prescribed upon the decision of the Government;

(15) PPP contract — a contract, including a concession contract concluded between a public partner and a private partner for implementation of a PPP project, as prescribed by this Law;

(16) permissible limit of PPP contingent liabilities — a maximum limit of contingent liabilities of the Republic of Armenia with respect to the PPP contracts concluded after the entry into force of this Law. The methodology for calculation and assessment of contingent liabilities of the Republic of Armenia shall be prescribed by the Government;

(16.1) permissible limit of PPP direct liabilities — an annual limit of direct liabilities of the Republic of Armenia, prescribed by the Government with respect to the PPP contracts concluded after the entry into force of this Law;

(17) consortium — applicant legal persons, which participate in a private partner selection procedure on a basis of joint activities;

(18) lender — a private financial organisation, which extends a loan to a private partner with respect to a PPP contract;

(19) end users — any natural or legal person, including users, buyers, consumers, to whom a private partner renders public services or supplies goods of public interest or benefit, subject to the conditions of a PPP contract;

(20) Economic Internal Rate of Return (EIRR) — a metric used for economic planning in order to assess the net benefits for the public derived from potential investments. The Economic Internal Rate of Return is the discount rate, in case of which the Net Present Value of all economic benefits and costs from the assessed project is equal to zero;

(21) Financial Internal Rate of Return (FIRR) — a metric used for capital budgeting in order to assess the profitability of potential investments. Financial Internal Rate of Return is the discount rate, in case of which the Net Present Value of net cash flows from financial revenues and costs of the assessed project is equal to zero;

(22) direct agreement — an agreement concluded between a public partner, a private partner and a lender (lenders), which prescribes the conditions, based on which the lenders may be entitled to exercise the step-in rights;

(23) value for money or VfM — the difference between the value of the best similar project implemented through a general procedure provided for by the legislation of the Republic of Armenia ensuring a similar or comparable public infrastructure or public service, and the costs for implementation of assessed projects, and the methodology for calculation of which is prescribed under the PPP procedure;

(24) private partner selection procedure — entirety of actions aimed at implementing the procedures, exercising rights and responsibilities provided for by the legislation of the Republic of Armenia on PPP for the purpose of making a selection of a private partner;

(24.1) Request for Qualification (RFQ) — qualification criteria and conditions offered to the applicant for the purpose of being qualified under the private partner selection procedure;

(24.2) Request for Proposal (RFP) — conditions offered to the applicant for the purpose of concluding a PPP contract;

(24.3) bid for qualification — a proposal submitted by the applicant based on the Request for Qualification;

(24.4) bid — a proposal submitted by the applicant based on the Request for Proposal, which includes a financial proposal and/or may include a technical proposal;

(24.5) bid security (security of bid for qualification) — a means securing fulfilment of the obligations assumed under the bid (bid for qualification) in the stage of the Request for Proposal;

(24.6) contract security — a means securing fulfilment of the obligations assumed under a PPP contract, which is provided for by a decision of the Government on implementation of the PPP project, by invitation and the PPP contract;

(24.7) quality and value-based selection — an evaluation method used in the stage of the Request for Proposal, in which case technical and financial proposals are concurrently evaluated in accordance with the weights provided for by the Request for Proposal;

(24.8) value-based selection — an evaluation method used in the stage of the Request for Proposal, in which case the applicant having submitted the best financial proposal complying with the technical criteria is selected;

(24.9) financial proposal — a financial, price and/or quantitative proposal in compliance with the criteria prescribed by the qualified applicant in the stage of the Request for Proposal;

(24.10) technical proposal — a proposal being submitted in compliance with the technical criteria prescribed by the qualified applicant in the stage of the Request for Proposal;

(25) (point repealed by HO-47-N of 5 March 2025 )

(26) fiscally affordable — a PPP project shall not result in exceeding the permissible limit of the PPP contingent and/or direct liabilities, where such are prescribed.

(Article 2 amended, edited, supplemented by HO-284-N of 30 June 2021, amended by HO-47-N of 5 March 2025)

(Law HO-284-N of 30 June 2021 has a transitional provision)

1. The objectives of PPP for ensuring and managing public infrastructure and public service shall include:

(1) reducing the costs needed during the life cycle of the public infrastructures and improving the quality of building, improvement, construction, operation and maintenance thereof;

(2) ensuring proper and timely maintenance of the asset during the operation period thereof;

(3) increasing access to public infrastructures and services;

(4) receiving benefits from the private sector practice, resources, technologies, efficiency and innovation capacities;

(5) increasing accountability and transparency towards the public in the field of public infrastructures and public services;

(6) improving the information database on public infrastructures and public services covered by PPP projects in the Republic of Armenia;

(7) attracting investments for new public infrastructures, where necessary.

1. To render a decision by the Government on implementation of a PPP project, the PPP project needs to comply with all the criteria mentioned below:

(1) ensure allocation of risks between a public partner and a private partner, pursuant to the PPP procedure;

(2) ensure economic return for the Republic of Armenia, i.e. have Economic Internal Rate of Return, which will exceed the base rate prescribed by the PPP procedure;

(3) be assessed and selected as a project to be implemented in accordance with the procedure for identifying, developing, evaluating public investment programmes and determining priorities, and be approved by the Government;

(4) be fiscally affordable;

(5) have VfM, which is greater than zero, where applicable.

2. From the perspective of managing fiscal risks and ensuring fiscal sustainability, the authorised body may, based on the analysis conducted as prescribed by Article 11 of this Law, provide a negative opinion, where the calculations reveal that the sum total of the PPP contingent and/or direct liabilities for each year — with regard to the contract to be concluded — will result in exceeding the permissible limits of the PPP contingent and/or direct liabilities during any year of the implementation period of the contract.

3․ For determining whether the permissible limit of the PPP contingent and/or direct liabilities will be exceeded, the following shall be taken into consideration:

(1) the PPP projects being implemented pursuant to PPP contracts concluded following the entry into legal force of this Law;

(2) the PPP projects following the entry into legal force of this Law, for which a decision on holding private partner selection procedure has been adopted.

(Article 4 edited by HO-284-N of 30 June 2021)

(Law HO-284-N of 30 June 2021 has a transitional provision)

1. The decision of the Government shall define the sectors of public services being rendered within the scope of PPP projects.

(Article 5 edited by HO-284-N of 30 June 2021)

(Law HO-284-N of 30 June 2021 has a transitional provision)

(Article repealed by HO-47-N of 5 March 2025)

1. The authorised body in the PPP sector shall:

(1) carry out activities for development of a PPP policy;

(2) perform the functions of promotion and dissemination of PPP projects;

(3) ensure the development of regulatory legal acts related to the PPP procedure;

(4) exercise supervision over the fulfilment of financial liabilities prescribed under a PPP contract;

(5) subject PPP projects to current monitoring in terms of contingent and direct liabilities;

(6) conduct an analysis provided for by Article 11 of this Law;

(7) deliver opinion provided for by Article 11 of this Law;

(8) exercise other powers prescribed by this Law.

(Article 7 supplemented by HO-284-N of 30 June 2021, edited by HO-47-N of 5 March 2025)

(Law HO-284-N of 30 June 2021 has a transitional provision)

1. The PPP unit shall:

(1) provide the public partners and competent authorities — in the sector of preparation and implementation of PPP projects — with administrative, methodological, expert, consultation, technical and other types of assistance;

(2) organise training courses for the public partners and competent authorities, and other events aimed at enhancing their capacities;

(2.1) submit to the authorised body proposals for improvement of the legislation regulating the PPP sector;

(2.2) provide the Government, as provided for by the PPP procedure, with an opinion on compliance of the processes of preparation and implementation of a PPP project with this Law and the PPP procedure;

(2.3) maintain the database of PPP projects;

(2.4) (point repealed by HO-47-N of 5 March 2025)

(3) exercise other powers prescribed by this Law.

(Article 8 supplemented by HO-284-N of 30 June 2021, amended by HO-47-N of 5 March 2025)

(Law HO-284-N of 30 June 2021 has a transitional provision)

1. The competent authority shall:

(1) identify PPP projects and prepare draft PPP projects;

(2) submit to the Government draft decisions on preparation of a draft PPP project, amendment to PPP project being implemented and extension of a PPP contract;

(3) organise the private partner selection procedure;

(4) conclude a PPP contract with an applicant successful in a private partner selection procedure;

(5) monitor and maintain supervision over a PPP project.

(Article 9 amended, edited by HO-284-N of 30 June 2021)

(Law HO-284-N of 30 June 2021 has a transitional provision)

1. PPP projects may be prepared by the competent authority in the format of a draft PPP project.

2. The competent authority shall identify PPP projects and prepare draft PPP projects in accordance with the criteria and principles provided for by the PPP procedure.

3. Draft PPP projects must contain substantiation of compliance of a PPP project with the criteria provided for by part 1 of Article 4 of this Law.

4. In cases provided for by the PPP procedure, the preparation of a draft PPP project must be approved by the decision of the Government.

5. A legal person (private initiator) may, as provided for by the PPP procedure, submit to the competent body a proposal for implementation of a possible project (PPP project on private initiative) for the purpose of evaluating it as a project to be implemented in the PPP format. The regulations provided for by this Law shall apply to the PPP project on private initiative to the extent that this Law does not prescribe otherwise.

6. A proposal for a PPP project on a private initiative shall be subject to evaluation by the competent body, where:

(1) the private initiator has experience prescribed by the PPP procedure for entrepreneurial activities in the sector being a subject of proposal;

(2) the proposal includes information on the PPP project on private initiative and is accompanied by a preliminary technical and economic rationale or technical and economic study, the minimum requirements applicable whereto shall be prescribed by the PPP procedure;

(3) the minimum internal rate of financial return of the proposed PPP project on private initiative, provided for by the PPP procedure is being ensured without direct impact on the state and/or community budgets, as well as without alienation at a value lower than the market value (and in case of immovable property — at a value lower than the cadastral value) or gratuitous provision of property falling under the ownership of the State and/or a community;

(4) the private initiator has undertaken a public and irrevocable — in the manner provided for by the PPP procedure — obligation to participate in the private partner selection procedure.

7. Evaluation of the proposal of a PPP project on private initiative must at least include the following:

(1) preliminary verification of the data submitted through preliminary technical and economic rationale or technical and economic study of the PPP project on private initiative, as prescribed by the PPP procedure;

(2) compliance assessment of the proposal with the criteria provided for by part 1 of Article 4 of this Law. Compliance assessment of the proposal with the criterion provided for by point 4 of part 1 of Article 4 of this Law shall be carried out in accordance with parts 2 and 3 of Article 4 and part 1 of Article 11 of this Law, and the compliance with the criterion provided for by point 3 of part 1 of Article 4 — in accordance with the procedure approved by the Government for identifying, developing, evaluating public investment programmes and determining priorities. Moreover, during evaluation of the proposal of a PPP project on private initiative, the competent body or the authorised body may request from the private initiator additional information on the latter and the PPP project on private initiative, as well as make — on the initiative thereof — amendments and supplements in the proposal of the project.

8. Where as a result of evaluation of the proposal of the PPP project on private initiative, provided for by part 7 of this Article, it is established that the proposal does not comply with the criteria provided for by part 1 of Article 4 of this Law, it shall not be subject to implementation in the PPP format.

9. The PPP procedure may provide a procedure for reimbursement of the costs incurred by the competent body in relation to evaluation of the proposal of the PPP project on private initiative before carrying out the evaluation, as well as a procedure for application of the means of securing the obligation to participate in the private partner selection procedure by the private initiator in case that procedure is carried out.

10. As a result of evaluation of the proposal of the PPP project on private initiative, the Government may, upon recommendation of the competent body, adopt a decision provided for by part 4 of Article 10 of this Law. In such a case, the preliminary technical and economic rationale or technical and economic study to be included in the proposal of the PPP project on private initiative shall be subject to publication.

11. The decision of the Government on implementation of the PPP project may provide for any of the following privileges to be granted to the private initiator in case of participation in the private partner selection procedure:

(1) reimbursement of costs estimated by the competent body as prescribed by the PPP procedure in connection with preparation of the project by the successful applicant which is not a private initiator;

(2) the right to bring own financial proposal into compliance with the financial proposal of the applicant which is not a private initiator. Moreover, the privilege may be provided in case of simultaneous existence of all the following circumstances:

a. no provision of such public service or ensuring of public infrastructure has been carried out in the Republic of Armenia, or the volume of the envisaged project exceeds the total volume of such public services being provided and the public infrastructures being ensured in the Republic of Armenia, in monetary terms. The volume of the project, as well as the total volume of public services and public infrastructure in monetary terms referred to in this sub-point shall be determined as prescribed by the PPP procedure;

b. the private initiator has a high rating provided for by the PPP procedure in the given sector.

12. Where the proposal of the PPP project on private initiative is accompanied only by a preliminary technical and economic rationale, the latter may be granted only the privilege provided for by point 1 of part 11 of this Article.

13. The specifics of risk allocation between public and private partners within the scope of PPP projects on private initiative, as well as possible sectors for their implementation, proposals submitted beyond the scope of which shall not be subject to evaluation, irrespective of the requirements prescribed by part 6 of this Article, shall be approved under the PPP procedure.

(Article 10 amended, edited, supplemented by HO-284-N of 30 June 2021)

(Law HO-284-N of 30 June 2021 has a transitional provision)

1. A draft PPP project shall be analysed by the authorised body, after which the authorised body shall provide an opinion on the compliance of a PPP project with the criteria prescribed by point 4 of part 1 and by part 2 of Article 4 of this Law.

(Article 11 edited by HO-284-N of 30 June 2021)

(Law HO-284-N of 30 June 2021 has a transitional provision)

1. The Government shall render a decision on the implementation of a PPP project based on a draft PPP project.

2. Pursuant to the requirements of Article 16 of this Law, the draft PPP contract shall approved by the decision on implementation of a PPP project together with the provisions on the implementation of the given project.

1. The information on PPP projects, preparation and implementation thereof shall be published on the website prescribed under the PPP procedure. The Government may prescribe the requirements for such publication.

2. The information — the publication of which is restricted by laws — on PPP projects, their preparation and implementation shall not be subject to publication.

(Article 13 edited by HO-284-N of 30 June 2021)

(Law HO-284-N of 30 June 2021 has a transitional provision)

CHAPTER 3

SELECTION OF A PRIVATE PARTNER

1. The competent authority shall select a private partner in accordance with the private partner selection procedure.

(Article 14 edited by HO-284-N of 30 June 2021)

(Law HO-284-N of 30 June 2021 has a transitional provision)

Article 14.1.

Principles of the private partner selection procedure

1. The principles of the private partner selection procedure shall be as follows:

(1) organising the selection of a private partner and other processes having an impact thereon on competitive, transparent, public and non-discriminatory bases;

(2) ensuring equal opportunity for a legal person to participate in the selection process of a private partner, irrespective of the fact that the legal person is a foreign organisation;

(3) establishing flexible procedures for selection of a private partner.

(Article 14.1 supplemented by HO-284-N of 30 June 2021)

(Law HO-284-N of 30 June 2021 has a transitional provision)

Article 14.2.

Right to participate in the private partner selection procedure and qualification criteria

1. The scope of persons not entitled to participate in the private partner selection procedure shall be prescribed by the PPP procedure or other legal acts. Participation of a legal person which is a resident of any country, in the private partner selection procedure may be restricted only by a decision of the Government, where it is necessary for ensuring the national security and defence of the Republic of Armenia. The right of applicants to participate in the private partner selection procedure (legal qualification) and requirements related to the documents necessary for the certification thereof may be provided for by the PPP procedure.

2. An applicant must comply with the following qualification criteria necessary for fulfilment of the obligations provided for by the draft PPP contract and prescribed by the Request for Qualification:

(1) professional experience;

(2) technical competence and experience;

(3) financial and economic capacities.

3. No criteria related to the right to and qualification for participation in the private partner selection procedure may be prescribed, where such criteria:

(1) are not provided for by this Article;

(2) are discriminatory and unreasonably restrict competition;

(3) fail to directly derive from the necessity to fulfil the obligations provided for by the PPP contract.

4. The Request for Qualification shall define the necessary criteria and procedure for qualification of an applicant for the given private partner selection procedure and the requirements for the documents (information) necessary for qualification.

5. Concurrent participation of affiliated legal persons in the private partner selection procedure shall be prohibited, except for cases of participation as a consortium. Within the meaning of this part, two or more persons shall be deemed affiliated persons where:

(1) one of them directly or indirectly possesses — with the right to vote — 20 or more percent of equity securities carrying voting right of the other (others);

(2) more than half of the members of the board of directors of any of them, the director or other official having such competence is simultaneously a member of the board of directors of the other (others), the director or other official having such competence;

(3) one of them controls the other, or they are under a common control, or one of them has an actual opportunity or opportunity enshrined by the contract to essentially influence the decisions of the other or to predetermine them;

(4) they have been acting in agreement in the given case, based on common economic interests.

6. The procedure for participation in the private partner selection procedure as a consortium shall be established by the PPP procedure.

(Article 14.2 supplemented by HO-284-N of 30 June 2021)

(Law HO-284-N of 30 June 2021 has a transitional provision)

Article 14.3.

Consequences of unlawful actions of applicants

1. Where a prima facie unlawful act within the framework of the private partner selection procedure, committed by the applicant or representative of the management body thereof is detected, the competent body shall, on the day of emergence thereof, inform the law enforcement bodies thereof in writing.

(Article 14.3 supplemented by HO-284-N of 30 June 2021)

(Law HO-284-N of 30 June 2021 has a transitional provision)

Article 14.4.

Official language of the private partner selection procedure

1. Request for Qualification and announcement, Request for Proposal and announcement, as well as other documents provided for by the PPP procedure, with regard to the private partner selection procedure shall be drawn up and published in Armenian, English and Russian on the website defined by the PPP procedure as prescribed by this Law.

2. The official language of the private partner selection procedure shall be Armenian. In case of being prescribed by announcement on and/or invitation to the private partner selection procedure, the official language may, in addition to Armenian, also be English or Russian.

(Article 14.4 supplemented by HO-284-N of 30 June 2021)

(Law HO-284-N of 30 June 2021 has a transitional provision)

Article 14.5.

Forms of the private partner selection procedure and evaluation of the results

1․ Forms of holding the private partner selection procedure shall be open procedure and closed procedure.

2․ In case of application of the open procedure, the decision of the Government on implementation of a PPP project, the announcement on the private partner selection procedure and the Request for Qualification shall be public and accessible.

3․ Open procedure shall be carried out in the stages of the Request for Qualification and the Request for Proposal. Holding of a one-stage open procedure may be prescribed by a decision of the Government on implementation of the PPP project.

4․ In case of application of the closed procedure, the decision of the Government on implementation of the PPP project shall not be subject to publication, and the Request for Qualification shall be provided only to persons previously determined by the competent body. The closed procedure shall be carried out as prescribed by a decision of the Government on implementation of the PPP project, where the draft PPP project is directly related to the defence of the Republic of Armenia and comprises state secret.

5․ The methods of evaluation of the bid in the private partner selection procedure shall be the following:

(1) quality and value-based selection, or

(2) value-based selection.

6․ Method of evaluation of the private partner selection procedure, requirements for technical and financial proposals and, where available, the weights given thereto shall be prescribed by a decision of the Government on implementation of the PPP project.

7․ The procedure for recording of the process of the private partner selection procedure, including of the sessions of the evaluation commission, for the preparation and submission of reports on declaring the session as not having taken place and for evaluation of the results, the requirements for formation of the evaluation commission, the powers and the procedure for carrying out activities (including grounds and procedure for recusal of the members) shall be prescribed by the PPP procedure.

(Article 14.5 supplemented by HO-284-N of 30 June 2021)

(Law HO-284-N of 30 June 2021 has a transitional provision)

Article 14.6.

Announcement on and invitation to the private partner selection procedure

1. The requirements for announcement on the private partner selection procedure, the Request for Qualification and the Request for Proposal, the procedure for publishing them on the website defined under the PPP procedure, for making amendments thereto and providing clarifications thereon shall be prescribed by the PPP procedure.

(Article 14.6 supplemented by HO-284-N of 30 June 2021)

(Law HO-284-N of 30 June 2021 has a transitional provision)

Article 14.7.

Stage of the Request for Qualification

1. The private partner selection procedure shall begin with the stage of the Request for Qualification, whereon an announcement and a request for qualification shall be published.

2. Submitted bids for qualification shall be evaluated as prescribed by the Request for Qualification, based on the results whereof the evaluation commission shall draw up and approve the list of qualified applicants.

3. Where up to three applicants have submitted a bid for qualification, and/or less than two applicants have been qualified, except for the cases provided for by point 1 of part 1 of Article 14.10 of this Law, by the decision of the evaluation commission:

(1) the announcement on the stage of the Request for Qualification may be republished;

(2) the stage of the Request for Qualification may be declared as not having taken place.

4. An applicant shall fill in and submit the bid for qualification as prescribed by the Request for Qualification. An applicant may not submit more than one bid for qualification for the same private partner selection procedure.

5. The minimum amount of information subject to inclusion in the bid for qualification, the procedure for preparation of bids for qualification, including the requirements for the documents certifying compliance with the qualification criteria, the procedure for submission and record-registration thereof, for opening of envelopes of applicants, for evaluation of bids for qualification and correction thereof in case of existing discrepancies, as well as the validity terms of bids for qualification, the procedure for withdrawing and making changes to the bids for qualification, for publication of the list of qualified applicants and provision of the Request for Proposal shall be prescribed by the PPP procedure.

(Article 14.7supplemented by HO-284-N of 30 June 2021)

(Law HO-284-N of 30 June 2021 has a transitional provision)

Article 14.8.

Stage of the Request for Proposal

1. The Request for Proposal shall include the method of evaluation of the private partner selection procedure, the requirements for technical and financial proposals and, where available, the weights given thereto, the draft PPP contract and other information provided for by the PPP procedure.

2. A fee may be charged for provision of the Request for Proposal, the amount or the procedure for calculation whereof shall be defined by the announcement on the private partner selection procedure.

3. In case of quality and value-based selection, bids having crossed the threshold provided for in the stage of the Request for Proposal as a result of evaluation of the technical proposal shall be evaluated on the basis of the technical and financial proposals calculated in accordance with the weights provided for by the Request for Proposal.

4. In case of value-based selection, bids having crossed the threshold provided for by the Request for Proposal as a result of evaluation of the technical proposal shall be evaluated on the basis of the best financial proposal.

5. By the decision of the evaluation commission, working discussions may, before the stage of the Request for Proposal, be organised with qualified applicants for the purpose of identifying questions and issues related to the draft PPP project (where available). During the working discussions provided for in this part, the evaluation commission must ensure equal opportunity for concurrent participation of all the qualified applicants, as well as ensure keeping of minutes of such discussions, providing them to all the qualified applicants within five working days following the discussion.

6. As a result of evaluation of bids, the successful applicant in the private partner selection procedure shall be announced upon the decision of the evaluation commission. The procedure for determining the successful applicant in case of application of the privilege provided for by point 2 of part 11 of Article 10 of this Law shall provided for by the PPP procedure.

7. The procedure for preparation, submission and record-registration of technical and financial proposals, the keeping of minutes of working discussions organised by the evaluation commission, the opening of envelopes of technical and financial proposals, the evaluation of bids and correction thereof in case of existing discrepancies, as well as the validity terms of bids, the procedure for withdrawing and making changes to bids and the procedure for publication of the results of evaluation of bids shall be approved under the PPP procedure.

(Article 14.8 supplemented by HO-284-N of 30 June 2021)

(Law HO-284-N of 30 June 2021 has a transitional provision)

Article 14.9.

Procedure for appeal

1. Each person with interest in the results of the private partner selection procedure shall, pursuant to this Law, have the right to appeal the actions (inaction) and decisions of the competent body and the evaluation commission through judicial procedure.

2. The relations pertaining to the private partner selection procedure, including the consideration of appeals, shall not be regarded as administrative relations and shall be regulated by the legislation of the Republic of Armenia regulating civil law relations.

(Article 14.9 supplemented by HO-284-N of 30 June 2021)

(Law HO-284-N of 30 June 2021 has a transitional provision)

Article 14.10.

Declaring the private partner selection procedure as not having taken place

1. The private partner selection procedure shall be declared as not having taken place, where:

(1) none of the qualification bids or of the bids complies with the conditions of the Request for Qualification or the Request for Proposal, or no qualification bid or bid has been submitted;

(2) no PPP contract has been concluded.

2. The procedure for declaring the private partner selection procedure as not having taken place and the information subject to publication on the website defined by the PPP procedure in this regard shall be prescribed by the PPP procedure. In case of closed procedure, the information provided for by this part shall not be subject to publication.

(Article 14.10 supplemented by HO-284-N of 30 June 2021)

(Law HO-284-N of 30 June 2021 has a transitional provision)

Article 14.11.

Bid security and contract security

1. In the stage of the Request for Proposal, an applicant shall, in the amount and as prescribed by the invitation, submit the bid security.

2. The successful applicant shall, in the amount and as prescribed by the PPP contract, submit the contract security. The requirement to submit a separate contract security for each stage of implementation of the PPP project may be provided for by a decision of the Government on implementation of the PPP project.

3. Bid security and contract security shall be submitted in the form of a unilaterally approved announcement through surcharge or bank guarantee.

4. An applicant shall pay the bid security, where he or she:

(1) has been announced as a successful applicant, but refuses or is deprived of the right to conclude a PPP contract;

(2) has violated the obligation assumed under the private partner selection procedure which has led to termination of further participation of the applicant concerned in the procedure.

5. The requirements applicable to bid security and contract security, the procedure for submission, the grounds and procedure for rejection, as well as the procedure for payment thereof shall be prescribed by the PPP procedure.

6. The cases of and procedure for submission of security of the bid for qualification and the grounds for payment of security of the bid for qualification by the applicant may be provided for by the PPP procedure.

(Article 14.11 supplemented by HO-284-N of 30 June 2021)

(Law HO-284-N of 30 June 2021 has a transitional provision)

Article 14.12.

Direct negotiations

1. In exceptional cases directly related to defence of the Republic of Armenia, by a decision of the Government, a PPP contract may be concluded without the private partner selection procedure, based on direct negotiations.

2. The requirements applicable to direct negotiations and the procedure for conduct thereof shall be prescribed by the PPP procedure.

(Article 14.12 supplemented by HO-284-N of 30 June 2021)

(Law HO-284-N of 30 June 2021 has a transitional provision)

Article 15.

Conclusion of PPP contract

1. The competent authority shall conclude a PPP contract with an applicant successful in a private partner selection procedure (or with a legal person established thereby) for becoming a public partner. The competent authority shall have the right to authorise the state and/or community organisations and/or other legal persons to organise the private partner selection procedure and act as a third party to a PPP contract.

2. Where a PPP contract is concluded with the legal person founded by the successful applicant, such a legal person must comply with the requirements and criteria prescribed in the stages of the Request for Qualification and the Request for Proposal.

3. Where the successful applicant is a consortium of legal persons, the structure of equity participation of the participants of consortium shall also be included in the application. This structure may not be changed at the time of signing a PPP contract. Following the signing of a PPP contract, each amendment to the structure of equity participation of the participants of consortium shall be approved by the Government.

4. The Republic of Armenia or each body of state administration system may not have any equity participation in a private partner organisation.

5. In case of non-compliance of the successful applicant with the conditions of conclusion of a PPP contract with the successful applicant, as well as the conditions of legal qualification before concluding a PPP contract due to new circumstances, the procedure for determining the successful applicant shall be prescribed by the PPP procedure.

(Article 15 amended, edited, supplemented by HO-284-N of 30 June 2021)

(Law HO-284-N of 30 June 2021 has a transitional provision)

CHAPTER 4

PUBLIC-PRIVATE PARTNERSHIP CONTRACTS

1. A PPP contract must at least include the following information and conditions:

(1) the parties to a PPP contract;

(2) rights and obligations of the parties, which must include the risks of the PPP project and allocation of these risks between public and private partners;

(3) (point repealed by HO-284-N of 30 June 2021)

(4) subject matter of a PPP contract, including the scope of activities to be carried out, the components and content of a PPP project and other requirements for public infrastructure and public services;

(5) pursuant to a PPP contract, the description of public infrastructure and other property to be transferred or constructed and/or improved and/or developed and/or operated and/or maintained, including technical and economic features, the significance and time limit (time limits) for the use thereof (where available);

(6) the distribution of rights of the parties (where available) over the relevant infrastructure or other property within the scope of a PPP project, as well as the procedure for their transfer;

(7) the procedure and conditions for allocating land parcels required for the implementation of a PPP project (where necessary), as well as the description of their condition;

(8) the conditions for setting and changing the prices (tariffs) for the goods being supplied, activities being carried out and/or services being rendered by a private partner or conditions related thereto;

(9) the validity period of a PPP contract and/or the procedure for its determination;

(10) contract security, procedure for submission thereof, as well as the grounds and procedure for payment thereof by the private partner;

(11) the nature of result-based payments, availability payments and/or other payments (where available) being made to a private partner;

(12) the procedure for making amendments to a PPP contract;

(13) the nature of all payments (where available) being made to a public partner by a private partner;

(14) the grounds, procedures for and circumstances of termination, including unilateral termination, of a PPP contract, including, the step-in rights of the lender and the procedure for calculation of reimbursement for early termination of the contract;

(15) the minimum volume of investments (where available) being made by a private partner.

(Article 16 edited, amended by HO-284-N of 30 June 2021)

(Law HO-284-N of 30 June 2021 has a transitional provision)

1. The conditions of a PPP contract, including the term thereof may be amended, where the possibility of making such amendment is clearly and directly provided for by a PPP contract. This provision shall prescribe the scope, nature of and procedure for making possible amendments, as well as the circumstances under which such possibility may be used.

2. A PPP contract shall include the procedure and conditions for unilaterally amending a PPP contract, upon the decision of the Government on the ground of applying part 1 of this Article, as well as for compensation of damages incurred by a private partner due to amendments to the legislation of the Republic of Armenia directly relating to the given public infrastructure or public services.

3. The amendment provided for by parts 1 and 2 of this Article may be made only where:

(1) the opinion — stipulated by Article 11 of this Law — provided by the authorised body on that amendment is positive;

(2) the PPP project remains compliant with the criteria provided for by Article 4 of this Law.

1. The parties to a PPP contract, holding property rights over the infrastructure and the property related thereto, shall be entitled, where necessary, to transfer such rights to the other party, including the right of ownership and/or the right to use the land parcels and other movable and immovable property, as well as other property rights for implementing a PPP project in accordance with the provisions of a PPP contract.

2. A PPP contract may provide for — observing all the requirements prescribed by the legislation of the Republic of Armenia on transfer of the right over the property (property rights) — the right of a private partner to transfer all or part of its rights over the public infrastructure and the property related thereto to third parties for a term that does not exceed the term of the relevant right of a private partner established under a PPP contract. The term for transferring the rights over public infrastructure and the property related thereto may not be extended, regardless of the existence of the right to extend the term of the PPP contract.

3. The transfer of rights provided for by part 2 of this Article shall be valid only after being approved by a private partner.

4. The transfer of rights provided for by this Article shall be invalid from the moment of making such transfer, where it results in exceeding the term of a PPP contract.

1. In cases provided for by a PPP contract, a public partner must, as prescribed by the legislation of the Republic of Armenia, ensure the provision of land parcels required for the implementation of a PPP project, to a private partner, except for the cases where the land parcels are under the ownership or possession of a private partner.

2. The land parcels may, without holding an additional private partner selection procedure for that purpose, be provided on the basis of a purchase and sale agreement, lease agreement, agreement on the right to development of a land parcel, servitude or any other transaction that will allow a private partner to fulfil its obligations provided for by a PPP contract.

3. A PPP contract shall envisage the consequences for failure by a public partner to provide land parcels or the necessary rights over them to a private partner as prescribed by a PPP contract.

(Article 19 amended by HO-284-N of 30 June 2021)

(Law HO-284-N of 30 June 2021 has a transitional provision)

1. The violation of obligations (including performance requirements, guarantees and other obligations) by any of the parties may lead to liability prescribed by law or a PPP contract. Any liability, not prohibited by Law, may be included in a PPP contract.

1. A PPP contract may prescribe that in certain special circumstances and pursuant to the conditions of a direct agreement and/or agreements related thereto, a public partner or a lender (lenders) may exercise the step-in rights thereof. In that case, the operation of the relevant public infrastructure and/or the rendering of public services for the purpose of ensuring the effective operation of the infrastructure and/or effective rendering of services and the continuity of the given project may be temporarily assumed by a public partner or other legal person (persons) appointed by a lender (lenders). The costs of such stepping-in shall be borne by the party specified in a PPP contract and/or direct agreement.

2. In the case prescribed by part 1 of this Article, the private partner may be temporarily substituted (fully or partially) by the public partner or the legal person (persons) appointed by a lender (lenders), in each case guided by a more clear procedure defined by a PPP contract and/or direct agreement and pursuant to their respective conditions.

3. Where a private partner is temporarily substituted by a public partner on the basis of a direct agreement, the debt of a private partner may not be transferred to the Government.

4. Any substituting private partner must, as prescribed by a PPP contract, comply with all the qualification requirements and other essential requirements related to the works to be performed and/or to the services to be rendered (including possessing a relevant licence and/or permit provided for by the Law of the Republic of Armenia), based on which a PPP contract has been concluded with an initial private partner.

5. The procedure for and conditions applicable to the substitution of a private partner shall be prescribed by a relevant PPP contract and/or direct agreement. In case of a permanent substitution of a private partner, a public partner shall hold an additional private partner selection procedure for the selection of a new private partner. In case of a temporary substitution of a private partner, no additional private partner selection procedure shall be necessary.

(Article 21 amended by HO-284-N of 30 June 2021)

(Law HO-284-N of 30 June 2021 has a transitional provision)

CHAPTER 5

GUARANTEES FOR RIGHTS OF PRIVATE PARTNERS

1. A public partner and a private partner are equal parties to a PPP contract.

2. Where a private partner sells goods, performs works or renders services at regulated prices (tariffs), and the bodies regulating those prices (tariffs) set such prices (tariffs) for the private partner’s goods, works or services that do not ensure compensation for economically substantiated investments made by a private partner within the scope of the PPP contract, a public partner may, in accordance with provisions of a PPP contract, reimburse to a private partner for the shortage of the compensation amount. The PPP procedure may define methodological instructions, guidelines, as well as criteria, rules or restrictions for reimbursment.

3. A public partner may grant to a private partner exclusive rights for carrying out the activities prescribed by a PPP contract in order to ensure technical and financial viability of a PPP project, unless it contradicts the legislation of the Republic of Armenia.

(Article 22 amended by HO-284-N of 30 June 2021)

(Law HO-284-N of 30 June 2021 has a transitional provision)

1. A direct agreement may envisage such rights and guarantees for lenders that the parties to the agreement find appropriate.

2. A direct agreement may prescribe in detail the rights of lenders for substituting a private partner provided for by Article 21 of this Law, in particular, that the substitution of a private partner being recommended by a public partner may not be implemented without approval of the lender, or such substitution being recommended by lenders may not be implemented without approval of a public partner.

3. A direct agreement may envisage step-in rights for lenders, obligations of parties to an agreement related to the provision of information on the implementation of the PPP project, in case of early rescission of the PPP contract — provisions on the reimbursement to lenders and other provisions agreed between the parties.

4. A direct agreement may, in certain cases provided for thereby, prescribe an obligation for a public partner to make contractual payments directly to lenders instead of a private partner.

5. A public partner shall not hold a private partner selection procedure for the purpose of concluding a direct agreement, where it is concluded with a private partner and a lender.

6. A PPP contract may envisage an obligation of a private partner to provide lenders with security for each type of its obligations (related to the assets within the PPP project, its rights provided for by a PPP contract (and/or documents related thereto) and its activities related to a PPP project), which is not prohibited by the legislation of the Republic of Armenia.

(Article 23 amended by HO-284-N of 30 June 2021)

(Law HO-284-N of 30 June 2021 has a transitional provision)

CHAPTER 6

DATABASE AND REPORT ON PUBLIC-PRIVATE PARTNERSHIP PROJECTS

1. The Government shall establish the procedure for the creation and management of the database of all PPP projects.

2. A public partner shall, as prescribed by part 1 of this Article, submit the copies of each PPP contract concluded thereby, of all annexes or supplements thereof within 20 days following the signing of a PPP contract or of the relevant supplement thereto.

3. The database of a PPP project shall be publicly accessible, except for the information, the publication whereof is restricted by laws.

1. A public partner shall prepare and submit to the PPP unit a report on the implementation of a PPP project, together with an opinion submitted by a private partner.

2. The form of and time limit for submitting a report on the implementation of a PPP project shall be prescribed by the Government.

3. The PPP unit may request additional clarifications and explanations with respect to each report on the implementation of a PPP project.

4. Each report on the implementation of a PPP project must be publicly accessible.

CHAPTER 7

STATE SUPPORT MECHANISMS IN PUBLIC-PRIVATE PARTNERSHIP PROJECTS

1. The following types of state support may be provided to private partners within the scope of a PPP project:

(1) grants;

(2) subsidies;

(3) allocations of assets necessary for the implementation of a PPP project;

(4) guarantees for the minimum revenue and/or minimum number of end users or buyers and/or other types of guarantees and privileges, within the scope of a PPP project;

(5) guarantees that the public partner will consume or use a certain volume or share of goods produced, works performed or services rendered during the implementation of a PPP project;

(6) loans and other types of funding or investments;

(7) reimbursement for certain types of costs and risks related to a PPP project (or direct responsibility for them);

(8) budgetary guarantees;

(9) other means not prohibited by the legislation of the Republic of Armenia, upon the decision of the Government.

2. Within the scope of a PPP project, private partners shall benefit from tax and customs privileges established by the legislation of the Republic of Armenia, as prescribed by the legislation of the Republic of Armenia.

3. The PPP procedure may define methodological instructions on different types of state support in PPP projects and guidelines on providing such support, as well as all criteria, rules or restrictions applicable to them.

(Article 26 amended by HO-284-N of 30 June 2021)

(Law HO-284-N of 30 June 2021 has a transitional provision)

1. A PPP contract may include a provision, pursuant to which a public partner shall — in addition to or instead of payments being made by end users and/or result-based payments — pay to a private partner availability payments and/or other compensations not prohibited by the legislation of the Republic of Armenia, under the conditions prescribed by the contract.

2. A private partner shall have the right to directly or indirectly receive profit from its activities within the scope of a PPP project and dispose such profit.

3. A PPP contract may envisage payments being made by a private partner to a public partner (in the form of a fee paid by a private partner or in other form), that may be in the form of a fixed amount paid on a regular basis or a lump-sum amount, or, pursuant to a PPP contract, in the form of certain share of any revenue to be received from the activities being carried out by a private partner, or in the form of transfer of property belonging to a private partner by the right of ownership to a public partner, or in other forms not prohibited by the legislation of the Republic of Armenia. A PPP contract may also envisage combination of different forms of payments by a private partner.

4. A PPP contract may envisage combination of each or all forms of payments referred to in parts 1-3 of this Article.

CHAPTER 8

SETTLEMENT OF DISPUTES

1. Any dispute arising from a PPP contract, direct agreement or any other agreement related to a PPP project shall be settled upon a relevant agreement and/or through the procedure for settlement of disputes agreed between the parties to the Agreement on Promotion and Reciprocal Protection of Investments, as ratified by the Republic of Armenia.

2. Parties to a PPP contract may freely choose the dispute settlement mechanism, including conciliation, legally binding or non-binding expert assessment or opinion, national or international commercial arbitration or investment arbitration, as well as procedural rules for the settlement of such disputes.

3. A public partner may not have any state or sovereign immunity with respect to disputes arising from a PPP contract, direct agreement or any other agreement related to a PPP project.

CHAPTER 9

FINAL PART AND TRANSITIONAL PROVISIONS

1. This Law shall enter into force on 1 January 2020.

1. The provisions of this Law shall not extend to the PPP contracts concluded between public and private partners and to the private partner selection procedures announced with respect to the PPP projects prior to the entry into force of this Law.

(part repealed by HO-284-N of 30 June 2021)

(Article 30 amended by HO-284-N of 30 June 2021)

(Law HO-284-N of 30 June 2021 has a transitional provision)

President of the Republic	A. Sargsyan
16 July 2019 Yerevan HO-113-N

Translation published on a joint site 11 November 2025.