Introduces a new PPP law to enhance investment in infrastructure
28 Jan 2025
On 28 January 2025, Paraguay enacted Public–Private Partnership (PPP) Law No. 7452/2025, which replaces Law No. 5102/2013. The new law aims to enhance infrastructure investment by improving the efficiency and transparency of PPP frameworks.
Key changes introduced under the law include:
- Streamlining and centralization. The Ministry of Economy and Finance now has oversight of PPP project evaluation, reducing the involvement of multiple agencies and streamlining administrative processes.
- Extended contract terms. The maximum duration of PPP contracts has been extended from 30 to 40 years to encourage long-term investment.
- Higher investment threshold and expanded scope. The minimum investment requirement has been increased to $4.5 million, subject to adjustment by the Ministry. The scope of eligible sectors now includes non-hydropower renewable energy projects.
- Increased State participation. The maximum State contribution to PPPs has been raised from 10 to 25 per cent, with higher participation permitted for social infrastructure projects. The overall fiscal limit for PPP projects has been increased from 2 to 4 per cent of gross domestic product.
- Changes to the bidding process. The minimum notice period for bid invitations has been extended from 60 to 120 days prior to submission deadlines. A right of first refusal has been introduced, allowing proponents to match or improve competing bids within a margin of 3 to 10 per cent.
- Termination and step-in rights. Contracts may be terminated after a suspension period of 60 to 120 days. Creditors are granted step-in rights in cases of non-compliance by the private partner.
- Stronger compliance measures. Entities with a record of State contract violations within the past five years are disqualified from participating in PPP projects.
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Type:
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Entry and establishment (Ownership and control)
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Industry:
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Not industry specific (SDG)
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Services (Electricity, gas, steam and air conditioning supply, Water supply, sewerage, waste management and remediation activities, Construction, Telecommunications)
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