In a sharply focused legal session at the Unlocking Investment Through PPPs summit, two international experts issued a pointed diagnosis of Cyprus’ legal and institutional infrastructure for delivering PPPs.
Speaking on on Day 2 of the event, Thibaut Mourgues Managing Partner of Camden Advisory and Co-Founder, Head of Editorial Board and Head of AI & Technology Chapter at the World Association of PPP Units & Professionals (WAPPP) and Jean-Christophe Barth-Coullaré, Executive Director at WAPPP, dissected the country’s current framework, highlighting achievements but warning of critical gaps.
A publication edition containing an overview of what was discussed during the summit is now available online. You can find it here.
Barth-Coullaré (pictured above left) began with a foundational reminder: PPPs are decades-long undertakings, requiring contractual and regulatory stability. “An enabling framework must not become a bureaucratic bottleneck,” he stressed. “It should provide clarity and legal certainty for both investors and the public.” The infrastructure finance community prizes predictability. Any ambiguity around project preparation, risk allocation or contract enforcement diminishes investor appetite, especially in smaller markets like Cyprus.
Procurement Law vs PPP Policy
Most countries operate with a blend of instruments: dedicated PPP laws that address project lifecycle issues, from selection to oversight; and public procurement laws, often EU-derived, which regulate competitive tendering. Cyprus, Mourgues (pictured above right) noted, operates within a hybrid legal tradition, combining elements of both common and civil law. Key statutes include: the 2016 public procurement law aligned with EU rules; the 2017 concessions law (Law 18/2017), applied to projects like the Larnaca and Paphos airports; a fiscal responsibility and budgetary law with relevant, though indirect, provisions; and sectoral laws across energy, transport and utilities. Yet absent from this legal mix is a comprehensive PPP law. That void, said Mourgues, leaves institutional mandates blurred and policy coordination fragmented.
Fixing ad hoc institutionalism
“Currently, institutional arrangements in Cyprus appear ad hoc,” said Mourgues bluntly. Ministries have been launching PPP initiatives independently but without a national policy or designated lead authority. This diffusion of responsibility creates multiple risks, including project duplication, investor confusion, unclear accountability and inconsistent application of fiscal and legal standards The solution, he argued, begins with legislation: a national PPP policy underpinned by legal clarity and enforced through a central PPP unit.
Fiscal oversight: The unsung hero
Nonetheless, Cyprus does score points for its fiscal responsibility law. While not PPP-specific, it mandates vital functions, like risk assessments, budgetary consistency and sustainability analysis. This framework can be a powerful enabler, if applied rigorously and backed by capacity. “Renegotiations undermine credibility and complicate refinancing,” Barth-Coullaré cautioned. Without robust ex-ante analysis, even well-structured deals may unravel under political or financial stress.
Rethinking dispute resolution
On dispute resolution, both speakers addressed investor hesitation. While Cyprus allows arbitration, confidence in local courts remains uneven. “International investors often fear unfamiliar processes or perceived partiality,” noted Barth-Coullaré. The alternative? Pre-agreed mediation mechanisms and clearly defined enforcement procedures – tools that not only improve contract durability, but preserve relationships and reduce transaction costs.
Making procurement market-friendly
Legal compliance is one thing; market responsiveness is another. Mourgues urged Cyprus to ensure that its procurement processes enable, rather than deter, serious bids. This should include adequate time for bid preparation, encouraging smaller local firms to join consortia and embedding qualitative criteria such as ESG and SDG alignment. “Price alone isn’t always the most relevant benchmark,” said Barth-Coullaré. “Strategic fit and long-term value must count too.”
The way forward
Cyprus has demonstrated PPP success in isolated cases, notably its airport and port concessions. Its alignment with EU procurement rules is also a strength but the absence of a national PPP law and a unified institutional lead undermines strategic execution. Still, the tools for reform are at hand: the UNCITRAL model, World Bank and UNECE guidelines, and lessons from peer jurisdictions. What’s needed is the political will to weave them into a coherent framework.
The two experts ended with a clear call to action. To unlock the full potential of PPPs, Cyprus must enact a national PPP policy, legislate a dedicated PPP unit, develop a long-term project pipeline and embed inclusive stakeholder engagement, especially civil society, often “the absent elephant in the room,” as without structure, even the best ideas fragment.
Read more about PPPs in the online edition here.
