Public-Private Partnership (PPP) Lawyers in Panama
PPP lawyers in Panama. Structuring under Law 93 of 2019, tender process, project finance and dispute resolution for infrastructure investors.
Panama's PPP regime: Law 93 of 2019
Public-Private Partnerships are today Panama’s main vehicle for delivering large-scale infrastructure, equipment and public services with private participation. Law 93 of September 19, 2019 created the general PPP regime and established the National PPP Secretariat (SNAPP), a technical unit attached to the Ministry of the Presidency that supports the Governing Body (the Ministry of the Presidency itself) and the Contracting Public Entities. Executive Decree 840 of 2020, published in the Official Gazette on January 4, 2021, implements the law and develops project cycle phases, award mechanisms, required guarantees, risk transfer to the private party and oversight regimes.
The difference from traditional public contracts is structural: in a PPP the private party finances, builds and operates the asset over a long term (typically 15 to 30 years), recovering investment through availability and performance-based payments from the State, user tolls or tariffs, or combinations. This requires a contractual and financial framework substantially more sophisticated than a conventional public works contract.
Sectors with active PPP activity
Panama has an active pipeline in transport (highways, bridges, Metro lines, airport and port expansion), energy (transmission, storage, utility-scale renewables), water and sanitation (treatment, distribution, network expansion), health (hospitals under equipment-and-maintenance schemes) and government buildings. The pipeline is periodically updated by SNAPP. For international investors, identifying opportunities requires careful reading of the PPP Action Plan and public and private initiative announcements.
How we advise on PPP projects
We work with developers, infrastructure funds, EPC contractors, operators and lenders across all phases of the cycle. At origination, we assess legal viability of private initiatives, project eligibility under the PPP regime versus other modalities (concession, public procurement), and preliminary risk structuring. At tender, we assist in bid documents review, formulating clarifications, technical and economic bid submissions and final PPP contract negotiation. At financial close, we coordinate with local and international lenders, multilaterals (CAF, IDB Invest, IFC, CABEI) and insurers in financial package and guarantee structuring. During operation, we handle contract modifications, tariff adjustments, compensable events and disputes.
Financial structuring and typical guarantees
PPP projects in Panama are typically financed through a special purpose vehicle (SPV) on a non-recourse or limited-recourse project finance basis. The structure combines sponsor equity, senior debt (syndicated loans, local or international bond issuance), and mezzanine or subordinated tranches where applicable. Lenders require a security package that typically includes share pledge over the SPV, conditional assignment of the PPP contract, project account pledges, security over project assets and step-in arrangements. We negotiate each of these components on the client’s behalf, balancing bankability with operational flexibility.
Risk allocation: the heart of PPP negotiation
The success of a PPP depends on correct risk allocation: each risk should sit with the party best able to manage and mitigate it. Typical risks include construction risk (cost overruns, delays), demand risk (in usage-based payment models), regulatory and change-in-law risk, FX and inflation risk, and force majeure and political risk. Law 93 of 2019 recognizes economic balance mechanisms and compensable events that reallocate risk to the State under specific circumstances. We design the contract risk matrix and remedy mechanisms (term extension, monetary compensation, tariff adjustment) with a quantitative and bankable approach.
Dispute resolution in PPP contracts
PPP contracts in Panama typically include tiered dispute resolution: direct negotiation, technical dispute boards, mediation and international arbitration. We advise on multi-tier clause drafting, claims management during operation and arbitration representation when conflict escalates. The integrated experience of our PPP, international arbitration and litigation teams allows us to anticipate conflict from the contract stage and build the evidentiary record from day one of operation.
FAQ
What projects can be delivered as a PPP in Panama?
Law 93 of 2019 allows central, decentralized and municipal administration entities to deliver infrastructure, equipment and public services under PPP. Specific eligibility requires multi-criteria analysis demonstrating value for money against traditional public procurement.
Can a foreign consortium bid on a Panama PPP tender?
Yes. Law 93 does not impose Panamanian nationality, although the special purpose vehicle (SPV) that signs the PPP contract is typically incorporated in Panama. Foreign participation is common in large competitive processes.
What is the typical PPP contract term?
Between 15 and 30 years, depending on the asset type, financial model and project life cycle. Longer terms are used for infrastructure with large initial capex and long recovery periods.
Who pays the private party in a PPP?
Depends on the model: self-sustaining PPPs are paid directly by users (tolls, tariffs); co-financed or government-paid PPPs receive availability or performance payments from the State; many projects combine both sources.
How are conflicts resolved in a PPP contract?
PPP contracts typically include tiered mechanisms: negotiation, technical dispute boards, mediation and international arbitration. The arbitration clause is carefully designed to secure bankability and predictability.
Disclaimer
The content on this page is informational and does not constitute legal advice. Each situation requires individual analysis with a Paralelaw attorney. Schedule your free consultation.
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