The government of Paraguay has enacted Decree No. 5441/2026, a regulation designed to modernise the nation’s model for public-private investment in infrastructure. This decree officially implements the “Law for the Modernisation of the Investment Promotion Regime in Public Infrastructure and the Provision of Goods and Services by the State.” The new investment framework aims to create a more dynamic, transparent, and legally secure environment for investors.
President Santiago Peña commented on the significance of the new measure, emphasising its role in the country’s development: “This regulation modernises our investment model, integrating the lessons learned in these first ten years of the public-private partnership model’s existence and the evolution of the subject in the international arena, to guarantee legal certainty and dynamism.”
Peña further stated that the modernisation efforts are “aimed at delivering advanced infrastructure and superior public services to every citizen”, underscoring his conviction that cooperation between the public and private sectors is the most effective path forward.
A framework for enhanced investment
The primary objective of the new regulation is to provide greater predictability, transparency, and agility to all processes related to public infrastructure projects financed by private capital. By establishing clearer guidelines, the government seeks to strengthen the conditions for private sector participation. Consequently, this will foster the development of strategic initiatives under the Public-Private Partnership (PPP) regime, which is mentioned as crucial for national progress.
This new investment framework introduces more precise rules for the structuring of projects, the fair allocation of risks between the state and private partners, and rigorous control over the quality of goods and services provided. These controls will be measured through specific financial and operational performance indicators, with a strong emphasis on maintaining fiscal sustainability and promoting transparency at every stage of a project’s lifecycle.
Strengthening state oversight and fiscal responsibility
A central tenet of the decree is the reaffirmation of the State’s leading role in overseeing these partnerships. It assigns the Ministry of Economy and Finance (MEF) pivotal functions, including the evaluation, prioritisation, and continuous monitoring of all PPP projects. This centralisation of oversight ensures that projects align with national strategic goals and are managed effectively. The MEF will work in close coordination with other public institutions to guarantee a cohesive approach.
Furthermore, the framework incorporates mechanisms for managing potential risks, outlining clear procedures for the early termination of contracts if necessary, and including provisions to safeguard the public interest at all times. This approach to governance is designed to prevent issues before they arise, and to ensure that public assets and funds are protected throughout the partnership.
Key innovations in the updated regulations
The decree introduces several significant innovations to improve the efficiency and fairness of the PPP process. Among the main new features is the inclusion of an early suitability analysis, which will allow for a preliminary assessment of a project’s feasibility before significant resources are committed. The regulations also provide greater clarity on procedural deadlines and requirements, removing ambiguity for potential bidders.
In addition, specific rules have been created to manage situations involving a single bidder and to resolve tie-break scenarios, ensuring a transparent outcome. The framework also formalises the right of first refusal, provides for performance-linked payments to incentivise high standards, and mandates the use of ex-post international audits to verify project outcomes and financial accountability. These measures collectively aim to professionalise the entire investment cycle.
Driving economic growth and public confidence
The government anticipates that this new regulation, combined with Paraguay’s recently achieved investment-grade status, will significantly boost both domestic and foreign investment. The ultimate goal is to improve the quality of public services and accelerate the development of infrastructure that is vital for the country’s economic and social growth.
