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Public private partnerships in Panama under Ley 93 de 2019: B/.15 million floor, public initiative only, 30 year terms and arbitration in Panama

Last verified: 2026-10-29 · Status: Stable

Ley 93 de 2019 lets public entities contract private companies to design, build, finance, operate and maintain infrastructure or public services, with the private partner taking project risk and being paid by users, the State or both. Projects must be worth at least B/.15,000,000 (municipalities can go lower), must come from the public sector's investment plan or a Cabinet list, and are tendered publicly. Contracts last up to thirty years plus ten, are held by a Panamanian special purpose company, can be pledged to lenders and send disputes to a technical panel and arbitration seated in Panama City.

Panama's currency, the balboa (B/.), is at par with the US dollar, which circulates as legal tender (Ley 84 de 1904; see fx/dollarization-and-the-balboa). USD figures therefore equal the balboa figures.

Key facts

Minimum project value for a national PPP contract	15000000 USDLey 93 de 2019 art. 6, as of 2026-10-29 · in force
Maximum PPP contract term (extendable up to 10 years)	30 yearsLey 93 de 2019 art. 65, as of 2026-10-29 · in force
Maximum extension of a PPP contract	10 yearsLey 93 de 2019 art. 65, as of 2026-10-29 · in force
Cap on present value of PPP commitments of the non financial public sector	7 % of GDPLey 93 de 2019 art. 18 numeral 3, as of 2026-10-29 · in force
Unsolicited private PPP proposals	Not provided for; public initiative only textLey 93 de 2019 art. 7, as of 2026-10-29 · in force

The rule

1. PPPs are self financed, where users' tariffs, tolls or charges cover all project costs, or co financed, where the State provides transfers, guarantees or both, creating firm or contingent commitments.Ley 93 de 2019 (Gaceta Oficial 28864-B de 19 de septiembre de 2019), art. 5, 2019-09-19 official text · verified 2026-10-29

2. A PPP contract may not be signed when the project value is below B/.15,000,000; municipalities may contract smaller PPPs under the regulation.
Example: A B/.12,000,000 hospital maintenance contract cannot be a national PPP; a B/.80,000,000 highway can. / US$12,000,000 is below the floor; US$80,000,000 qualifies.Ley 93 de 2019 (Gaceta Oficial 28864-B de 19 de septiembre de 2019), art. 6, 2019-09-19 official text · verified 2026-10-29

3. PPP projects originate by public initiative: contracting entities identify them and they must be in the five year investment plan (Plan Quinquenal de Inversiones) or in a list approved by the Cabinet, aligned with the Government Strategic Plan. PPP contracts are governed by Ley 93 and its regulation and, in what they do not cover, by the public procurement law, Ley 22 de 2006.Ley 93 de 2019 (Gaceta Oficial 28864-B de 19 de septiembre de 2019), arts. 7 and 8, 2019-09-19 official text · verified 2026-10-29

4. A governing body (ente rector) approves projects with a National PPP Secretariat attached to the Ministry of the Presidency as its technical arm; projects need a report covering social analysis, cost benefit compared with public execution, risk allocation, service indicators, sustainability and feasibility, legal issues and a preliminary environmental analysis.Ley 93 de 2019 (Gaceta Oficial 28864-B de 19 de septiembre de 2019), arts. 10, 12 and 27, 2019-09-19 official text · verified 2026-10-29

5. Fiscal limits: an entity may contract PPPs while its accumulated firm and quantifiable contingent commitments (including concessions under Ley 22 de 2006 and Ley 5 de 1988) do not exceed 30 percent of investment executed the previous year, or 30 percent of planned investment over the next five years; the governing body cannot authorise new PPPs if the present value of non financial public sector PPP commitments exceeds 7 percent of GDP. Contracting entities must budget each year's payments and the Ministry of Economy and Finance must honour them with priority for projects under way.Ley 93 de 2019 (Gaceta Oficial 28864-B de 19 de septiembre de 2019), arts. 18 and 19, 2019-09-19 official text · verified 2026-10-29

6. The winning bidder must form a special purpose company in Panama, which signs and holds the PPP contract; in co financed PPPs all project resources run through a dedicated trust in Panama with a trustee licensed by the Superintendencia de Bancos and approved by the governing body.
Cost to do it: Bid and performance bonds as set by each contracting entity with the Comptroller General (art. 42); special purpose company formation and trust costs.Ley 93 de 2019 (Gaceta Oficial 28864-B de 19 de septiembre de 2019), art. 39, 2019-09-19 official text · verified 2026-10-29

7. The maximum PPP term is thirty years, extendable up to ten years; delays attributable to the contracting entity extend the term by the delay, up to five years in total. The term runs from the Comptroller General's countersignature of the contract.Ley 93 de 2019 (Gaceta Oficial 28864-B de 19 de septiembre de 2019), art. 65, 2019-09-19 official text · verified 2026-10-29

8. A special non possessory pledge may be granted to lenders over the rights under the PPP contract, payments committed by the contracting entity and the company's revenues; transfers of the contract need approval, and transfers to the pledge creditor are approved by the governing body.Ley 93 de 2019 (Gaceta Oficial 28864-B de 19 de septiembre de 2019), arts. 82, 83 and 84, 2019-09-19 official text · verified 2026-10-29

9. PPP contracts must include a direct negotiation stage. Technical or economic disputes may then go to a five member technical panel (two lawyers, two engineers and one economist or finance professional) whose non binding recommendation is due within thirty calendar days, extendable once, or directly to arbitration. The contract sets the arbitration rules, but the applicable law is Panamanian, the seat is Panama City and the language is Spanish; pledge creditors may join as independent third parties.Ley 93 de 2019 (Gaceta Oficial 28864-B de 19 de septiembre de 2019), arts. 76, 77 and 78, 2019-09-19 official text · verified 2026-10-29

Worked example

The Ministry of Public Works includes a B/.250,000,000 (US$250,000,000) toll road in its five year investment plan and the governing body approves it as a self financed PPP.
A Spanish and Colombian consortium wins the public tender and forms a Panamanian special purpose company to sign a 30 year contract.
Lenders take the special pledge over the contract rights and toll revenues.
A dispute over a design change goes first to direct talks, then to the technical panel for a recommendation within thirty days, and finally to arbitration in Panama City in Spanish under Panamanian law.

Step by step

Track the five year investment plan and Cabinet PPP lists, since projects come only from public initiative.
Prequalify where the contracting entity runs a prequalification and take part in the consultation period on the tender documents.
Prepare the bid with the bid bond required by the tender documents.
On award, form the special purpose company in Panama and, for co financed projects, set up the dedicated trust.
Post the performance bond, sign the contract and wait for the Comptroller General's countersignature, from which the term runs.
Arrange lender security through the special PPP pledge.

Common traps

There is no unsolicited proposal route: a private idea must first be adopted into the public investment plan or a Cabinet list.
Arbitration must be seated in Panama City, in Spanish, under Panamanian law, whatever rules the contract picks.
The 30 percent and 7 percent of GDP commitment caps can stop new co financed projects even when an entity wants them.
Payments depend on yearly budget appropriations; the law obliges the State to include them, but timing risk remains.

Sources

Ley 93 de 2019, public private partnership regime, Gaceta Oficial 28864-B

← Panama Pacífico special economic area: registration, tax exemptions, the 5 percent office services rate and labor rules under Ley 41 de 2004Selling to the Panamanian State: procedures, thresholds, bonds and bid challenges under the public procurement law (Ley 22 de 2006) →

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