Paraguay

Paraguay substantially modernized its PPP framework through Law 7452/2025 and implementing Decree 5441/2026, replacing the regime established in 2013. The Ministry of Economy and Finance (MEF), through its General Directorate of Public Investment (DGIP), leads PPP policy, project appraisal and fiscal oversight. Contracting authorities remain responsible for structuring, procuring and managing projects, with the Ministry of Public Works and Communications overseeing transport PPPs. Projects require executive approval following technical and fiscal assessments, while contract modifications and other major contract-management decisions require prior MEF approval. The new framework also strengthens risk allocation, financial safeguards and performance monitoring, providing more detailed rules for managing PPPs throughout their lifecycle.^1,2

Paraguay's PPP market remains relatively small and concentrated in transport infrastructure. Following Ruta PY02, the country's first major road PPP, the expansion and improvement of approximately 108 km of Ruta PY01 was awarded in September 2025 and contracted in January 2026. The project involves an estimated US$413m initial investment and marks Paraguay's first use of competitive dialogue in PPP procurement.^3,4 Although procured under the previous legislation, it demonstrates renewed market activity after several years without major PPP awards. Meanwhile, the government is examining private initiatives in roads, river transport and energy, offering potential for a broader pipeline, although these projects remain at preliminary stages.⁵

Political support for PPPs extends beyond the current administration (2023 to present), with both major presidential coalitions endorsing private participation in infrastructure during the 2023 election.^6,7 The president, who previously served as finance minister during Paraguay's first PPP procurement, has maintained a public agenda supporting PPP investment.^8,9 Although the 2025 reforms attracted congressional criticism over the concentration of authority, legislative oversight and municipal participation, these objections focused primarily on governance rather than rejecting PPPs as a policy approach.¹⁰ This broader political backing provides a favorable foundation for the new framework, although effective implementation remains essential.

Paraguay performs particularly well in regulations and institutions (score of 93.2, 6th regionally), supported by strong interagency coordination, dedicated PPP capacity and transparent procurement procedures. It also performs above the regional average in risk management and contract monitoring (62.2, 9th). Requirements for identifying and allocating project risks are comprehensive, and lenders benefit from well-defined intervention rights. Project monitoring and public reporting arrangements are comparatively advanced, although these strengths coexist with weaker financial auditing standards.

Performance in project preparation and sustainability remains constrained (38.4, 13th), particularly due to the absence of dedicated preparation facilities and weaknesses in land acquisition support. The framework also lacks systematic requirements for community consultation and social inclusion in project development. Financing presents mixed results: Paraguay benefits from a relatively favorable cost of capital, but country risk and financial maturity metrics are weaker, and dedicated government financing support for PPP investments remains limited. Financial auditing and reporting standards also lag significantly behind regional peers.

Paraguay has made notable regulatory progress since the previous Infrascope, particularly in risk management, contract monitoring and ex-post evaluation. The 2025-26 reforms introduced more detailed requirements for assessing project risks, managing contingent liabilities and monitoring contractual performance. They also established mandatory independent international evaluations after two years of operation and at contract completion, although implementation remains untested. These changes strengthen the framework for overseeing PPPs throughout their lifecycle, while their effectiveness will depend on consistent application to future projects.