PARADIGMS FOR THE FORMATION OF EFFECTIVE MECHANISMS OF PUBLIC-PRIVATE PARTNERSHIP AND THE ROLE OF BUSINESS STRUCTURES IN THE RENEWABLE ENERGY SECTOR
Keywords:
Green Energy, Agency Theory, Public–Private Partnership, Entrepreneurship, Renewable Energy, Innovation, Stakeholders
Abstract
The article shows how public-private partnerships (PPPs) in renewable energy provide a chance for the public and private sectors to combine resources and share risks in order to finish utility-scale projects that would not otherwise be possible. PPPs are not fully utilized in Ukraine, although being documented in other nations. The relevance of this study is determined by the need to expand renewable energy technologies as a foundation for sustainable economic development. This article analyzes the role of public-private partnerships (PPPs) in the development of renewable energy and focuses on the interaction of public and private efforts to accelerate the transition to sustainable energy. Using narrative review methodology, it is shown that improving public-private partnership (PPP) mechanisms can stimulate the development of entrepreneurial structures in the renewable energy sector by combining public and private resources to implement projects, sharing risks, and accelerating their implementation. The main results of the study are the deterministic features of the development of PPP projects in the field of renewable energy sources, the systematization of the main models and mechanisms for the implementation of PPP in the field of renewable energy. The study also shows how factors like profitability, risk reduction, and advantageous policy frameworks motivate private sector involvement. Low-carbon, climate-resilient partnerships use more innovative strategies, include more stakeholders, exhibit different risk allocations, and focus more on social acceptance than more conventional PPP models. Based on agency theory paradigm, the article presents multi-stage risk allocation framework for PPPs, which is recommended for application, in particular, in Ukraine under the conditions of war-related critical damages of infrastructure.
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References
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Vovk, V. (2024). Mechanisms of state stimulation of public-private partnership for the implementation of waste-free technologies for biofuel production in Ukraine. Sustainable Economic Development, 2(49), 346-353. https://doi.org/10.32782/2308-1988/2024-49-55
Sukhera, J. (2022). Narrative reviews: Flexible, rigorous, and practical. Journal of Graduate Medical Education, 14(4), 414-417. https://doi.org/10.4300/JGME-D-22-00480.1
Carbonara, N., & Pellegrino, R. (2020). The role of public private partnerships in fostering innovation. Construction Management and Economics, 38(2), 140-156. https://doi.org/10.1080/01446193.2019.1610184
Endo, K., Edelenbos, J., & Gianoli, A. (2022). Sustainable infrastructure: A systematic literature review on finance arrangements and governance modes. Public Works Management & Policy, 28(4), 443-475. https://doi.org/10.1177/1087724X221130284
Li, Z., & Wang, H. (2023). Exploring risk factors affecting sustainable outcomes of global public–private partnership (PPP) projects: A stakeholder perspective. Buildings, 13(9), 2140. https://doi.org/10.3390/buildings13092140
Odhiambo, K., Rambo, Ch., & Okelo, S. (2020). Market risk factors and performance of public private partnership renewable energy projects. International Journal of Research in Business and Social Science, 9(4), 366-376. https://doi.org/10.20525/ijrbs.v9i4.767
Othman, K., & Khallaf, R. (2022). A review of public-private partnerships for renewable energy projects in developing countries. Proceedings of International Structural Engineering and Construction, 9(1). www.doi.org/10.14455/ISEC.2022.9(1).ENR-01
La Cruz, G., Rabetino, R., & Kantola, R. (2022). Unveiling the shades of partnerships for the energy transition and sustainable development: Connecting public–private partnerships and emerging hybrid schemes. Sustainable Development, 30(5), 1370-1386. https://doi.org/10.1002/sd.2288
Owojori, O., & Erasmus, L. (2025). Public–private partnerships as catalysts for green infrastructure: a three-pronged analysis of economic, environmental, and institutional factors. Frontiers in Sustainable Cities, 7. https://doi.org/10.3389/frsc.2025.1591278
Fabre, A., & Straub, S. (2023). The impact of public-private partnerships (PPPs) in infrastructure, Health and Education. Journal of Economic Literature, 61 (2), 655–715. DOI: 10.1257/jel.20211607
Olando, S., Mwenda, M., Kikwatha, R., Rambo, Ch. (2024). Effect of public private partnership financing structure on completion of geothermal energy development projects in Kenya. International Journal of Professional Business Review, 9(11), 1-21. https://doi.org/10.26668/businessreview/2024.v9i11.5048
Tipu, W., & Yousaf, T. (2022). Agency theory in public-private partnership projects. Administrative and Management Sciences Journal, 1(1), 71-78. https://doi.org/10.59365/amsj.1(1).2022.29
Clark, R., & Hakim, S. (2019). Public private partnerships: Construction, protection, and rehabilitation of critical infrastructure. Springer.
Liu, J., Love, P. E., Smith, J., Regan, M., Davis, P. R. (2015). Life cycle critical success factors for public-private partnership infrastructure projects. Journal of Management in Engineering, 31(5), 04014073. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000307
Smith, E., Umans, T., & Thomasson, A. (2018). Stages of PPP and principal–Agent conflicts: The Swedish water and sewerage sector. Public Performance & Management Review, 41(1), 100-129. https://doi.org/10.1080/15309576.2017.1368399
Cheng, L., & Cheung, A. W. (2021). Is there a dark side of managerial ability? Evidence from the use of derivatives and firm risk in China. Journal of Contemporary Accounting & Economics, 17(2), 100258. https://doi.org/10.1016/j.jcae.2021.100258
Shrestha, A., Tamošaitienė, J., Martek, I., Hosseini, M. R., & Edwards, D. J. (2019). A principal-agent theory perspective on PPP risk allocation. Sustainability, 11(22), 6455. https://doi.org/10.3390/su11226455
Lai, K., Heydari, M., & Xiaohu, Zh. (2020). Risk management in public-private partnerships. Routledge.
Ameyaw, E. E., & Chan, A. P. (2016). A fuzzy approach for the allocation of risks in public–private partnership water-infrastructure projects in developing countries. Journal of Infrastructure Systems, 22(3), 04016016. https://doi.org/10.1061/(ASCE)IS.1943-555X.0000297
Yu, Y., Chan, A. P., Chen, C., & Darko, A. (2018). Critical risk factors of transnational public–private partnership projects: Literature review. Journal of Infrastructure Systems, 24(1), 04017042. https://doi.org/10.1061/(ASCE)IS.1943-555X.0000405
Fouad, M., Matsumoto, Ch., Monteiro, R., Rial, I., Sakrak, O. (2021). Mastering the Risky Business of Public-Private Partnerships in Infrastructure. International Monetary Fund.
Mazher, K. M., Chan, A. P. C., Choudhry, R. M., Zahoor, H., Edwards, D. J., Ghaithan, A. M., Mohammed, A., & Aziz, M. (2022). Identifying measures of effective risk management for public–private partnership infrastructure projects in developing countries. Sustainability, 14(21), 14149. https://doi.org/10.3390/su142114149
Mundonde, J., & Makoni, P. L. (2025). Bridging the green infrastructure gap: Determinants of renewable energy PPP financing in emerging and developing economies. Sustainability, 17(20), 9072. https://doi.org/10.3390/su17209072
Chen, C., Yu, Y., Osei-Kyei, R., Chan, A. P. C., & Xu, J. (2019). Developing a project sustainability index for sustainable development in transnational public–private partnership projects. Sustainable Development, 27(6), 1034–1048. https://doi.org/10.1002/sd.1954
De Carvalho, L. (2018). Rethinking the continuum between public and private actors in electricity policy in the context of the UK energy transition. Czech Sociological Review, 54(6), 881–906. https://doi.org/10.13060/00380288.2018.54.6.434
Smith, J., & High, M. M. (2017). Exploring the anthropology of energy: Ethnography, energy and ethics. Energy Research & Social Science, 30, 1–6. https://doi.org/10.1016/j.erss.2017.06.027
Thomas, S., Richter, M., Lestari, W., Prabawaningtyas, S., Anggoro, Y., Kuntoadji, I. (2018). Transdisciplinary research methods in community energy development and governance in Indonesia: Insights for sustainability science. Energy Research and Social Science, 45(June), 184-194. https://doi.org/10.1016/j.erss.2018.06.021
Sanderink, L. (2020). Shattered frames in global energy governance: Exploring fragmented interpretations among renewable energy institutions. Energy Research & Social Science, 61, 101355. https://doi.org/10.1016/j.erss.2019.101355
Di Liddo, G., Rubino, A., & Somma, E. (2019). Determinants of PPP in infrastructure investments in MENA countries: a focus on energy. Journal of Industrial and Business Economics, 46(4), 523-580. https://doi.org/10.1007/s40812-019-00129-7
Fleta-Asin, J., & Munoz, F. (2021). Renewable energy public–private partnerships in developing countries: Determinants of private investment. Sustainable Development, 29(4), 653-670. https://doi.org/10.1002/sd.2165
Ugwu, M., Adewusi, A., & Nwokolo, N. (2024). The role of public private partnerships in building clean energy infrastructure in the United States and Nigeria. International Journal of Management & Entrepreneurship Research, 6(4). https://doi.org/10.51594/ijmer.v6i4.984
Chunling, L., Memon, J. A., Thanh, T. L., Ali, M., & Kirikkaleli, D. (2021). The impact of public-private partnership investment in energy and technological innovation on ecological footprint: The case of Pakistan. Sustainability, 13(18), 10085. https://doi.org/10.3390/su131810085
Adebayo, T. S. (2022). Renewable energy consumption and environmental sustainability in Canada: does political stability make a difference?. Environmental Science and Pollution Research, 29(40), 61307-61322. https://doi.org/10.1007/s11356-022-20008-4
Hossin, M.A., Alemzero, D., Abudu, H., Yin, S., Mu, L., Panichakarn, B. (2024). Examining public private partnership investment in energy towards achieving sustainable development goal 7 for ASEAN region. Scientific Reports, 14, 16398 (2024). https://doi.org/10.1038/s41598-024-66800-9
Mammedov, A. (2025). Scientific and theoretical foundations of public-private partnership in the renewable energy sector. Scientific Innovations and Advanced Technologies, 2(42), 125-135. https://doi.org/10.52058/2786-5274-2025-2(42)-125-135
Kryshtal, H. (2025). Optimization of financing for renewable energy expansion projects in Ukraine. Management and Entrepreneurship: Trends of Development, 1(31), 17-26. https://doi.org/10.26661/2522-1566/2025-1/31-02
Vovk, V. (2024). Mechanisms of state stimulation of public-private partnership for the implementation of waste-free technologies for biofuel production in Ukraine. Sustainable Economic Development, 2(49), 346-353. https://doi.org/10.32782/2308-1988/2024-49-55
Sukhera, J. (2022). Narrative reviews: Flexible, rigorous, and practical. Journal of Graduate Medical Education, 14(4), 414-417. https://doi.org/10.4300/JGME-D-22-00480.1
Carbonara, N., & Pellegrino, R. (2020). The role of public private partnerships in fostering innovation. Construction Management and Economics, 38(2), 140-156. https://doi.org/10.1080/01446193.2019.1610184
Endo, K., Edelenbos, J., & Gianoli, A. (2022). Sustainable infrastructure: A systematic literature review on finance arrangements and governance modes. Public Works Management & Policy, 28(4), 443-475. https://doi.org/10.1177/1087724X221130284
Li, Z., & Wang, H. (2023). Exploring risk factors affecting sustainable outcomes of global public–private partnership (PPP) projects: A stakeholder perspective. Buildings, 13(9), 2140. https://doi.org/10.3390/buildings13092140
Odhiambo, K., Rambo, Ch., & Okelo, S. (2020). Market risk factors and performance of public private partnership renewable energy projects. International Journal of Research in Business and Social Science, 9(4), 366-376. https://doi.org/10.20525/ijrbs.v9i4.767
Othman, K., & Khallaf, R. (2022). A review of public-private partnerships for renewable energy projects in developing countries. Proceedings of International Structural Engineering and Construction, 9(1). www.doi.org/10.14455/ISEC.2022.9(1).ENR-01
La Cruz, G., Rabetino, R., & Kantola, R. (2022). Unveiling the shades of partnerships for the energy transition and sustainable development: Connecting public–private partnerships and emerging hybrid schemes. Sustainable Development, 30(5), 1370-1386. https://doi.org/10.1002/sd.2288
Owojori, O., & Erasmus, L. (2025). Public–private partnerships as catalysts for green infrastructure: a three-pronged analysis of economic, environmental, and institutional factors. Frontiers in Sustainable Cities, 7. https://doi.org/10.3389/frsc.2025.1591278
Fabre, A., & Straub, S. (2023). The impact of public-private partnerships (PPPs) in infrastructure, Health and Education. Journal of Economic Literature, 61 (2), 655–715. DOI: 10.1257/jel.20211607
Olando, S., Mwenda, M., Kikwatha, R., Rambo, Ch. (2024). Effect of public private partnership financing structure on completion of geothermal energy development projects in Kenya. International Journal of Professional Business Review, 9(11), 1-21. https://doi.org/10.26668/businessreview/2024.v9i11.5048
Tipu, W., & Yousaf, T. (2022). Agency theory in public-private partnership projects. Administrative and Management Sciences Journal, 1(1), 71-78. https://doi.org/10.59365/amsj.1(1).2022.29
Clark, R., & Hakim, S. (2019). Public private partnerships: Construction, protection, and rehabilitation of critical infrastructure. Springer.
Liu, J., Love, P. E., Smith, J., Regan, M., Davis, P. R. (2015). Life cycle critical success factors for public-private partnership infrastructure projects. Journal of Management in Engineering, 31(5), 04014073. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000307
Smith, E., Umans, T., & Thomasson, A. (2018). Stages of PPP and principal–Agent conflicts: The Swedish water and sewerage sector. Public Performance & Management Review, 41(1), 100-129. https://doi.org/10.1080/15309576.2017.1368399
Cheng, L., & Cheung, A. W. (2021). Is there a dark side of managerial ability? Evidence from the use of derivatives and firm risk in China. Journal of Contemporary Accounting & Economics, 17(2), 100258. https://doi.org/10.1016/j.jcae.2021.100258
Shrestha, A., Tamošaitienė, J., Martek, I., Hosseini, M. R., & Edwards, D. J. (2019). A principal-agent theory perspective on PPP risk allocation. Sustainability, 11(22), 6455. https://doi.org/10.3390/su11226455
Lai, K., Heydari, M., & Xiaohu, Zh. (2020). Risk management in public-private partnerships. Routledge.
Ameyaw, E. E., & Chan, A. P. (2016). A fuzzy approach for the allocation of risks in public–private partnership water-infrastructure projects in developing countries. Journal of Infrastructure Systems, 22(3), 04016016. https://doi.org/10.1061/(ASCE)IS.1943-555X.0000297
Yu, Y., Chan, A. P., Chen, C., & Darko, A. (2018). Critical risk factors of transnational public–private partnership projects: Literature review. Journal of Infrastructure Systems, 24(1), 04017042. https://doi.org/10.1061/(ASCE)IS.1943-555X.0000405
Fouad, M., Matsumoto, Ch., Monteiro, R., Rial, I., Sakrak, O. (2021). Mastering the Risky Business of Public-Private Partnerships in Infrastructure. International Monetary Fund.
Mazher, K. M., Chan, A. P. C., Choudhry, R. M., Zahoor, H., Edwards, D. J., Ghaithan, A. M., Mohammed, A., & Aziz, M. (2022). Identifying measures of effective risk management for public–private partnership infrastructure projects in developing countries. Sustainability, 14(21), 14149. https://doi.org/10.3390/su142114149
Published
2025-12-31
How to Cite
Tiesheva, L., & Shteimiller, I. (2025). PARADIGMS FOR THE FORMATION OF EFFECTIVE MECHANISMS OF PUBLIC-PRIVATE PARTNERSHIP AND THE ROLE OF BUSINESS STRUCTURES IN THE RENEWABLE ENERGY SECTOR. Social Economics, (72). Retrieved from https://periodicals.karazin.ua/soceconom/article/view/28166
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