Key facts
- Ukraine is trying to attract foreign investors to buy thousands of state-owned assets, many of which are unprofitable or inefficient.
- Despite efforts, foreign interest, particularly from Europe, remains low due to war risks and the condition of the assets.
- The State Property Fund is advertising online auctions and highlighting transparency, but investors face challenges with due diligence and asset quality.
- The U.S. Development Finance Corporation and World Bank's MIGA will offer political risk insurance to American firms investing in Ukraine.
- A key upcoming auction is for the Odesa Portside Plant Facility, an ammonia plant with significant debt and located in a high-risk region.
Ukraine is actively seeking foreign investment to privatize thousands of state-owned assets, many of which are currently unprofitable or inefficient. However, the initiative has struggled to attract significant interest from international buyers, particularly those in Europe. Dmytro Natalukha, the chairman of Ukraine's State Property Fund, acknowledges that deep-rooted issues are deterring investors, including ongoing war risks, poor communication about viable projects, and staffing limitations within the fund, such as a lack of English-speaking employees.
Investors also face challenges with due diligence, as Ukraine's regulations restrict the disclosure of an asset's financial details before an auction. Many assets are burdened with debt, in poor condition, or potentially subject to legal challenges if they were previously confiscated. Reiner Perau, CEO of the German Chamber of Commerce in Ukraine, noted that many offered assets require substantial restructuring and additional investment.
Despite these hurdles, the fund has seen some success with local investors, raising over 1 billion hryvnia from small-scale sales in the first half of 2026. Companies from more risk-tolerant countries like the U.S., Turkey, Israel, and Azerbaijan have shown interest, with Neqsol of Azerbaijan being one of the few foreign firms to acquire a state asset during wartime by purchasing the UMCC Titanium mine.
To bolster confidence, the U.S. Development Finance Corporation (DFC) and the World Bank's Multilateral Investment Guarantee Agency (MIGA) have partnered to expand political risk insurance for American firms investing in Ukraine. This initiative aims to cover both war risks and government overreach. The DFC is reportedly ready to provide insurance for the upcoming auction of the Odesa Portside Plant Facility, an ammonia plant with significant debt and located in a region vulnerable to Russian attacks.
Natalukha expressed optimism about selling the Odesa plant, which has attracted attention due to global ammonia supply disruptions. He acknowledged that assets are being sold at a discount but emphasized the desire for strategic buyers who are committed to being physically present and protecting their investments. Experts suggest that improved communication and targeted roadshows in European capitals could help attract more cautious investors.