Key facts
- Ukraine's parliament approved the first reading of a bill to speed up privatization of state-owned assets.
- The bill would impose a 20-day deadline for government bodies to transfer assets to the State Property Fund.
- The State Property Fund's chairman, Dmytro Natalukha, stated the bill aims to improve efficiency and generate revenue.
- A proposed state-owned consulting firm would prepare assets for auction and receive 5% of successful sale prices.
- Ukraine aims to raise $295 million through privatization by the end of 2026.
- The government's portfolio includes about 3,000 assets, with a goal to reduce this to 100 key enterprises.
Ukraine's parliament has advanced legislation to accelerate the sale of state-owned assets, a move intended to boost the national budget and meet conditions set by international financial institutions. The bill, approved in its first reading on Oct. 12, seeks to address persistent bottlenecks in the privatization process.
Under current regulations, the State Property Fund faces delays as other government bodies must transfer assets to it, a process that can take months or years without strict deadlines. The proposed legislation would impose a 20-day limit for these transfers, allowing the fund to take ownership if the deadline is missed. Dmytro Natalukha, chairman of the State Property Fund, stated that this change would enhance the efficiency of privatization and increase state revenue.
Additionally, the bill proposes the creation of a dedicated consulting firm, managed by the fund, to prepare assets for auction. This firm would be compensated with 5% of the sale price for successful transactions, with the fee covered by the buyer. Natalukha indicated that the bill could pass its second reading and be adopted by early December.
The Ukrainian government aims to raise $295 million through privatization by the end of 2026, as it grapples with a significant budget shortfall. The State Property Fund, however, has been hampered by issues such as staffing shortages and low salaries, which have discouraged foreign investors. Experts also cite poor communication about viable projects and the risks associated with the ongoing war as major obstacles. Many assets are also burdened by debt, are in poor condition, or face potential lawsuits.
Ukraine's government portfolio currently includes approximately 3,000 assets, with plans to reduce this number to about 100 key enterprises. Since Russia's full-scale invasion, 1,200 assets have been added to the fund's portfolio, with an additional 200 expected by year-end.