Ukraine's government is preparing a new stage of privatization, with plans to sell stakes in major state-owned companies. Minister of Economy, Environment and Agriculture Oleksii Sobolev announced the ministry is already working on legislative changes to make such sales legally possible. According to Sobolev, several laws need adjustments to enable legal entry of investors into these state assets.
This move would be unprecedented in scale for Ukraine. Partial privatization could significantly boost the efficiency and profitability of state-owned enterprises. However, notable challenges remain, including significant debts of many companies, which may require restructuring or gradual repayment arrangements with new private investors. Sobolev highlighted that, in the context of a wartime economy, revenues from privatization may still fall short: the government needs billions of dollars, not just a few billion hryvnias, to meet key budget needs.
The government is only analyzing market demand and consulting with stakeholders; a concrete list of companies for sale has not yet been determined. Meanwhile, the State Property Fund continues ongoing privatizations, having already sold nearly 1 billion UAH worth of state assets in the first half of this year. Income of over 3 billion UAH from privatization is expected by year-end, but this is still insufficient to cover wartime expenditures.
Financially, many state enterprises operate at a loss. For example, the Eastern Mining and Processing Plant suffered over 1 billion UAH in losses in 2024, Boryspil Airport nearly 1 billion UAH, and regional power grids around 732 million UAH. While full privatization of energy firms is currently unrealistic, partial sales or attracting external investors are viable solutions.
Overall, official data shows that over 40% of state companies ended last year with losses, and nearly a thousand enterprises didn't submit financial statements. Even partial privatization of these entities may modernize management, attract investments, and increase transparency, making the sector more beneficial for the state budget.
The government still faces the challenge of dealing with debts, legal hurdles, and making enterprises attractive to investors. Yet, legalizing partial privatization is growing ever more relevant amid war and budgetary pressures.
