Transparent partnership between the state and business: a growth strategy for the Ukrainian economy

Vitaliy Koval, Chairman of the State Property Fund of Ukraine, took part in the First Annual Forbes Ukraine Conference “Money for Victory”. He presented the Fund’s                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             vision of privatization and improvement of the state property management policy for development and overcoming modern risks.

During the panel discussion “Privatization is on the Agenda. How to Increase Capitalization of State-Owned Assets”, Vitaliy Koval emphasized the need to complete the process of privatization of non-core sectors of the economy. He also noted the importance of corporatizing the companies that will remain in the state’s management to create a pool of powerful and efficient enterprises.

“The state strategy is focused on privatizing all non-core assets to attract investment and stimulate economic growth. At the same time, strategic assets, such as nuclear energy and military-industrial complex enterprises, etc. will remain under state control,” Vitaliy Koval noted.

The SPFU is implementing a systematic approach to privatization, ensuring the transparency of auctions through fully online procedures. The effectiveness of privatization is confirmed by the figures, which indicate a high interest of investors in state assets. In the first 5 months of 2024, the SPFU raised more funds from privatization than in the whole of 2018. The average number of bidders at online auctions reached a record high for independent Ukraine - 5.15.

“Privatization is timely because it is not the time to increase the losses of state-owned enterprises. It is an important component of the state property management policy. Privatization does not mean closing down enterprises, but rather gives them a new life,” said Vitaliy Koval and cited the example of the privatization of the Maryliv Distillery, the sale of which brought the state budget more than UAH 200 million from privatization, debt repayment and VAT payment. Last month, a modern bioethanol production facility was opened on the basis of the state-owned enterprise. In total, the project has attracted over UAH 500 million in investments into the Ukrainian economy.

The SPFU Chairman also shared plans to improve legislation based on the experience of France: to allocate part of the privatization proceeds to energy efficiency and the renewal of fixed assets of enterprises that remain in state ownership. Only 10% of savings in this area can yield UAH 25 billion annually.

“I urge businesses to actively engage in the privatization process and send us letters of interest in the objects. Privatization is not only an investment, but also an opportunity to build a new, strong economy of Ukraine together with the state,” Vitaliy Koval summarized.