In the two years since the restoration of small-scale privatisation, the State Property Fund of Ukraine has held 839 successful online auctions in the Prozorro.Sale system. This resulted in UAH 6.65 billion in direct revenues to the state budget. Taking into account the VAT paid in the amount of UAH 1.2 billion and the new owners’ obligations to repay the debts of privatised enterprises in the amount of UAH 1.73 billion, the total economic effect of small-scale privatisation of state property reached UAH 9.58 billion.

“The resumption of privatisation during a full-scale war is an important step that is already yielding results. Thanks to transparent auctions, state-owned enterprises are being transferred to new owners who invest in their development, create jobs and pay taxes. For example, the sale of 99 property complexes of state-owned enterprises brought in almost UAH 4 billion. This is not just budget revenues, it is an impetus for economic development and the creation of new opportunities for Ukrainians,” said Yuliia Svyrydenko, First Deputy Prime Minister and Minister of Economy of Ukraine.

“Small-scale privatisation plays an important role in Ukraine’s economic recovery,” said Ivanna Smachylo, acting Head of the SPFU. “It boosts investment in the economy and helps businesses adapt to wartime conditions. Every privatised property, from small administrative buildings to industrial complexes, is turning into a platform for starting and developing business. After all, the new owners are interested in ensuring that the assets operate efficiently and generate profit. This encourages them to invest in modernisation, create new jobs and develop production.”

During this time, 2,857 unique bidders joined the auctions, of which 16% participated in more than one auction. On average, 1.6 successful auctions were held every business day, with 4.73 bidders on average. The starting price of the properties increased by an average of 2.53 times during the auctions.

“After the Parliament resumed the privatisation of state property in August 2022, 770 auctions (almost 92% of the auctions) held by the State Property Fund were held at a higher price, i.e. English auctions. Through Dutch auctions, the state sold property worth more than UAH 138 million, which is UAH 7 million more than the starting price. And it is almost 105 times more than the minimum price to which the reduction was supposed to be made. These figures demonstrate the interest of business in state property during martial law: entrepreneurs compete for assets, increasing their value. And this allows the state to effectively manage its property and raise additional funds to the budget,” said CEO of Prozorro.Sale Sergiy Boote.

The sale of 99 property complexes of state-owned enterprises brought the most money to the budget (UAH 3.79 billion, or 57% of total revenues). The objects that found new owners include industrial and administrative real estate, warehouse complexes, hotels and vehicles, etc.

Most small-scale privatisation auctions were held in Lviv (100), Rivne (75) and Vinnytsia (63) regions. At the same time, Kyiv (over UAH 1.69 billion), Lviv region (over UAH 1.17 billion) and Odesa region (over UAH 615 million) were the leaders in terms of budget revenues.

The expansion of privatisation to the de-occupied territories at the end of 2023 stimulated investor activity in Chernihiv, Sumy, Zaporizhzhia, Mykolaiv and Kharkiv regions. For example, in Kharkiv, after a two-year pause, two auctions were held in August 2024, bringing UAH 75.05 million to the state budget.

More information can be found in the report “Two years of small-scale privatisation in Ukraine: results” (in Ukrainian) on the SPFU website.

Background

In September 2022, 7 months after russia’s full-scale invasion, the Government of Ukraine resumed small-scale privatisation to attract investment, support the economy and facilitate the relocation of enterprises. This was preceded by the adoption by the Verkhovna Rada of Law No. 2468-IX, which simplified the privatisation procedure, in particular by shortening the timeframe for auctions, introducing online submission of documents and a new payment procedure, under which the contract is signed only after the full payment of the object’s value, which accelerates the flow of funds to the budget. The law came into force on 19 August 2022, and on 19 September, the SPFU held the first successful online auction under the updated rules.