Ministry of Economy, Environment and Agriculture discusses with IFC areas of cooperation in privatization and public-private partnership
On September 9, Minister of Economy, Environment, and Agriculture of Ukraine Oleksii Sobolev met with representatives of the International Finance Corporation (IFC), part of the World Bank Group. The meeting brought together Deputy Ministers Anna Artemenko, Andrii Teliupa, and Pavlo Kartashov, as well as IFC management and experts led by IFC Regional Director for Europe Ines Rocha.
Among the key topics discussed were attracting private capital to the economy through privatization and public-private partnership (PPP) mechanisms, forming an investment portfolio for domestic and foreign investors, expanding access to private sector financing, and coordinating positions on Ukraine's new investment strategy.
"Ukraine is moving from preparation to implementation of large-scale privatization and public-private partnership projects. We expect the first PPP tenders to be launched next year and are counting on IFC's expert support in preparing complex transactions. We are also working on creating a complete set of tools, from legislation to financial mechanisms. We expect these projects to drive private capital into Ukraine, which is necessary for economic recovery and growth," said Oleksii Sobolev.
The Ukrainian side also presented its vision for the privatization campaign, which is expected to launch in 2025. It is planned to form two portfolios of assets – strategic enterprises and properties that are not critical to the state. The IFC has confirmed its readiness to participate in the analysis of projects and preparation of large transactions, as well as to support the attraction of global investors.
A large part of the discussion focused on the development of public-private partnerships (PPPs). Pilot projects in healthcare (Zhytomyr, Vinnytsia) and a new concession for a terminal in the port of Chornomorsk, which could attract USD 200 million in investment, were addressed. The Ministry is working on developing a full package of bylaws for the new PPP Law, as well as on creating mechanisms for viability gap funding (VGF) and a project preparation fund (PPF).
The recently signed agreements between the IFC and PrivatBank were also discussed: a USD 100 million risk-sharing program and a USD 20 million guarantee line for trade finance. These instruments are aimed at supporting micro, small, and medium-sized businesses, in particular women's entrepreneurship and exporters.
A separate topic of discussion was the need to attract equity capital for Ukraine's recovery. In the area of strategic planning, the parties agreed to coordinate efforts to present Ukraine's new Investment Strategy. The Ministry announced that it had completed its preparation and intended to present the document in the fall of 2025 during the World Bank's Annual Meetings.
Background information
IFC (International Finance Corporation) is part of the World Bank Group and has extensive experience in preparing and implementing PPP projects in various sectors of the economy, including logistics, energy, healthcare, infrastructure, etc. For the past seven years, the Government of Ukraine has been working fruitfully with the IFC to develop the potential of public-private partnerships (PPPs).
On December 12, 2022, a Memorandum of Understanding was signed between the Government of Ukraine and the IFC, according to which the IFC acts as a strategic advisor to the government, assisting in creating favorable conditions for increasing private investment in Ukraine's infrastructure, in particular under PPP terms.
Under the Memorandum, the IFC continues to provide support in developing financial mechanisms to attract private capital, in particular through government and donor funding, and in organizing competitions for the implementation of critical projects in key sectors of the economy.