Ministry of Economy: First month of Land Bank auctions has already raised almost UAH 35 million for the budget
A month has passed since the start of online auctions for the sublease of state agricultural land under the Land Bank project of the State Property Fund of Ukraine. During this time, 93 auctions have been held in the Prozorro.Sale system, with 4,695 hectares of land put up for sale. The final amount of winning bids for the auctions held during this time is UAH 139 million per year, excluding VAT.
“The new approaches to managing state land resources in Ukraine implemented by the Government are proving to be effective. The competition at the auctions shows that entrepreneurs have confidence in the new mechanism. Therefore, the formation and development of a transparent market for subleasing state agricultural land is taking place even despite the war. The transition of this public sector into a competitive, open field creates new opportunities for investment, production, processing and exports, which stimulates economic development,” said Yuliia Svyrydenko, First Deputy Prime Minister and Minister of Economy of Ukraine.
During the first month of the auction, 1,303 offers were received from farms and agricultural enterprises, which demonstrates a high interest in subleasing state land. Due to strong competition – an average of 14 bidders at each auction – the total starting price of subleases increased 8.4 times, and the average price per hectare reached UAH 29,600 per year.
“The first month of auctions for sublease of state agricultural land demonstrated the expediency and timeliness of the decision to create the Land Bank. This made it possible to finally start using the valuable resource available to the state. With a few exceptions, almost all auctions were successful, and farmers demonstrated strong demand for the plots offered. The transparency and good organisation of the process encouraged 283 entrepreneurs to participate in the auctions – this was the number of unique bidders for this month. This is just the beginning of the project, and we expect hundreds more successful auctions and sublease revenues in the billions of hryvnias,” said Ihor Tymoshenko, Deputy Chair of the State Property Fund of Ukraine.
The three regions with the highest number of Land Bank auctions were Vinnytsia (24), Kirovohrad (17) and Zakarpattia (14) regions. The highest average price per hectare of land was recorded in Vinnytsia region – UAH 36,900, while the lowest price was observed in Zakarpattia region – UAH 5,176 per hectare.
The most expensive lot for the month was a 191 hectare land plot in Cherkasy region. It was bid for by 21 bidders, which increased the initial bid 10 times to the winning UAH 9 million. The price of a hectare of this plot reached UAH 47,000.
“The main result of the first month of the Land Bank’s auctions is the UAH 34.7 million paid including VAT and 19 agreements concluded with the winners from 6 regions. Thus, more than 1,178.35 hectares of land have been brought out of the shadows and transferred for long-term use for 14 years to farmers who are interested in its efficient and careful cultivation. I would like to note that most of the bidders and winners of the auctions are local farms and small agricultural enterprises operating within a 50-kilometre radius of the land put up for auction. This confirms our principle of equal access and fair conditions for different market participants,” said Yaroslav Yaroslavskyi, CEO of the State Land Bank LLC.
At the same time, the State Land Bank was forced to refuse to sign protocols with the winners of 12 auctions due to the non-compliance of the submitted packages of documents with the requirements of the current legislation. In particular, six bidders failed to confirm the origin of their funds, three had problems with the mismatch of their electronic digital signatures, and two failed to provide documents containing information on the ownership structure of the legal entity. Accordingly, in 8 of these auctions, the sublease right went to the bidder following the winning bidder in terms of price. Four auctions were re-announced.
As a reminder, the law prohibits the acceptance of additional documents after the auction is over, so it is very important that all the necessary documents are available before the auction starts. The requirements for the list of documents are available on the auction pages. In addition, the State Land Bank has created a memo for potential bidders in auctions for the sublease of state agricultural land with a complete list of documents required for participation in such auctions.
In total, as of today, the Land Bank has announced 252 auctions in 13 regions of the country, offering plots with a total area of 21,044 hectares. The land plots range from 2 to 3,968.9 hectares, allowing bidders to choose the plots that best suit their needs and the scale of their business.
The first month of the Land Bank’s auctions was an important milestone in the implementation of effective management of state land resources in Ukraine. Thanks to the transparent bidding mechanism at Prozorro.Sale, state-owned agricultural land is gradually being brought out of the shadows, making it available to local farmers on fair and favourable terms. The implementation of the Land Bank project not only stimulates the development of the agricultural sector, but also helps to increase revenues to the state and local budgets.