Recovery of small privatization in Ukraine: Results after two years

Over the past two years of the recovery of small privatization in Ukraine, the State Property Fund has conducted 839 successful online auctions through the “ProZorro.Sales” system, generating 6.65 billion UAH in direct revenue for the state budget. Together with the paid VAT of 1.2 billion UAH and the new owners’ obligations to settle debts amounting to 1.73 billion UAH, the overall economic effect of privatization reached 9.58 billion UAH.

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Transparency and investment

Yulia Svyrydenko, the First Deputy Prime Minister and Minister of Economy of Ukraine, noted that the revival of privatization during the war is an important step that is already yielding results. Thanks to transparent auctions, state enterprises are transferring to new owners who invest in their development, create jobs, and pay taxes. The sale of 99 property complexes of state enterprises generated nearly 4 billion UAH, stimulating economic growth and creating new opportunities for Ukrainians.

Economic impact of privatization

Iryna Smachilo, Acting Head of the SPFU, emphasized that small privatization contributes to attracting investments and helps businesses adapt to wartime conditions. Each privatized asset becomes a platform for business development. New owners are interested in the effective use of assets, stimulating their investments in modernization and creating new jobs.

During this period, 2,857 unique participants joined the auctions, with 16% participating in multiple auctions. On average, 1.6 successful auctions took place each working day, with an average competition of 4.73 participants. The starting price of assets increased, on average, by 2.53 times.

Success indicators

After the Parliament restored privatization in August 2022, 770 auctions (approximately 92% of all auctions) were held at price increases. This indicates strong interest from businesses in state assets even during the war. In Dutch auctions aimed at reducing prices, assets worth over 138 million UAH were sold, marking a significant success.

The largest contribution to the budget, specifically 3.79 billion UAH (57% of total revenues), came from the sale of 99 unique property complexes of state enterprises. Among the privatized assets are industrial and administrative real estate, warehouse complexes, hotels, and vehicles.

Geography of privatization

The most auctions were held in Lviv (100), Rivne (75), and Vinnytsia (63) regions. In terms of budget revenues, Kyiv leads (over 1.69 billion UAH), followed by Lviv region (over 1.17 billion UAH) and Odesa region (over 615 million UAH).

The expansion of privatization into de-occupied territories at the end of 2023 stimulated investor activity in Chernihiv, Sumy, Zaporizhia, Mykolaiv, and Kharkiv regions. In Kharkiv, after a two-year pause, two auctions were held in August 2024, generating 75.05 million UAH for the state budget.

Conclusion

The revival of small privatization in Ukraine not only ensures budget revenues but also stimulates economic development, attracts investments, and creates new jobs. This is a crucial step toward the recovery of the country’s economy amid war. More detailed information can be found in the report “Two Years of Recovery of Small Privatization in Ukraine: Results” on the SPFU website.