Since the beginning of the small-scale privatization reform, which has been underway for 5 years and aims to reduce the state's share in the economy, almost UAH 14 billion has been raised to budgets of various levels through the state online trading system Prozorro.Sale. Thus, UAH 9.8 billion was raised through online auctions of state and municipal property by the State Property Fund (SPFU), and UAH 3.8 billion was raised through privatization auctions announced by communities.

"Five years ago, Ukraine launched small-scale privatization, a reform that has become one of the key reforms for both the economy and the state as a whole. Since then, almost 5,000 state-owned and municipal facilities across Ukraine of various sizes and investment attractiveness have found new owners who are creating businesses, new jobs and paying taxes. Today, the state's undisputed focus is on recovery and economic growth through effective property management, improving the business climate and attracting investment, and privatization through transparent e-auctions in the state electronic trading system Prozorro.Sale should help to achieve this," commented Oleksii Sobolev, Deputy Minister of Economy of Ukraine.

During the reform, almost 5,000 successful privatization auctions were held, including 1,700 auctions by the State Property Fund and its regional offices, and 3,200 auctions by local governments. Thus, more than 9,000 bidders – representatives of small, medium and large businesses – took part in the bidding for the right to purchase state-owned or municipal property.

"The adoption of legislation in 2018 that launched small-scale privatization accelerated and significantly improved the process of selling not only state-owned but also municipal property, as well as made it transparent. Moreover, the first privatization auction was announced by a local government, the Lviv City Council. This shows how much the reform was expected. My colleagues in the parliament and I are constantly working to improve privatization legislation so that the state and communities have every opportunity to attract private investors to facilities that are not strategically important," added Oleksii Movchan, Deputy Chairman of the Parliamentary Committee on Economic Development.

"In 2018, transparent competitive privatization was immediately launched under the same rules for both the state and communities – through online auctions in the state electronic trading system Prozorro.Sale. This fundamentally changed their approach to the logic of managing their assets: the state and communities began to see opportunities to attract investment in facilities that had been burdening budgets for years. The total starting value of the sold assets was UAH 6.3 billion, while the state and local budgets received more than twice as much from their sale. This was made possible due to equal access of everyone to participate in the bidding process and openness and transparency of online auctions," said Illia Mykhailov, Chairman of the Supervisory Board of ProZorro.Sale JSC.

Due to the full-scale war launched by russia in February 2022, the privatization of state property was suspended for 6 months, until August 2022. In the sixth month of the war, the parliament resumed the sale of state property under new rules, including the possibility of faster bidding after the announcement of the auction and the transfer of the property to private hands only after the full price of the property has been paid.

"Last September, we managed to resume small-scale privatization, which has already brought over UAH 2.4 billion to the Ukrainian budget. This is the contribution of the Fund and Ukrainian business to support the Defence Forces and our common Victory. I am grateful to all Ukrainians who are now ready to compete at auctions for state-owned facilities and invest in them. These are brave people. I am confident that this is a good sign for the international investment community. I hope that the resumption of large-scale privatization will also allow us to attract strong international partners," said Rustem Umerov, Chairman of the State Property Fund of Ukraine.

In total, during the war, online privatization auctions raised UAH 2.8 billion for the state and local budgets, while the starting price of the facilities was one billion. The top five most expensive facilities privatized over the five years of the reform were Dnipro Hotel (UAH 1.1 billion), Kalush CHP (over UAH 800 million), Lviv Correctional Colony (UAH 377.5 million), Hermitage Hotel (UAH 311 million), and Odesavynprom (almost UAH 235 million). All of these facilities were state-owned.

More details about the small-scale privatization reform will be available at the conference "Five Years of Small-Scale Privatization Reform: From the First Auction to UAH 14 billion to the Budget" to be held on 30 June 2023. Details and registration for the event are available here.