Ukraine has completed five large-scale privatisation deals worth a combined €209 million since 2024. Yet progress remains modest compared with the number of assets awaiting sale – around 19 large assets, more than 1,000 smaller ones, and 1,510 sanctioned assets. According to KSE Institute, limited institutional capacity and cumbersome procedures remain key obstacles to accelerating privatisation.
This is the focus of the second issue of the Ukraine Reform Series, a regular analytical product by KSE Institute assessing priority structural reforms critical to Ukraine’s resilience, recovery, and EU integration.
Privatisation can improve productivity, strengthen competition, and support economic growth. International evidence suggests that privatised firms tend to outperform their state-owned peers in efficiency and profitability. Privatisation is also associated with higher economic growth, although this likely reflects the effects of broader reform packages rather than privatisation alone. Restructuring or selling underperforming state-owned enterprises could help address weak competition, which both the OECD and World Bank identify as a major constraint on Ukraine’s growth.
Ukraine has one of the largest public-asset portfolios in Europe. The central government directly owns more than 3,000 enterprises and corporate stakes, while local authorities manage roughly 14,000 communal enterprises across 1,469 hromadas.
Recent large-scale sales show that Ukraine’s privatisation mechanism works. The largest of the five deals was the €88 million sale of United Mining and Chemical Company (UMCC), followed by the €54.5 million sale of Hotel Ukraina. All five winning bidders were Ukrainian-registered companies, and all assets remained operational after the sales.
Expectations for 2026 also differ widely. The state budget sets a conservative target of UAH 2 billion in privatisation revenue, while the government’s stated ambition is around UAH 13 billion.
The main constraints are limited institutional capacity, fragmented state ownership, and weak investor protections. The State Property Fund of Ukraine (SPFU) operates on an annual budget of around UAH 198 million, compared with approximately UAH 1.7 billion it generated for the state over the same period. Ownership responsibilities remain divided across roughly 80 ministries and agencies. Weak minority-shareholder protections also discourage partial privatisation, limiting opportunities to attract private capital into state-owned enterprises.
Bank privatisation faces similar difficulties. Applications to serve as financial advisor for the sale of Sense Bank and Ukrgasbank were due on 15 June 2026, but no signed contract had been confirmed at the time the report was drafted. Delays in state-bank governance reforms have added further complications.
International partners remain engaged, although some reforms are behind schedule. The IMF’s July 2026 review assessed Ukraine’s programme performance as broadly satisfactory, with all quantitative targets met, but identified delays in several structural reforms, including state-bank supervisory-board selection. The EU has kept disbursing under the Ukraine Facility despite some shortfalls, approving nearly €3 billion in September 2026. The combined second and third IMF review is expected in December 2026.
In the report, KSE Institute outlines four priority actions to accelerate privatisation.
The first is to unblock bank privatisation. Ukraine should sign the financial advisor contract for Sense Bank and Ukrgasbank before the end of 2026 and meet the IMF’s outstanding state-bank governance benchmarks ahead of the December programme review.
The second is to strengthen the State Property Fund’s capacity. Its funding needs to reflect the scale of its responsibilities and the revenue it generates for the state. The government should also keep scheduled 2026 auctions on track and adopt three pending draft laws covering sanctioned-asset procedures, land relations, and the finality of auction prices.
The third is to strengthen minority-investor protections. Clearer rules for minority shareholders, golden shares, and blocking stakes would make partial privatisation more credible to investors. These mechanisms could support proposed sales of minority stakes in Ukrenergo, Ukrnafta, and Energoatom while allowing the state to retain control over strategic decisions.
The fourth is to reduce fragmentation in state ownership. Ownership functions currently spread across roughly 80 ministries and agencies should be consolidated. One possible approach is to establish a centralised State Asset Manager responsible for preparing state-owned enterprises for future sales and investment.
Stronger institutions, progress on state-bank governance, and better legal protections for investors could help Ukraine advance its privatisation plans for 2026–2027.
