Ukrainian government updates procedure for approving loans, guarantees or suretyships of state-owned enterprises

On 26 August 2025, the Cabinet of Ministers of Ukraine (“CMU”) adopted Resolution No. 1050 “On Approval of the Procedure for Approving the Attraction of External, Domestic Long-Term (over One Year) and Short-Term (up to One Year) Loans, Provision of Guarantees or Suretyships (“Transactions”) in respect Thereof by State Enterprises and Companies (other than Banks) (“SOEs”), in which 50 Percent or More of Shares (Participatory Interests) Is Owned by the State” (“New Procedure”).

The New Procedure became effective on 2 September 2025 replacing the previous one that was introduced by Resolution of the CMU No. 809, dated 15 June 2011.

Definitions of different types of borrowings by SOEs

The New Procedure provides clear definitions of the following terms:

• external borrowing – attraction by the SOEs of a loan from non-residents or issuance of corporate bonds on international capital markets;
• domestic long-term borrowing – attraction by the SOEs of a loan from resident banks or resident financial institutions or issuance of corporate bonds with maturity over one year; and
• domestic short-term borrowing – attraction by the SOEs of a loan from resident banks or resident financial institutions or issuance of corporate bonds with maturity up to one year.

The Ministry of Finance of Ukraine (“MoF”) is still responsible for approval of the Transactions in relation to external and domestic long-term borrowings. At the same time, approval of the Transactions in relation to domestic short-term borrowings is carried out by (i) the relevant state executive body performing the functions of managing objects of state ownership or (ii) the explicitly designated state bodies in relation to certain SOEs, managing functions of which are performed by the CMU (“authorised state body”).

Clarification of distribution of powers in respect of certain SOEs

The New Procedure expressly designates the authorised state bodies responsible for approval of the Transactions in relation to domestic short-term borrowings of certain SOEs:

• the Ministry for Development of Communities and Territories of Ukraine is responsible for JSC “Ukrainian Railways”;
• the Ministry of Defence of Ukraine is responsible for JSC “Ukrainian Defence Industry”; and
• the Ministry of Economy, Environment and Agriculture of Ukraine (“MoE”) remains the authorised state body for other SOEs that are managed by the CMU.

Digitalisation of document flow

The SOEs may now submit documents to the MoF (or the authorised state bodies) for approval of the Transactions (or their amendments) in both paper or electronic form (using a qualified electronic signature or an advanced electronic signature).

Changes in approval of Transactions

The New Procedure updated the prescribed list of documents that must be submitted for the approval process, including:

• abolished the requirement for an extract from the Unified State Register of Legal Entities, Individual Entrepreneurs and Civic Formations; and
• clarified that (i) the authorised state body’s approval of borrowing terms is required to be submitted to the MoF only in relation to external and domestic long-term borrowings and (ii) domestic short-term borrowings are approved directly by the authorised state body without need to make further submission to the MoF.

Under the New Procedure, the MoF must receive the MoE’s conclusion on the economic justification of relevant Transactions. The MoE achieves such conclusion based on:

• analysis of the SOE’s financial standing and the proposed terms of the Transaction;
• verification that the SOE’s financial plan reflects the proposed borrowings and repayments under the Transaction;
• assessment that the proposed interest rate is in line with the National Bank of Ukraine’s key policy rate and the weighted average rates of other financial institutions; and
• assessment whether the purpose of the Transaction is aligned with the SOE’s development objectives.

Changes in approval of amendments to Transactions

In case of external and domestic long-term borrowings, the material amendments to the original terms of the Transaction require approval of the MoF. Such amendments still include changes in relation to (i) the purpose, amount and term of external and domestic long-term borrowings, (ii) type of security, (iii) interest rates and fees, (iv) obligations, rights and liabilities of the parties, as well as (v) proposals for debt restructuring (“material amendments”).

In addition to the previously required documents, the following additional documents must be submitted for approval of the material amendments:

• copies of annual and interim financial statements for the most recent reporting period;
• a comparative table of the material amendments; and
• the MoE’s conclusion on the economic justification of the material amendments.

At the same time, under the New Procedure, the above approval requirement does not apply to: (i) interest rates decrease or (ii) any liability reduction (in terms of amount / number of penalties / default interest) under the loan agreement, guarantee agreement or pledge agreement. In that case, the SOE must only notify the MoF about such amendments within 20 business days.

Updated timeframes

Under the New Procedure, the MoF (or the authorised state body) has up to 20 business days (instead of 30 business days under the previous procedure) upon documents filing to decide whether to grant or refuse the approval.

Additional notes

This legal alert is issued to inform AVELLUM clients and other interested parties of legal developments that may affect or otherwise be of interest to them. The information above does not constitute legal or other advice and should not be considered a substitute for specific advice in individual cases.

For further information on this legal alert and other issues regarding borrowings, please contact our senior partner, Glib Bondar.