According to Avellum Partner Maksym Maksymenko, the key developments in the country’s economy revolve around infrastructure projects, agricultural land regime liberalization, and large-scale privatization of certain state-owned companies. Maksymenko also reports several updates in legislation, primarily in the areas of zoning and city planning, and capital markets.
“One of the main promises of the current government was the Big construction program,“ Maksymenko says. “Under the program, until the end of this year, the government plans to reconstruct more than 6,500 km of roads, as well as many hospitals, schools, and kindergartens,“ he explains. “The current state of Ukraine’s road infrastructure is fairly poor, so this program will be beneficial to the whole nation,“ he notes. He also points out that the Kyiv ring road is to be built as a part of the program, which is expected to alleviate the traffic issues in Ukraine’s capital. According to Maksymenko, Ukravtodor, the Ukrainian state agency that manages public road infrastructure, is in charge of the program. “The program will be financed by Ukravtodor’s recent USD 700 million bond issuance,“ he says (as reported by CEE Legal Matters on July 14, 2021).
In addition, according to Maksymenko, the number of PPP deals has increased in recent times. He points to Ukraine’s 2018 overhaul of the PPP legislation, which brought it in line with EU practices and laws, as the main reason behind the rise. “The process has been made simpler and more transparent and last year Ukraine signed concession agreements for Olvia and Kherson seaports under these regulations.“
Another important event in Ukraine’s economy was the lifting of the moratorium on agricultural land acquisition. “Around 70% of the country is agricultural land and its sale had been prohibited for 20 years.” Under the new law, Maksymenko explains, Ukrainian citizens and Ukrainian-owned companies are allowed to purchase land and even change its designated use. He reports that, since the law’s entry into force on July 1, 2021, there have been more than 8,000 registered acquisitions.
Privatization seems to be the next big thing, according to Maksymenko, with the government looking into selling various state-owned companies. “The tender for the privatization of the world’s biggest titanium and zirconium producer, United Mining Chemical Company, will be held on August 31, 2021,” he says and adds that the starting price has been set at USD 136 million. “The Ukrainian State Property Fund also plans to sell the Kyiv Machine Building plant for a starting price of USD 52 million,” he says and notes that the plant covers around 35 hectares of prime real estate in Kyiv.
Moving on to legislation matters, Maksymenko reports that the zoning and city planning law underwent a significant reform, which has simplified procedures related to land allotment and change of its designated use, among other things. Finally, he also notes that on July 1, 2021, an amendment to the law on capital markets has been adopted, which was designed to give impetus to the development of financial technology in the country.
Posted on August 23, 2021