Ukraine: why European investors snub state privatizations

The State Property Fund, the government body that oversees privatizations, touts state-owned enterprises as an easy and safe route to foreign investment. It lists on its website 18 large-scale projects and 157 small-scale projects, with around 1,200 projects under development, from a total of more than 3,000 state assets. The auctions have so far attracted local investorswith 168 small-scale asset sales generating over 1 billion hryvnia ($22.3 million) in the first half of 2026.

At the end of June, the president of the Fund, Dmytro Natalukhaspoke at the Conference on the Recovery of Ukraine in Gdansk, saying that no European investors are interested in participating in auctions for state assets. This is despite the fact that there are numerous privatization opportunities in Ukraine.

According to the Kyiv Independent, there are several underlying problems that are driving away foreign investors. There poor communication from the government regarding feasible projects and ongoing war risks is a major obstacle, as are issues relating to the fund’s staff, particularly regarding English-speaking employeesa person with direct knowledge of Ukraine’s privatization program told the newspaper on condition of anonymity.

Furthermore, Ukraine prohibits disclosing the financial details of an asset before announcing an auctionleaving investors only two or three months to carry out the necessary checks. Meanwhile, assets are often burdened by debt, in poor condition or, if confiscated, potentially subject to legal action. According to Natalukha, Brussels could facilitate the entry of European companies into the Ukrainian market by providing risk reduction tools.

While European investors are on the run, Natalukha says companies from more enterprising countries such as the United States, Turkey, Israel and Azerbaijan are visiting state properties in the agricultural, mining and chemical sectors. However, so far just a foreign company bought a wartime state asset: Azerbaijan’s Neqsol, which bought the UMCC titanium mine last year for 4 billion hryvnias ($95 million).

The situation, however, according to the newspaper, could change. The US Development Finance Corporation (DFC) announced a partnership with the World Bank’s Multilateral Investment Guarantee Agency (MIGA) at the Ukraine Recovery Conference to expand political risk insurance for American companies investing in Ukraine.

According to a person familiar with the privatization process, DFC is ready to provide political risk insurance to American investors willing to submit a bid for the Odessa port facility.