EY Ukraine has contributed to the development of the State Property Policy

On November 29, the Government approved the State Property Policy, which is an important component of the state property management reform.

EY Ukraine team acted as a financial and economic advisor in the development of the State Property Policy, with legal support provided by Vasil Kisil & Partners.

EY experts conducted a detailed preliminary analysis of the experience of more than 20 countries that had different starting conditions when implementing international standards of state property management. Also the current legal framework and Ukraine's international obligations were taken into account. Based on the findings, and in close cooperation with Vasil Kisil & Partners' team, EY experts contributed to the preparation of the concept of the Property Policy, which became the basis for further preparation of the final draft of the Policy and related documents, which were later approved by the Government.

EY experts, together with Vasil Kisil & Partners team, also contributed to the development of the procedure for setting goals for state-owned companies and preparing new documents for Ukraine - owner's expectations letters. On October 1, the Ministry of Economy approved the Guidelines for the preparation of owner's expectations letters.

The key goals of the Policy are to optimize the portfolio of state-owned companies, in particular to justify the need to keep them in state ownership, to align the state's public policy and corporate governance of state-owned companies with EU and OECD standards, as well as to improve approaches to remuneration of officials and calculation of dividends, to define the criteria for the mandatory formation of a supervisory board, to establish requirements for reporting, transparency and disclosure of information, etc. Approval of the Property Policy is a condition for Ukraine to receive funding from the EU under the Ukraine Facility program totaling €50 billion.

The project is notable for the large number of stakeholders involved, including the Ministry of Economy of Ukraine and other government agencies, the European Commission, the International Monetary Fund and other international partners of Ukraine, state-owned companies, and a number of external consulting teams, including SOERA and Deloitte.

Oleksii Sobolev, First Deputy Minister of Economy of Ukraine, emphasizes the importance of the project's results: “The State Property Policy is a roadmap for the transformation of state-owned companies. It is designed to make them more transparent, efficient and attractive for investment. After all, investments are the driving force behind the recovery and development of Ukraine's economy. We want state-owned companies not only to operate but also to become real drivers of economic growth.”

Yuliya Zemlytska, Principal, Infrastructure Sector Reforms, European Bank for Reconstruction and Development, comments on the project: “Investments in the restoration of critical infrastructure require transparent corporate governance of state-owned companies. The EBRD has been systematically working with the Government of Ukraine and state-owned enterprises for a decade to improve the regulatory environment and practices in this area. It was an honor for the EBRD to support the Ministry of Economy in the process of developing the State Property Policy, which is a key document for the implementation of the state asset management reform. We look forward to further progress and successful implementation of the Policy in practice.”

Kostiantyn Neviadomskyi, EY Ukraine Consulting Leader, comments: “EY experts are proud to have contributed to the development of the State Property Policy concept, which meets international standards and opens up new opportunities for improving the efficiency of state-owned companies. This Policy will be an important step in improving management practices in Ukraine, ensuring transparency of state-owned companies and helping them to attract international financial resources more effectively. We believe that the results of our joint work with all project stakeholders will form the basis for the implementation of transparent and effective governance mechanisms in the public sector.”

EY project team included, in particular, experts from Consulting practice: Kostiantyn Neviadomskyi, Partner, Practice Leader, Senior Managers Oleksii Iegorchenkov and Oleg Kryvolapov, Manager Yelyzaveta Vatkina, Consultant Daria Haidamaka and Junior Consultant Alisa Koval; Strategy and Transaction practice: Larysa Marchenko, Partner, Yevgenii Sova, Manager; People Advisory Services: Olga Gorbanovska, Partner, Yuliia Holovko, Senior Manager.

*The Property Policy was prepared within the framework of a technical assistance project of the European Bank for Reconstruction and Development. The technical assistance project is being implemented by the EBRD with funding from the Ukraine Stabilisation and Sustainable Growth Multi-Donor Account (MDA), which is managed by the EBRD. The MDA donors are Austria, Denmark, Finland, France, Germany, Italy, Japan, the Netherlands, Norway, Poland, Sweden, Switzerland, the United Kingdom, the United States of America and the European Union, which is the largest donor. The EBRD, the largest institutional investor in Ukraine, has committed more than €6.1 billion since the start of russia's invasion of Ukraine in February 2022. The Bank is focusing on energy and food security, restoring critical infrastructure at the national and municipal levels, providing trade finance and supporting the private sector.