Government Reform Initiatives

State-owned enterprises (#SOEs) play a central role in Ukraine’s economy, with more than 3,000 entities across strategic sectors and employing nearly half a million people. Today, we presented the OECD Review of the Corporate Governance of State-Owned Enterprises in Ukraine, together with Ukraine Minister of Economy, Environment and Agriculture, Oleksii Sobolev, CFA, and OECD Deputy Secretary-General, Yasushi Masaki. These enterprises have shown remarkable resilience, maintaining essential services under extraordinary circumstances. At the same time, their size and complexity mean that governance reform remains both urgent and important. Our Review shows that real progress has been made. This was recognised by Ukraine’s adherence this week to the OECD Guidelines on Corporate Governance of State-Owned Enterprises. The next step is clear: ensuring these reforms are implemented consistently in practice, with clearer ownership, stronger state oversight, and fairer market conditions. This will be key to rebuilding trust, attracting investment, and supporting #Ukraine’s long-term economic resilience. Read the report: https://lnkd.in/dxuhDnWR #corporategovernance

Why the new Public-Private Partnership (PPP) law is a breakthrough for Ukraine’s recovery investment strategy. 👏 Today, the Ukrainian Parliament passed a landmark PPP law in its second reading — a decision we’ve been working toward for years. This means infrastructure in Ukraine will no longer be built or restored solely “from the state budget.” Instead, we are now aligned with global standards: delivering projects in partnership with business and international donors through robust PPP frameworks. While the concept of PPP has existed in Ukraine for some time, only two major concession agreements have been signed to date. With this reform, we expect PPPs to finally scale — potentially unlocking up to $1 billion in investments over the next few years. Priority sectors include ports, hospitals, and municipal infrastructure. Here’s what makes this law transformative: 1️⃣ A hybrid PPP model Combining budget funding, donor grants, and private capital — making it more cost-effective for the state, faster to deliver, and safer for investors. 2️⃣ Accessibility for smaller communities No expensive feasibility studies required — a simple concept note will suffice. This enables small-scale projects like rehab centers, kindergartens, or affordable housing. State companies like Ukrzaliznytsia and Ukrenergo can now launch PPPs without bureaucratic delays. 3️⃣ Fast-track recovery mechanism A simplified PPP procedure for sectors like health, energy, transport, education, and social services — active during martial law and for 7 years beyond. It applies to projects of all sizes. 4️⃣ Investor safeguards & legal alignment Stronger protections for investors (e.g., contract stability) and alignment across 30+ sectoral laws — enabling PPPs in previously restricted areas such as healthcare, education, culture, transport, and housing. Grateful to the Parliamentary Committee on Economic Development, Ihor Marchuk for leading the drafting process, and to Dmytro Natalukha and Halyna Yanchenko for their continued advocacy and support. This is just the beginning. Now we move forward — from legislation to real projects.

Yesterday was a mega-Monday for EU enlargement. A day to celebrate.  With the opening of the first negotiation clusters, we took the single biggest step towards Ukraine and Moldova’s EU membership since opening negotiations in December 2023. All 27 Member States supported this step. This time no one had to leave the room. Why is this so important? Because this first negotiating cluster deals with the foundations of any functioning state. It provides Ukraine and Moldova with a to-do list of reforms to consolidate an independent judiciary, fight organised crime and corruption, and make public procurement more transparent. This lays the foundation for their future EU membership. This is good news for Europe. EU enlargement is today part of a process of reshaping Europe’s political and security architecture to create a Europe capable of competing with other major global powers. We will only be successful, if we anchor our neighbourhood into the EU and strengthen European structures that guarantee peace and security. We will now build on the positive tide to accelerate work and deliver on reforms. During my visit to Kyiv last week, I encouraged all political parties to unite behind the common goal of European integration. I brought the same message to Moldova two weeks ago, and to Montenegro, the most advanced country in enlargement process, which closed two more chapters today. EU membership negotiations are a moment to rise as a nation and unite forces on the road to the EU. They are a moment for political parties, both the majority and the opposition, to come together and drive reforms forward.  The next goalpost are now to the so-called interim benchmarks on the rule of law. They are the pre-condition our Member States defined to move towards closing negotiation chapters, and they are also the threshold to much deeper integration into EU structures. Reform progress on fundamental reforms builds the trust that will allow Ukraine and Moldova to integrate in our Single Market and other common European structures, even ahead of full membership. As a next step, the Commission now expects Member States to agree to the opening of the remaining five negotiating clusters still before the summer. This will complete the to-do list for the two countries and map out their path to membership.

Energy Future at the heart of Ukraine's sovereignty In Kyiv, it was impossible last week to ignore talking about the energy supply as the country is racing to secure enough heat and electricity for the winter. But the challenge goes on beyond this winter - without a secure supply of energy people leave, economy breaks, politics cracks. Without energy sovereignty Ukraine’s sovereignty is simply not possible. My visit to Kyiv overlapped with a forecast of the National Bank of Ukraine predicting an increase in emigration of up to 700,000 people in 2024-2025 “due to the significant destruction of Ukraine's energy system, accompanied by prolonged power outages and increasing the risk of the heating season”. The promise of stable energy supply is critical to convince Ukrainians to remain in their country. To bring those who already left back as well. This tragic war is a reminder for all of us that a modern society cannot exist without energy. The consequences of a broken energy system are not measured in blackouts but in number of people leaving the country. The aggressor knows it well. Since April 9200 MW of the country’s energy generation was destroyed: around 80–90% of Ukraine’s energy generation capacity at thermal power plants and around 45% at hydroelectric power plants has been lost. Getting international support for now is critical. And attracting private capital to Ukraine’s devastated energy systems will be key for its swift recovery. Without energy there is no economic activity. The country is ruined. Recent history of Ukraine shows that excessive reliance on oil and gas imports can contribute to spoil politics and impact economy. Healthy economy is based on market prices and free competition. Already much has been done: Energy Community Artur Lorkowski Annual Implementation Report from 2023 estimated that the progress on the markets and integration reform cluster was at 69%. But the remaining part is still critical to be achieved. Transparent energy markets will be as much of the cornerstone for strong and independent Ukraine as today its military forces are. We discussed next steps for the National Energy And Climate Plan just been approved by Yulia Svyrydenko, Ministry of Economy of Ukraine & Oleksii Sobolev, CFA as well as the expert team of Olena Pavlenko, MinEnergy led by German Galushchenko, MinInfrastructure led by Vasyl Shkurakov, MinEnvironment under Ruslan Strilets together with Viktoriia Kyreieva and MinAgriculture with Taras Vysotskyi were all contributing to the plan and are now focused on its delivery along the path of European integration: ·       How to combine surviving the winter & building future energy system? ·       What governance and reforms are still necessary to kickstart investments? ·       How to attract new financial investors and keep engagement of institutional donors? Ukraine’s energy is now at the heart of Ukraine’s survival. It will continue to remain at the heart of Ukraine's sovereignty.

I wrote in FT: Ukraine has survived because parts of its military operate like startups — small autonomous teams, horizontal coordination, fast decisions, constant testing. This culture must scale across the state for Ukraine to survive and grow. First: startup culture and small autonomous teams. Units like the 3rd Assault Brigade and Khartiia operate as compact teams with real authority. They cut bureaucracy, test ideas in combat, and change tactics immediately. This is how Ukraine became a leader in drones and battlefield adaptation. After the war, ministries and state-owned firms must institutionalize this model: small teams, clear mandates, permission to bypass dead rules, and responsibility for delivery. Second: relentless focus on measurable results. In top units, commanders are scored on concrete metrics: enemy equipment destroyed per mission, strike efficiency by system used. These scores drive procurement, resource allocation, and promotions. Government should work the same way. Set deliverables: energy resilience, defense output, investment inflows, school recovery, anti-corruption enforcement and publish progress, open budgets and procurement to audit, and promote officials based on outcomes. Third: invest in people, education and innovation. Ukraine won time by being smarter: airborne and maritime drones, applied labs, AI and data on the battlefield. This must continue after the war through STEM education, research labs, and infrastructure. At the Kyiv School of Economics, spending is about $10,000 per student; most public universities spend under $3,000. The gap shows up in labs, research, and engineer training — the inputs of the postwar economy. History shows this path works. West Germany after 1945, South Korea after 1953, Poland after 1989 rebuilt institutions and emerged stronger. Ukraine has the same chance if it carries military entrepreneurship, accountability, and rapid innovation into civilian governance. In 2022 the Ukrainian people discovered within themselves the capacity for greatness and astonished the world. We can do it again.

ENJOY THE CHALLENGE - "Remarkably, Ukraine has carried out more systemic reforms than ever during the war. These reforms have been driven by the EU and the IMF, with keen support from the United States and the G7 group of nations!" - Anders Aslund, Senior Fellow, Stockholm Free World Forum, Adjunct Professor, Georgetown University and author of “Russia’s Crony Capitalism: The Path from Market Economy to Kleptocracy.” "Signs of ordinary everyday life in wartime Ukraine are a reflection of the remarkable resilience demonstrated by Ukrainians since the onset of Russia’s full-scale invasion almost two years ago. This normality is also due to the little-noticed fact that the Ukrainian economy did surprisingly well in 2023. Ukraine’s strong economic performance is reflected in recent EU and IMF assessments. These traditionally harsh reviews now read like love letters. “Despite the war, the country has benefited from a stronger-than-expected recovery and steadfast reform momentum,” noted the IMF in an entirely typical December 2023 summary. On December 14, 2023, the EU decided to open membership negotiations with Ukraine. This landmark decision was based on Ukraine having fulfilled seven vital conditions set by the EU in June 2022. Four concerned the rule of law, while three were political. The most important conditions were the cleansing of the notoriously corrupt Constitutional Court and the similarly deficient Supreme Council of Justice, which appoints Ukraine’s judges. These steps are among the most important rule of law reforms ever implemented in Ukraine. The EU appears to have learned from its excessively lenient earlier policies toward Bulgaria and Romania. Brussels now demands specific changes and details them. Ukraine has complied with all its demands, with President Zelenskyy signing off on the last three laws the week before the EU convened in December 2023. Despite wartime conditions, the Ukrainian authorities are performing better than expected, both in terms of daily financial administration and advancing the country’s reform agenda. Higher than anticipated tax revenues are being collected, with pensions and wages so far paid on time. The nation’s currency reserves are larger than ever, and inflation has been brought down to five percent. Quietly, Ukraine has finally carried out important and politically challenging rule of law reforms." Cheers to Ukraine for transforming while repelling the largest invasion since World War II. - Steve Slava Ukraini

The Verkhovna Rada of Ukraine has adopted, in the first reading, draft law No. 12087-d aimed at integrating Ukraine’s energy market into the EU market. ✅ 244 MPs voted in favor. The draft law is based on nine acts of the European Union’s energy legislation. It represents a fundamental element of Ukraine’s EU integration process in the energy sector and will ensure a transparent, competitive, and reliable market. Its adoption not only fulfills Ukraine’s international obligations but also strengthens the reliability and quality of electricity supply, improves consumer protection, and exempts electricity exported to the EU from the Carbon Border Adjustment Mechanism (CBAM). This is a critically important step. Ukraine and the European Union are already physically interconnected through energy grids — now we are aligning the rules of the game, granting equal rights and opportunities to both Ukrainian and European market participants. ❓What does this mean for Ukraine and for each of us? 📌 The key goal is the further implementation of transparent European rules in Ukraine’s electricity market. First and foremost, it means more rights and additional protection mechanisms for consumers. Consumers will have access to simple and transparent tools to compare offers from different suppliers. They will also be able to form energy communities with legal standing as market participants. This reform enables the integration of Ukraine’s and the EU’s short-term (spot) electricity markets (known as market coupling), which will increase market liquidity, simplify electricity trade with the EU, and ensure more efficient use of cross-border transmission capacity — ultimately improving the accessibility of electricity for consumers. The new legislation will also create new opportunities for Ukrainian businesses, including electricity import and export, integration of balancing markets with the EU, and connection to European balancing platforms — all under transparent, EU-wide rules. This will improve the flexibility of Ukraine’s power system and access to EU reserves. It will also enhance cooperation between NEURC (Ukraine’s national energy regulator) and European regulatory bodies, as Ukraine builds its energy market in line with EU standards. Furthermore, it establishes joint approaches with the EU in responding and preparing for crisis situations in the electricity sector. The draft law was one of the main topics during the screening of Ukrainian legislation for compliance with EU energy law. Ukraine and the European Commission have agreed to work intensively over the EU’s summer recess to ensure the law is adopted as a whole by September of this year. This will, in turn, pave the way for synchronizing electricity markets at the beginning of 2027.

🔵 Catching up on our homework in EU transport integration. Although the official European Commission screening report will be released in two months, we already know many of the reforms Ukraine must deliver – and truthfully, they should have been implemented yesterday. And let's be clear: this is not just the responsibility of one Ministry — it's a joint effort involving the Government, Parliament, relevant committees, business, and the expert community. 🚛 Immediate priorities include: ▪️ Implementing the EU directive on access to the transport market The framework law is adopted. Now it's time to adopt the implementing regulations: ✅ Rules for loss and restoration of a carrier's good repute ✅ Exam and certification process for transport managers ✅ Accreditation criteria for training centres ✅ Updates to licensing conditions for carriers ▪️ Introducing the concept of public service obligations in transport This means allowing local communities to procure essential but low-profit passenger transport services. Legal changes are in the works. ▪️ Regulating the transport of dangerous goods A draft law is under parliamentary review. It introduces EU-aligned safety and certification requirements for vehicles and cargo. ▪️ Establishing a National Transport Accident Investigation Bureau This independent body would oversee investigations of all transport accidents – a requirement under EU standards and currently missing in Ukraine. ▪️ Approving EU-compliant technical regulations Particularly on vehicle type approval and component certification. Ukrainian standards lag far behind EU safety levels – this must change. ▪️ Rolling out technical inspections for all vehicles, not just commercial ones The inspection system exists. Now, we must expand it, ensure quality checks, and eliminate corruption risks. ▪️ Updating rules for driver working/rest hours and deploying smart tachographs ▪️ Introducing professional standards for drivers, tachograph specialists, and technical inspectors to ensure high levels of skill and compliance. 💡 Crucially, Ukraine must also connect with key EU databases and information systems This covers licensing, carrier registration, vehicle certifications, and enforcement. Without this integration, cross-border cooperation is impossible. 🔗 That said, in many areas, we're already ahead in digitalisation. Digital licenses, driver's documents in the Diia app, online opening of passenger routes, and more. Now, we need to connect this progress with the EU digital infrastructure. ⚙️ These reforms aren't just a matter of checking boxes. They are the foundation for a safe, transparent, and competitive transport system – and a core step toward deep integration with the European Union.

🇺🇦 Ukraine cannot afford weak corporate governance. Especially in state-owned enterprises. The recent developments around Energoatom once again highlight that the corporate governance reform in the state sector remains unfinished. And during wartime, this is no longer just an issue of efficiency — it is a matter of security, resilience, and international trust. Global standards — from the OECD SOE Guidelines (2024) to multiple cross-country studies — send one clear message: ✨ The mere existence of a supervisory board does not guarantee effective governance. A structure may exist — without real substance. In Ukraine, supervisory boards have often been created formally: ⚠️ limited mandates ⚠️ restricted access to information ⚠️ no real authority over appointments, risks or internal controls This is a structural vulnerability, not an exception. ⸻ What actually determines the quality of governance in SOEs? 🔹 Management culture, not just corporate structure 🔹 Independent control and internal audit functions that truly work 🔹 Compliance & anti-corruption systems capable of resisting political pressure 🔹 Real oversight powers for supervisory boards 🔹 Process transparency with verifiable data and accountability State-owned enterprises manage infrastructure directly tied to 🇺🇦 defence and economic resilience. Every governance failure is not “local” (within the company). It is a risk to national stability and international confidence of Ukraine. ⸻ What should happen next? 1️⃣ Strengthen supervisory boards and ensure they have operational tools 2️⃣ Build a culture of accountability and decision-making transparency 3️⃣ Develop internal audit, compliance and anti-corruption units as independent centres of control 4️⃣ Increase transparency across reporting, procurement and risk management 5️⃣ Strengthen the state as a shareholder with clear, predictable ownership policies ⸻ 🇺🇦 Ukraine has already proved it can build institutions under extreme pressure. Now we must complete the corporate governance reform — so that it supports national stability and does not depend on political cycles or individual personalities. #CorporateGovernance #GoodGovernance #SOEReform #StateOwnedEnterprises #BoardGovernance #OECDGuidelines #Compliance #InternalAudit #AntiCorruption #RiskManagement #GovernanceReform

Penny Pritzker presented the US plan for economic reconstruction of Ukraine. She admitted that “Ukrainians' vision is inspiring and aspirational, but they need our support. With the support of the United States and international partners, Ukrainians must commit to implementing five key elements of their path to prosperity: ❗ 1️⃣ Develop a whole-of-government reconstruction planning and prioritization capacity: - Ukraine needs a cross-ministerial planning capacity to clarify priorities and coordinate international support. - This capacity should have a single project pipeline, report to a Strategic Investment Council, and integrate priorities from cities, municipalities, and regions. - Ukraine should consider appointing a senior, globally recognized figure to provide strategic direction for this planning effort. ❗ 2️⃣ Rapidly increase the number of "shovel-ready" reconstruction projects: - There are not enough discrete, investment-ready projects across sectors like infrastructure, energy, manufacturing, and agriculture. - Project preparation facilities should be established to provide technical support like project design, feasibility studies, and financial structuring. - Ukraine's "Dream" database platform should be used to increase transparency and awareness of public and private reconstruction efforts. ❗ 3️⃣ Continue to drive reform and anti-corruption efforts: - Ukraine has made progress on reforms, but must maintain momentum, especially in areas like customs, accounting, and strengthening anti-corruption agencies. - Codifying the "Dream" database platform into law and further empowering NABU and SAPO are key steps. ❗ 4️⃣ Attract more capital investment to Ukraine: - Ukraine needs to reactivate and expand its banking sector, insurance offerings, equity and debt markets to attract private capital. - War risk insurance products are critical for protecting investors and should be scaled up. - Commercial and investment banks should carefully assess regional risks and opportunities in Ukraine. ❗ 5️⃣ Bring back Ukraine's displaced population to power the economic comeback: - Ukraine needs to strategically rebuild and deploy its workforce, including retraining women for critical reconstruction jobs. - The government must rebuild housing, schools, and provide mental and physical care for returning citizens. #UkraineReconstruction #EconomicRecovery #SupportUkraine #GlobalPartnership #FutureProsperity #RebuildUkraine #PathToProsperity #InternationalSupport #AntiCorruption #Investment #WorkforceDevelopment #StrategicPlanning #ProjectPreparation #CapitalInvestment