Privatization and concessions form a key part of Ukraine’s infrastructure development plan
As Ukraine’s new government moves to modernize the nation’s infrastructure with $20 billion of investment over the coming years, foreign investors are lining up to reap opportunities in road, port, airport and rail projects across the nation.
In October, the Ministry of Infrastructure launched two pilot concession projects at the ports of Olvia and Kherson, which attracted over 30 participants from across the world. Moving forward, more port, road and airport projects will open to investors through concessions, while the government has also earmarked IPOs.
“There is a unique opportunity for investors right now because the president’s office, the cabinet of ministers and the parliament are all working together towards the same goals,” says Minister of Infrastructure Vladyslav Kryklii. “In the future, we will launch IPOs for the railway company and the national postal operator.”
One such investor set to support the new infrastructure development drive is Turkish firm ONUR Group, which has built a solid reputation as one of Ukraine’s most successful developers over its 15 years of operation in the country.
Much of ONUR’s success has come down to its vertical business model: the company owns and operates its own quarries and concrete production facilities, as well as its own machinery and equipment, thus ensuring efficiency and protection from market risks in the material supply chain.
“With the desire for national infrastructural improvement, we have participated in more tenders. In parallel, we also started to enlarge our own production facilities and accelerated our investments in Ukraine,” says ONUR Head of Delegation & General Coordinator, Emre Karaahmetoglu.
“In Ukraine we have around 2,000 machines and pieces of equipment, and if we get more projects, we could raise this to 3,000 by late next year. As for staff, we have 5,000 employees here and we’ll keep growing this number as well.”
Having identified a bright future in Ukraine, ONUR has also expanded its investments into other high-growth segments, namely agriculture and renewable energy.
Another developer forecasting solid growth is KAN Development, which has executed some 25 residential, social and commercial projects in collaboration with key partners. With 20 years’ experience in the country, KAN is positioned to partner with investors looking to tap into opportunities in construction.
“A win-win is for foreign investors to come in and do joint projects with developers in Ukraine, who have the ideas, the local knowledge and the network, but not enough capital,” says KAN Development Founder Igor Nikonov.
“We are trying to create ecosystems with the infrastructure we are developing to continue attracting foreign investors and show them the results they can attain when we work together.”