Ukraine plans to attract private investors to build underground defense plants
Ukraine’s Ministry of Defense is developing a mechanism to attract private capital, developers, and investors to build underground production facilities for defense industry enterprises.
The Ministry of Defense (MoD) reported this.
Legislative changes and simplified procedures
Amendments to Cabinet of Ministers Resolution No. 1494 are being drafted to implement the initiative.
They are intended to establish the legal conditions for building underground facilities and related aboveground infrastructure.
"Our task is to create conditions in which Ukrainian defense production can both expand and become better protected. This requires drawing on the resources not only of the state and defense industry enterprises themselves, but also of private capital, developers and the construction sector," said Deputy Minister of Defense Hanna Hvozdiar.
According to Hvozdiar, the new model will make it possible to build new protected production facilities more quickly and reduce such projects’ dependence on budget funding.
The document has completed the main stage of interagency review and is being prepared for submission to the Ukrainian Cabinet of Ministers after legal and anti-corruption reviews.
Attracting developers and expanding the underground defense industry
The proposed mechanism will allow developers or investors to commission the construction of protected facilities using their own or borrowed funds, then transfer the facilities to defense industry enterprises for ownership, lease or use.
The model provides for the following steps and benefits:
- establishing a legal definition of an underground production infrastructure facility;
- extending the simplified procedure to related aboveground structures;
- requiring no additional spending from the state budget;
- simplifying the relocation of defense production;
- developing Ukraine’s underground industrial construction market.
The Ministry of Defense said consultations with construction sector representatives had confirmed private businesses’ interest in the model.
As a reminder, none of Ukraine’s ten largest defense companies is state-owned.
The private sector of the defense industry has surpassed the state sector in the volume of supplies, and most of the leading companies belong to the National Association of Defense Industries of Ukraine (NAUDI).
