Ukrainian PIM Reform: A Systemic Shift Toward Investment-Ready Projects

Ukraine’s capital market today is not an equity-driven market. Even before the full-scale invasion, the market was structurally skewed toward government debt instruments. The war only intensified this trend, as the state remains the only issuer capable of conducting regular placements, ensuring secondary market liquidity, and supporting market-making through banks. As of the end of 2025, the Ukrainian securities market is almost entirely dominated by government bonds.

Based on the NSSMC’s (The National Securities and Stock Market Commission) monthly digests for 2025 (Jan-DEC) bulletin, our calculation shows that, on the organized market, instruments issued by the State of Ukraine – namely domestic government bonds (OVDPs) and FX-linked external domestic government bonds (OZDPs) – accounted for over 98% of on-exchange trading in securities of Ukrainian issuers.

Yet for postwar recovery, Ukraine needs not only substantial financial resources but also high-quality financial instruments and a functioning capital market. Developing such instruments in a sustainable way largely depends on having a pipeline of investment-ready products – prepared, standardized, and economically justified public investment projects that can be structured into debt, quasi-debt, PPP, or blended-finance instruments. This is precisely where the ongoing Public Investment Management (PIM) reform may play an important role.

The reform is intended to answer fundamental questions:

• Which specific projects the state intends to implement
• What these projects cost in terms of CAPEX and OPEX
• How they will be financed
• Whether they are ready for private or foreign capital investments

Before 2024-2025, Ukraine did not have a unified or integrated system for preparing and selecting public investment projects. Instead, fragmented processes existed across multiple streams with uneven standards and, in many cases, politically driven project selection.

The reform changes how the state selects, evaluates, prioritizes, and prepares public investment projects, which in turn can later be financed through PPPs, concessions, project finance structures, donor co-financing, or capital market instruments.

Importantly, PIM in Ukraine is not merely the adoption of “new rules” but a process with concrete implementation steps and completed milestones. Throughout 2025, Ukraine finalized the core stages of this reform, such as:

• Adoption of amendments to the budget code integrating PIM into medium-term budget planning
• Approval of methodological frameworks for project appraisal, selection, monitoring, and medium-term planning
• Establishment of a strategic investment council and interagency coordination architecture

These steps completed the transitional phase of the reform; the target PIM model is scheduled to operate from 2026 onward.

Under the new methodology, projects must undergo standardized prefeasibility and feasibility assessments, including socioeconomic and cost-benefit analysis, fiscal risk assessment, and consideration of PPP or concession potential.

In 2025, Ukraine applied these standards during the national project selection cycle and formed a single public investment project portfolio. According to the official reporting released by the Ministry of Finance, the portfolio for the 2026–2028 medium-term period includes 195 projects and programs with a total estimated value of UAH 12.6 trillion. These projects cover strategic sectors of Ukraine’s reconstruction and growth: energy, transport, municipal infrastructure, housing, education, healthcare, social services, environment, and digitalization.

Alongside the rollout of national project-preparation programs such as FIRST (with the support of EBRD and EIB) or PREPARE (supported by WB), local governments are also deeply involved. Thus, 680 communities and 20 regional military administrations have already approved their own portfolios, bringing the total number of regional portfolios to over 8,400 projects. This impressive level of local activity was made possible by a large-scale training program in 2025, where participants learned PIM procedures, project preparation standards, and how to work with the DREAM system.

The state budget for 2026 allocates UAH 116.9 billion for financing public investment projects and programs included in the unified project portfolio. Several projects have already secured financing from the state or international partners, while others are in advanced preparation stages.

Importantly, the state now classifies projects by financing sources:

• 100% budget/donor-funded
• Mixed financing
• Potentially commercial projects suitable for PPPs or concessions

This allows investors to clearly see where private capital is expected, while receiving standardized information on total project costs, financing structure, implementation timelines, and preparation status.

The reform’s digital foundation is the DREAM platform, an ecosystem covering the entire lifecycle of public investments from project initiation and planning to evaluation, procurement monitoring, and implementation. DREAM integrates with major state systems, including Prozorro and sectoral registries, and has been highlighted by the European Commission as a key transparency tool in Ukraine’s reform progress.

With PIM, Ukraine will get a coherent public investment management system that aligns budgetary and donor financing with a unified and transparent project pipeline. While PIM does not in itself create a capital market, it provides the institutional foundation for future instruments such as project bonds, infrastructure bonds, revenue securitization, or municipal securities. By introducing clear standards for project preparation, establishing structured financing models, and improving the visibility of fiscal commitments, PIM helps create an environment in which sustainable infrastructure financing through capital markets can develop.

Naturally, it goes without saying that investing in these instruments involves both opportunities and risks. To gain a comprehensive understanding of all associated risks — including the possibility of losing the entire invested capital — as well as potential rewards, a clear and objective assessment of the risks and opportunities involved is absolutely essential.

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