Ukraine's Territories Development Ministry seeks to transfer airport maintenance to private sector

Ukraine's Ministry for Communities and Territories Development is exploring ways to involve the private sector in the management and maintenance of the country's airports to reduce reliance on direct budget financing.

According to a statement by the ministry on Wednesday, the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC), at the ministry's request, have assembled an expert team to conduct a comprehensive assessment of potential private sector engagement models. The study will focus on Boryspil, Odesa, and Lviv airports, among others.

Findings from the study are expected in August.

Attracting private investment for airport upkeep would reduce budgetary strain, help maintain infrastructure in operational condition, and ensure airports are ready to resume full-scale air travel quickly once the war ends, the ministry said.

"Although the war continues and air traffic is currently suspended, we must preserve our airport infrastructure in technically sound condition. This is the key to rapid restoration of full-scale air transportation as soon as circumstances allow," said Deputy Minister of Communities and Territories Development Maryna Denysiuk, as quoted in the statement.

She thanked the EBRD and IFC for their commitment to conducting the study, stressing that it would lay the groundwork for developing long-term private investment mechanisms, including concession-based models.

The study's technical brief includes a techno-economic, financial, and institutional assessment of airport operations, the development of private operator engagement models, and market consultations with leading airport operators. The assignment was coordinated with the EBRD, the statement said.

The EBRD has selected a technical advisor, while the IFC has brought in a legal consultant.

Previously, Olivier Jankovec, Director General of the European Region of the Airports Council International (ACI EUROPE), stated that Ukrainian airports require EUR 52 million annually to remain operational. In December 2023, Boryspil International Airport received around EUR 1.5 million in state funding – just enough to cover staff salaries and taxes.