“It’s not that laws don’t exist – it’s the faith in the law, courts, and lawyers that is missing,” says Zoryana Sozanska-Matviychuk, Partner at Redcliffe Partners in Kiev. “What I hope we see from the new government is not any particular legislation; it is much better implementation. This will hopefully lead to more trust in the country’s legal system as a whole.”
“Following this year’s presidential and parliamentary elections in Ukraine, there has been a big change in the political elites, and a few interesting proposals are already at the center of attention,” Sozanska-Matviychuk reports. According to her, time will tell how those proposals will turn out, and she insists that it is only tangible results, and not talk and promises, that can help build trust towards the government.
“Ukraine still offers very feed-in high tariffs on renewables, including wind and solar energy," Sozanska-Matviychuk says. "This has led to a surge of interest in that particular area. We are seeing intense discussions around reduction of the feed-in tariff in particular and hopefully the issue will be resolved in an investor-friendly manner."
“We are seeing lots of proposals in other areas as well,” she says, “including changes to laws.” According to Sozanska-Matviychuk, the new government seems eager to address laws affecting large investment projects that have, in the past, stalled economic growth. For instance, she says, "for years improved laws regarding concessions couldn’t pass Parliament. Now, it seems like we are close to that kind of positive change finally happening."
Changes to Ukraine's Corporate and Company Laws are relaxing restrictions on investment as well, Sozanska-Matviychuk says. "The land market may be opened up as soon as next year and this is generally seen as a major driver for the growth of the economy." In addition, she says, the government has promised a number of new infrastructure projects as well, including new airports and private toll roads.
“In terms of the economy," she adds, "recent privatization efforts are among the greatest disappointments. There simply has not been much investor interest, which could be partly due to poor management of the privatization process.” She refers to recent announcements by the new government that the near future will see many more successful privatizations, but is reluctant to give them too much credulity. “As I said,” she adds, “now the market will only believe in real, measurable, and tangible results.”
Still, Sozanska-Matviychuk says she is optimistic about the economy and the market, with more investors expressing confidence in its prospects.
Turning to M&A, she says that while there have been few big deals in recent months, there have been a large number of deals overall. “As corporate and business laws are changed," she says, "it is expected that this will lead to easier and more frequent M&A. What that will look like, only time will tell.”
Ultimately, Sozanska-Matviychuk says that she doesn’t expect to see much new significant legislation in the next few months. Instead, she hopes to see better implementation of existing laws. "Laws are fine," she says, "but they don’t really prove to be useful. That’s why we need a system that actually works – which will hopefully lead to people having a greater trust in the legal system. "
“We can’t really know what the future holds," Sozanska-Matviychuk concludes. "Given a few years of downturn, we hope that the tide is about to change”.