Improving governance at Ukraine’s state-owned energy companies

The EBRD’s investments in Ukraine’s energy system since the start of Russia’s full-scale invasion of the country have been paired with reform efforts to fill key governance gaps in the sector. Priorities have included: alignment with EU accession requirements, enhancing transparency and operational autonomy at state-owned enterprises (SOEs); the strengthening of energy policy and independent regulation; and support for other institutional conditions that foster more competitive and transparent energy markets.

The EBRD has long supported Ukrainian authorities in instituting SOE governance that is predictable, more rules based and less dependent on discretionary practice. For example, the Bank assisted with ambitious corporate governance and gas trading reforms at Naftogaz in 2014, before helping to bring about similar systemic transformations at state-owned energy-sector clients such as Ukrenergo, Ukrhydroenergo and Energoatom. The EBRD has used its lending power to help Ukraine drive through company-level reforms, as well as supporting amendments to national SOE governance frameworks and energy-sector regulation.

The passage of Ukraine’s SOE Corporate Governance Law in February 2024 was a landmark achievement for the country’s authorities. The EBRD was proud to support this process through policy dialogue and technical assistance, in close coordination with G7 countries, the EU, the IMF, the OECD and other international partners. This strengthened the country’s governance framework and enhanced the operational autonomy, transparency and accountability of SOEs by empowering their boards to approve strategic financial and investment plans and appoint/dismiss CEOs, introducing enhanced disclosure requirements and defining grounds for the early dismissal of board members to prevent arbitrary action by the state. The Bank also supported Ukraine with the development of its first ever State Ownership Policy, helping to operationalise and add clarity to the new legislation, as well as helping the Ukrainian authorities to start categorising SOEs for retention in state ownership, privatisation and liquidation.

In 2025, the Bank’s focus moved to reducing energy SOEs’ exposure to undue influence on appointments and key operating decisions. Work to reform rules governing Ukraine’s SOE Nomination Committee prompted the government to adopt resolutions on 31 December 2025 that would bolster safeguards and transparency around supervisory board recruitment processes, bringing them one step closer to OECD best practice. The EBRD also advanced a comprehensive analytical project on lifting SOE debt and insolvency moratoria, helping to shape a general reform blueprint alongside tailored approaches for 11 groups of moratoria. Emerging findings are already informing reform planning with a view to preparing SOEs for the orderly dismantling of non-market constraints that have distorted competition, governance and investment flows for over 25 years. The EBRD has also been supporting efforts to strengthen transparency and integrity in Ukraine’s energy markets. For example, it has helped the national energy regulator, NEURC, to implement rules aligned with the EU’s REMIT framework – which requires wholesale energy trades to be reported and monitored to deter market manipulation – through the ongoing development of a dedicated digital market monitoring system.

The EBRD has always considered good SOE governance and sector regulation to be fundamental to its continued support for Ukraine. In late 2025, a probe into alleged integrity failures involving Energoatom and the broader energy sector added to the urgency of these reforms, while demonstrating the complexities around implementation, particularly during wartime. The Bank has long provided Energoatom with technical assistance on corporate reform. Engagements prior to 2025 resulted in incremental progress, such as Energoatom’s transformation into a joint stock company and the appointment of its first supervisory board. In response to those allegations in late 2025, the EBRD and its international partners sought to reboot Energoatom’s governance, starting with the appointment of a new majority-independent supervisory board. Decisive action to enhance governance in the energy sector and restore public and donor trust is urgently needed in the light of the sector’s ever-growing financing needs and threats to energy security. The EBRD and its international partners will continue to assist the Ukrainian authorities as they advance a systemic reform agenda in the energy industry, promoting gradual liberalisation of the sector, enhanced transparency and operational autonomy for SOEs, and regulatory independence, in close alignment with EU accession requirements.