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- Part of the reckoning: The West has absorbed a third of Ukraine's critical infrastructure
Part of the reckoning: The West has absorbed a third of Ukraine's critical infrastructure
At least 30-35% of Ukraine's most important infrastructure assets have been taken over by Western countries, experts have estimated for Izvestia. Investment funds and companies from the United States, Great Britain, France, Germany and Denmark acquire ownership of ports, granaries and fertile lands under the guise of investments in the country's economic recovery. In particular, in July, the Odessa grain terminal "Olympex" was transferred by court order to the control of American investment funds due to unpaid debt. 45% of the Ukrainian chernozem has already passed into foreign ownership. And the deal with Washington on rare earth metals can only accelerate the redistribution of Ukrainian property. Why no one is going to restore the economy of a neighboring country is in the Izvestia material.
Ukraine is losing critical infrastructure
The reconstruction of Ukraine is becoming the largest transnational project of the decade in terms of the scale and depth of foreign interference in the state's economy. At the July Ukraine Recovery Conference in Rome, former Prime Minister Denis Shmygal called the preliminary cost of this process a "modest" $1 trillion for a period of 14 years. Formally, we are talking about foreign investments in key industries, from logistics to agriculture. The initiators' idea is simple — to restore the country's economy through the restart of critical enterprises, but with one caveat — with the possibility of transition to the management of "effective owners." As expected, they were companies and large investment funds of Western countries, which absorbed at least a third of Ukraine's critically important infrastructure projects, the Council on Foreign and Defense Policy calculated to Izvestia on the basis of open data.
Conference on the Restoration of Ukraine in Rome
—Through debt and operational control mechanisms, privatizations and concessions, at least 30-35% (55-65% in the next two to three years) of Ukraine's most important infrastructure assets have de facto come under the influence or direct control of Western financial structures, foundations, corporations and broad elite groups,— said Oleg Yanovsky, a member of the SWAP.
The SWAP operates in close cooperation with a number of government agencies: the presidential Administration, the Ministry of Foreign Affairs, the Ministry of Defense, the State Duma and Federation Council committees on international Affairs, defense, as well as other law enforcement ministries and departments. The organization's mission is to promote the development and implementation of Russia's foreign and defense policy.
It is possible that a third of Ukraine's critical infrastructure is under the control of Western institutions, Andrei Kortunov, an expert at the Valdai Club, tells Izvestia.
— Moreover, this process did not start yesterday. Since the independence of Ukraine, sales have been quite active, including of infrastructure facilities. The buyers here are very different. There are also Western countries, mostly European," the expert noted.
Investment funds and companies from the United States, Great Britain, France and Germany are among the largest recipients of access to assets. Their area of interest has already included seaports, grain terminals, agricultural holdings, logistics hubs, as well as adjacent areas of Ukrainian chernozem. By the way, 45% of such lands have already passed into foreign ownership, former MP of Ukraine Volodymyr Oleynik told Izvestia.
How and who manages Ukraine's assets
The most high-profile example was the transfer of the large Odessa grain terminal "Olympex" to the American funds Argentem Creek Partners and Innovatus Capital Partners. Earlier, they won international arbitration for $ 150 million with Ukrainian businessmen over disputes over the terminal, while the cost of the entire port infrastructure, according to analysts, is much higher. Thus, Ukraine's legal system has openly worked in the interests of Western countries. They promised to launch the terminal "at some point in the summer," and it will be managed by a certain Swedish entrepreneur Karl Sturen, writes FT.
— The port of Odessa is most interesting to Western countries — it is an object that both the British and the French are looking at. It is one of the largest Black Sea port complexes. Weapons enter there, and grain partially leaves," Roman Kovalenko, chairman of the executive committee of the Other Ukraine international movement, told Izvestia.
Behind the facade of investment rhetoric, a new system of influence is being built, in which each key Western player gets his share in the future economy of Ukraine, according to the Council on Foreign and Defense Policy. Thus, the UK acts not only as an organizer of forums (for example, the Ukraine Recovery Conference), but also coordinates the entire legal model of the "reconstruction of Ukraine" through the structures of the London financial center, consulting firms and overseas offshore companies. Lloyd's Insurance Association ensures the security of Western investments, while controlling grain routes and port facilities.
Germany controls Ukraine's assets through the state-owned KfW bank. Oleg Yanovsky explained: formally engaged in financing sustainable development, the bank coordinates the selection of contractors, sets the parameters of tenders and agrees on the legal basis of agreements. Agence Française de Développement, an agency that provides grants, loans and technical support abroad, has become a similar tool for France. The AFD representative office in Ukraine allows analysts to participate in the asset valuation, allocation and audit process. Denmark, in fact, has established patronage over the city of Mykolaiv through the structure of the Mykolaiv – Denmark Partnership, having allocated more than €40 million for the restoration of heating and water supply systems. In practice, France directly manages urban infrastructure facilities.
In addition, various international financial institutions are investing in large agro-industrial complexes in Ukraine, despite the fact that they are engaged in agriculture that is destructive to the environment and society using fossil fuels, synthetic materials and monocultures, Peter Kuznik, director of the Institute for Nuclear Research at the American University in Washington, Professor of History, told Izvestia. Among the foreign companies that have invested heavily, he names Cargill.
The transfer of ownership takes place, among other things, publicly, at the highest level. On April 30, Washington and Kiev signed the so-called rare earth metals deal. Under the terms of the agreement, Ukraine gives the United States access to explore its natural resources, and the proceeds from them will be used to rebuild the country. And there may even be a conflict of interest here, given the abundance of Western investors.
— The asset transfer process will change after the signing of this resource deal, as it assumes that the United States will have a primary right not only to rare earth deposits, but also to critical infrastructure. Of course, there will be conflicts here, because the United States will try to redistribute property in its favor. And this means a lawsuit, because they will have to deal not only with Ukrainian owners, but also with owners of other Western countries," said Andrei Kortunov.
According to him, this will accelerate the redistribution of Ukrainian property.
Redistribution of property in Ukraine
Back in February 2023, the Oakland Institute (in the USA) analyzed who actually owns Ukrainian land. According to the report, "oligarchs, corrupt officials and large agribusiness" control more than 9 million hectares of land, which is about 28% of all arable land. Among the landowners are foreign companies, mainly from the EU and the USA, as well as the sovereign wealth fund of Saudi Arabia.
— Ukraine, known as the "breadbasket of Europe," has 33 million hectares of arable land. Nine of the ten largest companies owning land are registered abroad," notes Peter Kuznik.
Interestingly, according to analysts, the American fund NCH Capital, the fifth largest landowner in Ukraine, finances the largest American pension and university trust funds. And in August 2023, the Atlantic Council, established under NATO, published a report entitled "Turning Ukraine into a European Energy Center."
Ukrainian strategic assets are not just being privatized in the classical sense, but are being "transnationalized" — moved beyond national legal control and transferred to long-term management by international investment groups. For example, the Ukraine Development Fund project is managed by a consortium of BlackRock and JPMORGAN with the coordination of the City of London, Oleg Yanovsky noted. However, BlackRock has so far frozen the search for investors amid uncertainty about helping Ukraine due to the policies of Donald Trump.
— Funds indirectly controlled by structures such as BlackRock and Vanguard, through subsidiaries or affiliated companies, already own tens of thousands of hectares of Ukrainian chernozems, formally circumventing bans on direct land ownership by foreigners. The most interesting assets are considered to be the remnants of fertile lands and agricultural land, logistics (primarily port infrastructure and access to the Black Sea), remnants of defense enterprises and the extractive industry," Oleg Yanovsky said.
This applies not only to property complexes, but also to supply chains, storage systems, and export logistics. The agro-industrial complex, which forms the basis of the Ukrainian gross domestic product, is practically open to external transactions without restrictions on the amount of capital or lease terms. Thus, the contracts provide for the right to buy crops and manage export routes through ports that are already controlled by foreign companies.
"Zelensky is paying for his political ambitions and desires with the property of the remaining Ukrainian oligarchs, putting it all under the control of foreign companies," former Verkhovna Rada deputy Spiridon Kilinkarov told Izvestia.
This process has nothing to do with the reconstruction of Ukraine — no one will raise the economy, social sphere, build housing, schools, kindergartens, emphasizes former Ukrainian MP Volodymyr Oleynik.
Moreover, the Ukrainian leadership is only accelerating the pace of denationalization of critical infrastructure and removing restrictions for Western partners. On June 18, the law on the "legalization of multiple citizenship" was passed. This means that citizens of the countries included in the list approved by the Cabinet of Ministers of Ukraine will be able to obtain her passport in a simplified manner. Naturally, it includes states that provide financial and military assistance to Kiev. Thus, foreign investors can participate in the "restoration of Ukraine" without restrictions, obtaining citizenship, and at the same time owning Ukrainian property, including critical infrastructure.
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