Billion for the growth of industrial parks
21.04.2025When did industrial parks appear in Ukraine and how do they work? writes epravda.com.ua.
Illustrative photo
The concept of an industrial park has been enshrined in Ukrainian legislation since 2013, but their active development began after a full-scale invasion. In 2024, a record number of new parks were registered - 31 (previously, the largest number was registered in 2017 and 2023 - 13 each). 60% of these parks are located on greenfield sites (clean fields), and 40% - on brownfield territories (former industrial zones that are getting a second life).
As of the beginning of 2025, 100 industrial parks with a total area of almost 3 thousand hectares have been registered in Ukraine, which is almost equal to the area of Zhytomyr region. 12 factories have already been built on the territory of the registered parks, and 13 are under construction. 8% of industrial parks were created in the field of agroprocessing, 4% - mechanical engineering, 3% - woodworking, and the majority (61%) are universal.
Of the registered parks, two are located in the Donetsk region, which is currently a zone of active hostilities, and one — in Luhansk — is under temporary occupation.
Not all registered parks are actually operational, that is, they have a management company, engineering networks, at least one constructed facility, and at least one operating enterprise. In 2024, the share of operating parks was 30%, which is significantly better than the pre-war figure of 7,5%.
In addition, an industrial park can be excluded from the register. This mechanism appeared in 2021. The grounds for this are: the absence of a management company within two years from the date of registration of the park, failure to submit reports to the Ministry of Economy twice in a row, and if none of the park participants has started operations within three years.
However, exclusion from the register does not mean the closure of the park - it can continue to operate, but without receiving state benefits. Also, six months after exclusion from the register, the park can reapply for inclusion in the register.
Active work to remove industrial parks from the register began in 2025. In the first four months, 4 entities lost their registered industrial park status, and the government is considering the possibility of removing 15 more parks.
During the Great War, the number of registered industrial parks increased by more than one and a half times. Businesses use them for relocation, create new production sites and attract partners to them. For example, an industrial park relocated from Kramatorsk to the Perechynska community in Transcarpathia in 2023 brought an additional UAH 102 million to the local budget and created more than a thousand jobs.
Another factor in the growth of the number of industrial parks was legislative changes. The 2013 Law "On Industrial Parks" did not provide for real steps to support new facilities. The updated law of 2021 offered a number of incentives for parks. Experts have calculated that thanks to these benefits, an investor can reduce investment costs by 25%, which is an average of UAH 15 million to UAH 60 million in savings when building an enterprise in an industrial park.
State support is intended for both the management company and the enterprises operating in the industrial park. The former receives non-refundable state funds on the terms of co-financing for the development of industrial parks. The latter can count on tax and customs incentives.
However, these incentives began to be provided only in 2024, when the budget for the first time since 2013 provided for financing the infrastructure of industrial parks in the amount of UAH 1 billion. This was achieved thanks to the "Made in Ukraine" program, which is aimed at developing industry in the regions through co-financing the construction and modernization of facilities.
The scheme looks like this: 50% (but up to UAH 150 million) is financed by the state, and 50% by the management company of the industrial park. For deoccupied territories, the ratio is 80% to 20%. In exchange for state support, the management company, under the terms of the Made in Ukraine program and the rules developed by the Ministry of Economy, undertakes to complete the implementation of projects within two years, and over the next three years, to build at least 5000 square meters of industrial facilities at its own expense and attract at least two residents to the park.
Although the co-financing mechanism only came into effect in the summer of 2024, the state has already agreed to support 15 industrial parks in the amount of UAH 1,13 billion. UAH 925 million was allocated in 2024 for 13 parks, and another 2 are awaiting funding in 2025. The funds were allocated for the construction of access roads and railway tracks, the installation of sewage systems, external water and electricity supply networks, as well as connections to electricity networks.
Such financial support is urgently needed, since by the end of 2023, out of 73 registered industrial parks, only 66% had access to roads, 26-30% to electricity, water and gas supplies, and 19% to railway tracks.
For 2025, the government has allocated UAH 500 million in the state budget to stimulate the creation and development of industrial parks.
In addition, by the beginning of 2025, 43% of registered industrial parks received incentives from local authorities - preferential land tax rates or discounts on land lease. This form of support for parks is not mandatory for local communities, but has its advantages. The creation of an industrial park increases the number of jobs for the population and tax revenues to the local budget.
In 2023, the government developed the Industrial Parks Development Strategy for 2023-2030.
Such spending of budget funds may bear fruit in the future. For example, industrial parks generate 22% of China's GDP, over 60% of South Korea's production and exports, and over a third of all Turkey's exports. There are many examples of both successful and unsuccessful industrial parks in the world.
However, the following questions remain fundamental: Why does business not want to come to a particular region without incentives from the state? Will the industrial park have a long-term impact on the region where it is located? Will investments in the industrial park be justified?
Incentives for individual business entities can distort competition and foster corruption. That is why most countries refuse direct budget assistance to industrial parks in favor of advisory support, preferential lease of land or premises, discounts on utility services. Tax incentives are usually limited to tax holidays or exemption from taxes and duties on the import of high-tech equipment.
In Ukraine, industrial parks are at the initial stage of development. According to statistics, in 2022, exports of industrial park products accounted for only 0,0146% of the country's total exports. As of July 1, 2024, 77 industrial parks registered at that time with an area of about 2,3 thousand hectares created 2782 jobs.
This means that each park has an average of 36 jobs, and only 1,2 jobs per hectare, which is significantly less than the 50 jobs per hectare forecast by Economy Minister Yulia Svyrydenko. Since many of the industrial parks registered since the beginning of the full-scale invasion are only expanding production capacity (1 plants are currently under construction), we can expect these figures to increase over time.
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