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Evaluating the efficiency of the privatization of energy companies in the context of balancing the interests of state, business and society

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  • V. Lir

Abstract

The author poses the problem of evaluating the efficiency of the privatization in Ukraine's energy sector in terms of achieving a balance between the interests of the state, business and society. There are data on the condition of the state corporate rights and their capitalization, structural and functional, and institutional characteristics of the stakeholders (on the example of electricity market). The author analyzes the progress of privatization in the electricity sector, defines the features and challenges of each its stage, and presents the structure and dynamics of corporate rights in the energy companies. Provided the results of comparative evaluation of the efficiency of public and private energy companies. It is established that ownership is not the main component among the factors that determine the technical and economic condition of the energy companies. The author defines the factors contributing to the poor performance (for the state and society) of the conducted privatization tenders for the sale of energy assets, including the lack of coordination between the state authorities as to objectives and conditions of the privatization of strategic assets, and uncertainty about the extent of liberalization and protectionism on the energy markets. In general we can say that privatization has not become a powerful investment resource for the development of the electricity sector and for the formation of a competitive electricity market, which created an asymmetry of socio-economic effects between the state, business and society. The author assesses the prospects and risks of further privatization of energy assets in the current conditions in terms of energy and financial security. Based on the investment results, he makes various conclusions and provides recommendations as to further privatization of the energy sector in Ukraine. The article considers the possibilities of a societally just redistribution of the ownership of strategic enterprises in the basic industries of Ukraine's economy.

Suggested Citation

  • V. Lir, 2015. "Evaluating the efficiency of the privatization of energy companies in the context of balancing the interests of state, business and society," Economy and Forecasting, Valeriy Heyets, issue 1, pages 7-22.
  • Handle: RePEc:eip:journl:y:2015:i:1:p:7-22
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