Dmitro Natalukha, head of the State Property Fund, described in an interview with LIGA.net an idea that in ordinary times would be called technical: issuing government bonds backed by future revenue from subleasing of agricultural land.

"The state owns hundreds of thousands of hectares. They are partially or fully transferred for long-term sublease after a transparent auction process. We have an idea of how to link these thousands of hectares to such financial instruments as government bonds".

— Dmitro Natalukha, head of SPFU

What land is this and how much does it already bring in

The State Land Bank — a 100% state-owned enterprise under SPFU management — transfers agricultural land for sublease through online auctions on Prozorro.Sales. In its first year of operation, agrarians paid over 1.34 billion hryvnias for the use of 69,879 hectares in 19 regions, with 1,133 deals concluded. By the end of 2025, the bank entered the list of major taxpayers and transferred 369 million hryvnias in dividends to the state budget — 95% of net profit.

A characteristic example of scale: in May 2025, the largest plot — 3,969 hectares — went into sublease for 78.6 million hryvnias per year. At the auction, the price increased almost five times from the starting price.

How this differs from regular government bonds

A regular government bond is backed by the general creditworthiness of the state. A bond tied to a specific cash flow — rental payments from designated plots — is asset securitization: an instrument standard for the mortgage market, but almost unused for state land. Its logic: an investor knows not only "the state will pay," but "these specific fields generate X hryvnias annually, and they are what backs the coupon".

The OECD in its review of Ukraine's agricultural policy for 2025 notes that the country has already introduced electronic agricultural receipts as a new financial instrument to expand lending to producers — meaning the shift toward non-standard agrofinancial instruments is proceeding on a broader front.

Where the bottleneck is

Publicly, the mechanism exists so far only as an "idea" — without a legislative framework, rating of individual tranches, audit of cash flows by plot, or definition of potential buyers (domestic market, international investors, institutional reconstruction funds). The State Land Bank is simultaneously solving a completely prosaic problem: some of the transferred land requires demining, and the bank has already allocated resources for this task to "unblock thousands of hectares" — meaning the real asset base for bonds is still being formed.

• Potential asset — hundreds of thousands of hectares, but some remain off-market due to mine contamination
• Projected cash flow in the second year of sublease — over 1.34 billion hryvnias, and it is growing
• Legal form, rating and target audience of investors — not publicly defined

The global context does not simplify matters: researchers note growing interest from Western funds in Ukrainian agricultural assets, which turns any new instrument into a sensitive issue — who ultimately bears the risk and who receives the income.

If the SPFU publishes a prospectus with specific plots, cash flows and a mechanism to protect against tenant default — the instrument has a chance of attracting institutional reconstruction investors. But if details remain vague until the market launch, land bonds risk repeating the fate of many "SPFU ideas": a loud announcement and quiet stalling in regulatory corridors.