- Clearstream to Allow Worldwide Desktop Trading of Ukraine Bonds
- Nibulon Launches Largest Ship of Independent Ukraine
- Ukraine to Top Russia as No. 1 Grain Exporter
- Russia’s Energy Supplier Rep Dims
- Kyiv Sikorsky Doubles Main Terminal
- Israeli to Build 8-Story Hotel at Boryspil
- Political Turmoil, Exchange Rate Serene
- Air France To Suspend Flights from Paris
- Green Light for Skyscrapers in Ukraine
- DTEK Wants Private Freight Trains
- Oslo-Kyiv Flights to Return
- Poroshenko Signed Green Auction Bill for Solar, Wind Energy
- With Emigration Growing, Zelenskiy Appeals: Come Home
- 5G Mobile to Start Next Year
- First Tenders for Public-Private Partnerships by June
On Monday, Clearstream, the international securities depository of Deutsche Börse Group, connects to Ukraine, making all Ukraine government hryvnia bonds tradable be desktop traders around the world. Citibank will act as cash correspondent bank and local operator of Clearstream’s account at the National Bank of Ukraine. The Finance Ministry says the link will increase demand for Ukraine government bonds.
Expecting a boom with Clearstream, foreign investors increased their holdings of Ukraine bonds six-fold this year, to $1.5 billion. With foreigners holding only 5% of this debt, investment is expected to grow. Oleg Churiy, the central bank’s deputy governor, predicts: “Creating easy access for foreign investors to Ukrainian government securities will foster long-term investments in hryvnia instruments, reduce the state’s need for financing in foreign currency and respectively currency risks.”
Nibulon launched Wednesday the largest ship made in independent Ukraine – a 140-meter long loading ship designed to move grain from Dnipro river boats to ocean-going Panamax freighters in the Black Sea. When fully completed four months from now, the Nibulon Max will have two German-made Liebherr grab cranes capable of moving 18,000 tons a day. With the autonomy of working offshore for 90 days at a time, the ship will help Nibulon’s 75-ship fleet double its annual cargo handling to 5 million tons, the company says. Launched from Nibulon’s shipyard in Mykolaiv, the ship was partly funded by loans from the EBRD, the European Investment Bank and the International Finance Corporation.
Ukraine is on track to top Russia as the world’s largest grain exporter in the marketing year that ends June 30. As of Wednesday, Ukrainian farmers have exported 45.4 million tons of grain, reports Ukraine’s Agrarian and Food Policy Ministry. This year, Ukraine expects to export 49 million tons. Russia forecasts exports of 44-46 million tons. Last year, Ukraine exported 39.9 million tons and Russia exported 43 million tons.
Air travelers at Kyiv Sikorsky start using a $24 million expansion of the airport’s main terminal. The expansion doubles checkin counters and passport control booths, allowing the airport to handle 1,000 passengers an hour. Widely known as Zhuliany, the airport is Ukraine’s second busiest, after Kyiv Boryspil. A hub for Wizz Air, the airport saw its traffic grow by 52% last year. During the first quarter of this year, traffic was up 44% q-o-q, to 638,100.
Denis Kostrzhevsky, co-owner of Master-Avia, the airport leaseholder, tells reporters he lobbies for a $100 million public-private project to expand the single runway by one quarter, to 3,000 meters. This would be long enough to handle Wizz Air’s new Airbus A321 jets.
Israeli developer Ofer Kerzner is to start building this year an 8-story, 264-room hotel near Kyiv Boryspil’s Terminal D, Georgy Zubko, the airport’s deputy director for development, tells reporters. Owner of property development company City Capital Group, Kerzner built Art-Zavod Platforma, recycling a former weapons plant into a popular cultural center.
Foreign and national air freight companies are interested in a public private partnership to build a new cargo terminal for Boryspil, Zubko said. The Infrastructure Ministry’s competition will launched this summer, too late for completion in time for the Christmas/ New Year’s seasonal surge in packages. Last season, the airport outraged shipping companies by closing Boryspil to cargo for 10 days. Even without a new cargo terminal, officials say new cargo tracking software and modernized logistics will allow them to handle this year’s crunch.
Next to Boryspil’s increasingly popular ‘Train to the Plane’ rail station, airport officials plan to build a $1 million covered bus station. With 16 bus platforms and capacity for 300 passengers an hour, the station would make air travel easier for residents of regions surrounding Boyspil. The airport accounts for two thirds of Ukraine’s air traffic.
Why did President Zelenskiy’s dismissal of the Rada and Prime Minister Groysman’s surprise resignation have zero impact on the hryvnia/ dollar exchange rate? “For the stability of the hryvnia, we must thank the multi-million army of Ukrainians who have left for work in different European countries,” economist Andrei Starovoitenko tells Glavred, citing the estimated $1 billion in worker remittances injected into Ukraine’s economy monthly. The 26.3 hryvnia to the dollar exchange rate changed little in the last week. Through the presidential campaign and handover, Ukraine’s currency appreciated 5.5%. Analyst Alexander Okhrimenko tells Glavred that Ukraine’s “politics are [now] outside the economy.”
Air France joins British Airways as the second European flag carrier to announce this week that it will suspend flights to Ukraine. This winter, from Oct. 27 to March 28, Air France will suspend its Paris Charles de Gaulle – Kyiv Boryspil flights. Flights are to resume March 29, with the current twice a day frequency. Air France and UIA face new discount airline competition on the Paris-Kyiv route. One month ago, French carrier Aigle Azur started flying between Kyiv Boryspil and Orly. On June 11, Ukraine’s SkyUp starts flying between Kyiv Boryspil and Paris Charles de Gaulle.
Last week, British Airways announced it will end flights between London Heathrow and Kyiv Boryspil on Oct. 3. Facing competition from Ryanair and Wizz Air, British Air said its flights to Kyiv are “no longer commercially profitable.”
In his second visit to Ukraine in six months, Perry met Monday evening with President Zelenskiy and Naftogaz CEO Andriy Kobolyev to discuss ways for Ukraine to get through next winter in the event of Russian gas shut off on Jan. 1. Both sides discussed promoting foreign investment in gas production, financing of gas stocks prior to the winter, and building “a permanent path of import of liquefied natural gas through the re-gasification terminal in Poland to Ukraine,” reports Naftogaz. Perry was joined by Kurt Volker, Washington’s special envoy for Ukraine, and US Senator Ron Johnson, Republican of Wisconsin, a prominent sanctions backer.
An IMF review mission started work in Kyiv on Tuesday, meeting with outgoing Prime Minister Groyman and Finance Minister Oksana Markarova. On Monday, President Zelenskiy asked the Rada to approve a new law against illegal enrichment, a key IMF demand prior to approving a second tranche. Analysts predict this tranche, probably for $1.3 billion, would only be disbursed after the July 21 Rada elections. After these elections, Ukraine could start negotiating a new program with the IMF, Oleg Ustenko, a Zelenskiy advisor tells Interfax-Ukraine.
The EBRD is moving toward loaning €250 million to Ukrainian cities to modernize mass transit systems. On July 24, the EBRD board of directors is to review the project. It would largely involve paying for new buses, trolley buses, trams and subway cars. “The EBRD will sign loan agreements with relevant utilities transport companies, as well as agreements on guaranteeing and supporting projects with the cities,” the EBRD writes. “Each loan will be guaranteed by the municipality.”
This summer, anti-dumping duties are to go on imports to Ukraine of cement from Russia, Belarus and Moldova. Scheduled to last for five years, the duties, as a percent of value, are: 115% for Russia; 94% for Moldova; and 57% for Belarus. Separately, virtually all cement imports from Russia are banned starting Aug. 1, reports Economic Development and Trade Ministry.
Betting on the future of cement, Concorde Capital has bought HeidelbergCement Ukraine. On May 14, Overlin Limited, a Cyprus company associated with Concorde, bought 99.8% of the Dnipro unit of the German building materials company.
Height restrictions on new buildings are being increased by 50%, to 150 meters, or 50 stories, Lev Partskhaladze, deputy minister of Regional Development, Construction and Housing, writes on Facebook. Design requirements for tall buildings are being adopted. Ukraine’s tallest building, Klovski Descent 7A in Kyiv is 48 stories high. The two runners up, both in Kyiv, are: Gulliver – 35 stories, and Parus – 34 stories.
Pushing the boundaries of the state rail monopoly, DTEK Holding proposes using one of its leased Estonian locomotives to move cargo down a 69-km stretch of Ukzraliznytsia track between the Zaporizhzhya Thermal Power Plant and Tavriches station. SCM’s Lemtrans, owner of 20,000 cargo wagons, has leased several locomotives to use on internal company tracks. Infrastructure Minister Volodymyr Omelyan has promised to start a pilot project with private locomotives this year.
Suspended for five years, Oslo-Kyiv flights return this fall with SAS Airlines flying three times a week from Norway’s capital to Kyiv Boryspil. “This decision is another reflection of the significant strengthening of Ukrainian-Norwegian relations in recent years,” Vyacheslav Yatsyuk, Ukraine’s ambassador to Norway, said of the flights which start Oct. 26. Dispensing with stopovers in Copenhagen or Stockholm, SAS will fly directly, making the 1,660 km trip in 2h45 minutes.
Hours before the inauguration, then-President Poroshenko signed into law the bill providing for the transition from ‘green’ tariffs to auctions for renewable energy facilities commissioned next year. The move came after ‘green’ energy accounted for 2% of energy produced in 2018, but 8% of the nation’s electricity bill. In the new law, the solar tariff drops next year by 25%, followed by an annual 2.5% decrease for three years. For wind, the tariff drops by 10%. The auction regime, which is to start July 1, is to work in parallel with the ‘green’ tariff regime.
Estimating that one third of the 65 million people born in Ukraine now live outside the country, Zelenskiy appealed in his inaugural address: “We really need you. To all who are ready to build a new, strong and successful Ukraine, I will gladly grant Ukrainian citizenship. You must come to Ukraine not to visit, but to return home. We are waiting for you. There is no need to bring souvenirs from abroad, but please, bring your knowledge, experience and values.”
The appeal comes as emigration looms as a problem for the 2020s.
EU competition for Ukrainians workers is expected to increase, according to “Losing Brains and Brawn: Outmigration from Ukraine,” a Kennan Institute Focus Ukraine blog by Denys Kiryukhin. After aggressively recruiting ethnic Hungarians from Zakarpattia, he writes: “It’s likely that the Hungarian authorities will ease immigration laws for migrants from Ukraine instead of opening borders for Middle Eastern and North African refugees.”
Germany is expected to compete with Poland for Ukrainian workers in the 2020s. To hire skilled non-EU workers, Germany’s Skilled Labor Immigration Act is to start in early 2020, according to Deutschland.de, a government information site. “Currently around 1.2 million [German] job places are unfilled,” the site reports. “A new law is therefore intended to open access to the German labour market for skilled workers from countries outside the EU. It is an immigration law…skilled workers are welcome to stay.”
No longer will the Federal Employment Agency have to check if there are suitable German or EU applicants. Priority will be given to graduates of overseas German language – PASCH – schools. Ukraine has 46 of these German government accredited schools, the fifth largest number in Europe, after Poland, Croatia, Romania and Hungary.
5G mobile service should start next year in Ukraine, according to a decree signed Friday by President Poroshenko. The decree sets a schedule for releasing the necessary frequencies. Separately, Oleksandr Zhyvotovsky, head of the National Commission for Communications Regulation, writes on Facebook that this work will be done by fall. The Rada will have to pass implementing legislation.
Given Ukrainians’ low cell phone bills, construction of 5G would take “decades” to pay off, warns Oleksandr Kohut, director of regulator support for Kyivstar, the nation’s biggest mobile phone company. “Implementation of 5G could require the purchase of a large number of frequencies, the costs of which, given the subscriber’s low mobile check and investment risks, could be paid back in decades,” he tells Interfax-Ukraine. “It is necessary to create conditions for improving the country’s economy, reducing tax pressure on the industry and adapting it to European regulatory practices.”
One year after the launch of 4G, about half of Ukrainians have access to the fast service, according to separate reports from the nation’s two largest mobile phone companies, Kyivstar and Vodaphone. Kyivstar, which has 26.4 million subscribers of all levels of service, plans to invest about $110 million a year through 2022 to expand 4G service, Alexander Komarov, company president, told reporters recently. By comparison, Vodaphone has about 20 million subscribers of all service levels.
Tenders for Ukraine’s first two big public-private partnerships – Kherson and Olvia Ports – are to be launched by the end of June, reports the Infrastructure Ministry. Both ports are located 15 km from the Black Sea – Kherson on the right bank of the Dnipro, and Olvia on the left bank of the Dnipro-Bug estuary.
The winner of the 35-year concession at Olvia is expected to invest $650 million to develop of the port, starting with construction of a grain terminal capable of handling 2 million tons a year, reports InfraPPP news site. The 30-year concession of Kherson requires investment of $53 million. The EBRD, World Bank and International Finance Corporation have worked with Ukraine to write feasibility studies for international standard public-private partnerhips.
Looking ahead, Infrastructure Minister Volodymyr Omelyan is working with the International Finance Corporation to develop concessions to manage airports – possibly Kyiv Boryspil or Lviv, with two or three regional airports. In addition, the government is talking about concessions for management of rail stations and for construction of highways. If there are no early Rada elections, most current ministers are expected to remain in place until the end of this year.
Omelyan is asking the Rada to put an additional $2 billion in the government’s 2020 budget to continue systematic repair and rebuilding of major roads connecting the 24 regional capitals. Noting increased roadwork this year, he said: “It is possible to repair 10,000 kilometers a year.” Prime Minister Groysman has set a national goal of connecting all regional capitals with ‘high-quality’ roads by the end of 2021.
The original English version is from our partner UBN – Ukraine Business News. For more information and news archive, go to: www.ubn.news.