Ukraine Business News, Tuesday, May 28






  • 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 GaulleKyiv 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 toLosing 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, 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:


HWC at the Charity Run in Kyiv

As part of our CSR activities, some of our employees took part in the 27th Kyiv Chestnut Run for charitable purposes.

This year the proceeds will be used for necessary equipment and medical aids for the Scientific and Practical Medical Center of Pediatric Cardiology and Cardiac Surgery MoH Ukraine.


Vienna, May 20, HWC Partner Sven Henniger, Host of the Panel “Legal, Tax and Financial Aspects of Doing Business in Ukraine” at the Ukraine Forum





On 20 May, the Austrian Federal Economic Chamber (WKO) in cooperation with The Ukrainian Chamber of Commerce and Industry held the UKRAINE FORUM at the premises of WKO in Vienna.

After opening words held by Richard Schenz, Vice-President, WKO, Valeriy Korol, Vice President, Ukrainian Chamber of Commerce and Industry and  H.E. Oleksandr Scherba, Ukrainian Embassador to Austria the „Latest developments in agriculture and food industry in Ukraine” where presented by the deputy of Olga Trofimtseva, Acting Minister of Agrarian Policy and Food of Ukraine.

The opening was followed by an roundup about the “Economic situation and business conditions in Ukraine” held by Gabriele Haselsberger, Head of Advantage Austria, Kyiv, followed by an Practice Panel: “Doing Business in Ukraine & trends in key sectors“ moderated by Gabriele Haselsberger with the following speakers and topics

Industrial Modernization

Robert Reisebauer, VP Sales & Marketing Ukraine, Primetals Technologies Austria GmbH

Ukraine’s Untapped Agricultural Potential

Ursula Bittner, Secretary General and Spokesperson, Donau Soja

Real Estate, New Working Environments & Digitalization

Wolfgang Gomernik, CEO, Delta Holding, CEO & Partner Delta Ukraine

Tourism Development

Christopher Hinteregger, Managing Director, PKF tourismexperts

Dr. Michael Angerer, Regional Manager Eastern Europe/ Central Asia, Aussenwirtschaft Austria, Austrian Federal Economic Chamber was the host for the Panel „Regions of Ukraine Present their priorities communal infrastructure projects” with the following speaker:

Economic development of Ukrainian regions

Gennadiy Boldyr, Director for International Relations, Ukrainian Chamber of Commerce and Industry

Sumy Region

Mykola Klochko, Head of Sumy Regional State Administration

Lviv Region

Markian Malskyy, Austrian Honory Consul in Lviv, Partner, Law Firm Arzinger

Khmelnitskyi Region

Nataliya Bielyakova, President, Khmelnitskyi Chamber of Commerce and Industry

Our Partner at Henniger Winkelmann Consulting (HWC LLC), Kyiv, Sven Henniger was the moderator for the last Panel “Legal, Tax and Financial Aspects of Doing Business in Ukraine”.

Andreas Kettlgruber, Head of Cross-Border Business Management, Raiffeisen Bank International (RBI) provided a presentation about the current Macroeconomic Situation in Ukraine.

With Andreas Kettlgruber, Markian Malskyy, Partner Arzinger Law Firm, and Wilfried Serles, Managing Partner IB Interbilanz, Sven Henniger discussed the current legal framework and challenges, such as the relatively new LLC Law, Language Law, Judicial Reforms and fighting Corruption and the upcoming changes at the Renewable Energy Law. Followed by the tax and financial topics, recent changes in the area of currency control, the currency stability in Ukraine, FX Headging possibilies, the current tax environment in Ukraine and still existing burden of doing business in Ukraine.

The whole event was closed with a Networking-Cocktail and a B2B Meeting. Around 150 participants used this great opportunity to get informed about the legal, tax and financial framework of Ukraine and some practical points of doing business in Ukraine.

Many thanks to Dr. Michael Angerer and Gabriele Haselsberger and their Teams for the well organized event and the opportunity to be as a Moderator a part of this event.


Ukraine Business News, Tuesday, May 21





  • Hryvnia Bond Fan Club Expands
  • Ukrposhta’s Maidan HQ: A Hotel?
  • Flights Return to Uzhgorod June 3
  • Ukraine Slaps Import Duties on Russian Imports
  • Exports to EU Grow
  • Half of Rail Stations Generate 2% of Revenue
  • FT: Kyiv, Lviv Are Cost Effective “Smart Locations
  • UIA Doubles Flights to Canada
  • Kyiv to Start Towing Illegally Parked Cars
  • IMF Arrives today
  • Exports Through Sea Ports up 20%, River Traffic up 60%
  • Slovakia Upgrades Rail Links with Ukraine
  • USDA: Ukraine To Match Last Year’s Record Grain Harvest
  • Marketers Needed to Promote Processed Food on World Markets
  • China-Ukraine Jets Fly Full

By using presidential powers, Zelenskiy plans to take “very concrete steps” in coming days to fight corruption, Oleksandr Danylyuk, his chief economic advisor, told Concorde Capital’s international investment conference Thursday. These include: relaunching the National Agency on Corruption Prevention; making the new High Anti-Corruption Court “operational as soon as possible”; winning Rada approval for a new law on criminal responsibility for illicit enrichment; and “protecting whistleblowers on corruption.”

DTEK’s energy holding has purchased controlling interests in two of Ukraine’s largest power generation companies, Odesaoblenergo and Kyivoblenergo, the company tells Interfax-Ukraine. The companies were bought from VS Energy International NV.

Naftogaz sees September as the earlier date for going into the Eurobond market, Kobolyev told the Concorde Capital conference. First, the state energy company wants to see the level of demand and prices for a Eurobond launch planned by the Finance Ministry by mid-June. Noting high foreign demand for hryvnia treasury bonds, Kobolyev said local bonds could be a good source of financing.

The recent jump in foreign purchases of hryvnia bonds also has caught the eye of Ukrzaliznytsia, the state railroad.We are seeing a high level of interest, a lot of activity on this instrument from the Ukrainian and international players,” Yevhen Kravtsov, CEO of UZ, said at the Concorde conference. Referring to issuing Eurobonds and borrowing money from EBRD and EIB, he added: “Our strategy is to use such a mix and continue to replenish our portfolio with hryvnia instruments.”

The International Finance Corporation carried out its debut issue of hryvnia bonds, denominated at 15.75% per annum, to support its operations in Ukraine. The bonds were issued Monday, redeemable in 2020, said Jason Brett Pellmar, IFC manager for Ukraine, Moldova and Belarus. IFC, a World Bank unit, has a AAA rating.

Ukraine’s Central Post Office, a Stalinist landmark on Kyiv’s Maidan, should be sold, possibly for use as a hotel, recommends Igor Smiliansky, director of Ukrposhta. Noting that he rents out street level space in the building to Rozetka, the e-commerce company, and to Pf Retail LLC, a Vodafone Ukraine unit, he says the historic post office wastes space and slows mail delivery when demonstrations block the Maidan. Offering opportunities to real estate developers, he says post office sorting centers should move from traditional locations near rail stations to suburban locations near ring roads. Near train stations, “you can open wonderful offices and hotels – there is absolutely no need for Ukrposhta trucks to go there and clog traffic,” he told reporters Thursday while presenting the state postal company’s annual report.

In June 3, Motor Sich Airlines resumes Kyiv-Uzhgorod flights, says Mikhail Rivis, head of Zakarpattia’s regional council, according to The flights are to be direct, on Mondays, Wednesdays and Fridays, and coordinated with Motor Sich flights from Kyiv Sikorsky to Odesa. With an eye to the start of the tourist season, the Zakarpattia council decided on an unspecified “mechanism of financial support for the flight.”

A four-year, $90 million road safety program is start this summer in Kyiv. Features are: more traffic lights and crackdowns on speeders, drunk drivers, and driving without seatbelts. Coping poorly with a growing number of cars, the capital has seen a 48% increase in the number of road traffic deaths since 2016, the city reports. Separately, the Rada voted Thursday to delay for 90 days, until Aug. 24, the imposition of fines on the owners of illegally imported cars from the EU. Fines will be as high as $6,400.

Accelerating Ukraine economic divorce from Russia, Ukraine imposes a new duty on most imports from Russia, starting Aug. 1. The unspecified duty, levied as a percentage of value, will apply to all imports, but five exceptions considered strategic: anthracite coal, coking coal, gasoline, liquefied gas and pharmaceutical drugs. In addition, the Cabinet of Ministers banned all imports of cement and plywood from Russia – $37 million of goods last year. The Economic Development and Trade Ministry backs a wider import ban on Russian industrial goods, fertilizers, food and vehicles. Prime Minister Groisman told the Cabinet: “We will impose an embargo on goods that we produce today or that we can replace.” The new duty and bans come as Ukraine’s trade deficit with Russia grew last year to $4.4 billion, 38% of Ukraine’s overall trade deficit. Revenue generated from the new import duties are to go to a new fund for “import substitution” investments, Ukraine’s Cabinet of Ministers said. The decision also comes two weeks before Russia imposes a series of restrictions on exports – largely energy products – to Ukraine.

During the first quarter of this year, Ukraine’s overall trade deficit increased by 13%, compared to Q1 2018, to $1.5 billion, the State Statistics Service reported Wednesday. Exports were up 7.4%, to $12.3 billion. Imports were up 7.9%, to $13.7 billion. The EU took 43% of Ukraine’s exports of goods and one third of its exports of services in the first quarter, the State Statistics Service reported Wednesday.

Sales of food to the EU increased by 24% during the first quarter. Exports hit $1.9 billion, giving Ukraine a surplus of $1.1 billion, according to Mykola Pugachev, deputy director of the Institute of Agrarian Economics. By April 1, Ukraine had fully used its annual EU quotas for honey, corn, sugar, apple juice and grape juice. Separately, Hugues Mingarelli, EU ambassador to Ukraine, told a conference in Kyiv on Wednesday: “I hope that there is an opportunity to discuss the issue of quotas, especially in agriculture.

European farmers alarmed over EBRD’s loan to MHPheadlines GlobalMeatNews about European Bank for Reconstruction and Development approval of a €100m loan to the Kyiv-based poultry giant to acquire Slovenian poultry processor Perutnina Ptuj. European poultry farmers complain to Brussels that MHP is using a legal loophole to flood the EU with their breast fillets. MHP says its exports were up 47% Q1-o-Q1, to 93,000 tons. It does not say how much went to the EU.

Half of Ukrzaliznytsia’s stations generate only 2% of its revenue, a rail executive says as part of a campaign to pressure local governments to save 300 underperforming freight loading stations. About 46% percent of the network’s 1,700 stations and halts cost $300 million to service, but generate only $20 million in revenue, says Andriy Ryazantsev, finance director of the state railroad. The world’s seventh largest rail freight transporter, Ukrzaliznytsia has 23,000 km of track.

Twenty EU-Ukraine projects in the Danube river corridor were approved by the Cabinet of Ministers Wednesday under the EU’s Danube Transnational Program. With €5 million in seed money, the projects in transportation infrastructure, energy, environment and tourism are to benefit communities of Zakarpattia, Ivano-Frankivsk, Chernivtsi and Odesa regions.

In a worldwide ranking of ‘cost effective cities’ for foreign investment, Kyiv came in fifth and Lviv came in eighth, according to fDi Intelligence, a Financial Times unit. In this annual ‘smart locations of the future’ survey, the two Ukrainian cities made the top 10 ranking in the category of ‘cost effectiveness.’ Kyiv came in after Skopje, Sofia, Kaunas and Gdansk, rated on such criteria as: cost per square meter of class A office space, wages of skilled workers, price of hotel rooms, tax rate on profits, cost of setting up a company, registering property rights, and connecting to electricity grids.

President-elect Zelenskiy told executives of foreign banks Tuesday that Ukraine’s macroeconomic stability depends on an independent central bank, continued cooperation with the IMF and following sound financial policies, his press service reports. Judicial reform and protection of the rights of investors and creditors are cornerstones for economic growth and attracting foreign investment, he said. Talking to the bank executives, largely Ukrainians, he said: “Reducing interest rates will be a boost to economic growth. For now people are scared and do not trust the banks.Joining Zelenskiy were: Aivaras Abromavicius, Oleksandr Danylyuk, Andriy Bogdan, Ivan Bakanov, Victoria Strakhov. Banks participating were: Alfa Bank, Citibank, Credit Agricole, Credit West, Deutsche Bank, Piraeus, Pravex Bank Intesa Sanpaolo, ProCredit Bank, Raiffeisen Bank Aval, SEB, and Ukrsibbank BNP Paribas.

Lviv is taking steps to win a €50 million loan to buy 100 electric trolley buses and to modernize the city’s 210 km of electrified routes for trams and trolley buses. On Monday, the Lviv City Council a letter of intent to take the loan from the World Bank’s International Finance Corporation on concessional terms – an interest rate around 5%, 13-year repayment period, and a 3-year grace period. A tender for the buses is to made public later this year, with the goal of receiving buses next year. The City Council calls the loan “one of the largest in the history of attracting funds from an international institution to the development of the city.”

UIA starts to double the frequency of its Kyiv-Toronto flights, to four a week. A third Wednesday flight started last week. A fourth, Thursday flight, starts on June 13. Eying profit in long haul routes, UIA President Yuri Miroshnikov tells avianews that later this year, he would like to start a direct flight from Kyiv Boryspil to Guanzhou or Shanghai.

To ease train travel to Ukrzaliznytsia’s new top international destination, tickets for all trains to Poland may be bought online, starting today, Yevhen Kravtsov, the railroad’s CEO writes on Facebook. The railroad also is working on online bookings for auto transportation by train. Meanwhile, passengers traveling to CIS countries, including Russia, may pay for tickets on line, but they have to pick up paper tickets at rail stations.

To change the face of Kyiv from ‘post Soviet’ to European, Mayor Klitschko plans to start towing illegally parked cars next month. A team of parking inspectors has been hired and trained, he tells Interfax-Ukraine. “We will tighten the screws on parking issues – it will be expensive to park illegally, especially in the city center,” said the Mayor of a city where drivers enjoy free parking on sidewalks. Without fines and towing, public garages sit half empty. To cut the number of cars going into the center, Kyiv is building parking lots near key metro stations.

The IMF review mission arrives in Kyiv today and will work here for two weeks, says Mikhail Dovbenko, a Rada finance and banking committee deputy chairman. A favorable review should lead to disbursement this summer of a $1.3 billion loan tranche from the IMF – and unlock more loans on concessional terms from other international financial institutions.

Exports through Ukraine’s ports were up by 20% from January to April, compared to the first four months of last year. Imports and transit cargo were down, making for an overall cargo increase of 12%, to 49 million tons. Containers were up 19%, iron ore up by one quarter and grain up by one third. Confirming the trend toward bigger ships, the number of cargo ships docking at Ukrainian ports was down 1%, to 3,787. Winners were: Yuzhne, with cargo handling up 20% to 15.5 million tons; Mykolaiv up 20% to 10.7 million tons; and Chornomork up 21% to 8.4 million tons. Losers were: Odesa up only 5.5% to 8 million tons, slipping to fourth place nationwide. The two Azov seaports saw cargo diverted to Mykolaiv to avoid delays caused by Russian ‘inspections’ of ships serving Ukrainian ports.

Dnipro river cargo is up 60% through April, compared to the same period last year. The surge in cargo, to 2 million tons, is due to three factors: a mild weather allowing an early start to the river shipping season; last year’s bumper grain harvest straining trucks and trains; and Nibulon’s investment in river ports and barges. Grain cargoes nearly tripled, to 1 million tons. Construction cargo and metal products doubled.

In the latest use of EU gauge tracks dating back to the Hapsburg empire, Slovakia and Ukraine start direct service June 9 between Košice, Slovakia and Mukachevo, Zakarpattia. Running twice a day along a 146 km route, the trains will cut travel time by 40%, to four hours, reports Britain’s Railway Gazette. The trains will be jointly operated by ZSSK, Slovakia’s state passenger rail company, and Ukrzaliznytsia. Six months ago, using the same EU gauge tracks, UZ started a dedicated Mukachevo-Budapest train.

Separately, after a seven-year break, ZSSK restores service June 9 to a 26 km local route in eastern Slovakia. Running four times a day from Bánovce nad Ondavou, the trains will end at Veľké Kapušany, five km west of Ukraine’s border, near Uzhgorod.

Former Finance Minister and current Zelenskiy advisor Oleksandr Danylyuk tells that top priorities of Zelenskiy’s first 100 days will be torestart the anti-corruption bodies” and “restart the recruitment and certification of judges.” Other priorities will be to reform the State Security Service, or SBU, to eliminate the Tax Police, and to create the Financial Investigation Service.

Judging by spring plantings and favorable weather, Ukraine will export slightly more grain next year than its forecast record 50.4 million tons of exports for this year, predicts the US Department of Agriculture. Bolstered by a record harvest last fall, Ukraine exported 43.5 million tons of grain and legumes as of Friday – 25% more than this time last year. The marketing year ends at the end of next month.

Looking at this year’s harvest, the USDA predicts that wheat exports will be up 15%, to 19 million tons. Corn exports will recede 8.5% from their record level, to 27 million tons next year. Barley exports will be 4.5 million tons, almost the same as this year. Overall, grain exports will be 50.7 million tons, 300,000 tons over this year. The harvest will slightly surpass last year’s record, hitting 72.1 million tons, up 3% over last year, the USDA says.

With the EU predicting its lowest harvest of rapeseed in five years, Ukraine’s strong crop could fill the gap, Bloomberg reports. Known for fields of bright yellow flowers at this time of year, rapeseed is crushed for cooking oil and marketed as canola. The EU has cut its official production forecast to 19.2 million tons. But one British oilseeds trader interviewed by Bloomberg predicts EU production will fall below 18 million tons. Ukraine and Australia will fill the EU production shortfall, the USDA predicts.

To shift from global breadbasket to global supermarket, Ukraine has to train world class marketers and open its promised Export Credit Agency to provide risk insurance for processed food exports, according to analysis by Yelizaveta Dorontseva of UNIAN. Last year, commodities accounted for 80% of Ukraine’s $19 billion in food exports, according to the Ukrainian Club of Agrarian Business.

Butter, honey, and soybean oil offer the best prospects for export as processed, pre-packaged products. With food exports growing every year since 2015, Ukraine has done a good job in diversifying from its historic reliance on Russia, UNIAN says. Since 2014, Ukraine’s food exports to China have increased nearly seven times. Last year, Ukrainian producers opened 85 new foreign markets for their products.

Oleh Bakhmatiuk owner of Avangard Holding, one of Ukraine’s largest egg producers, tells UNIAN that after losing assets in Crimea, Donetsk and Luhansk in 2014: “We decided to reorient ourselves to foreign markets. We export our products to Iraq, the UAE, Qatar, Saudi Arabia, Bahrain, Kuwait, and Hong Kong. Now we plan to enter the market of Singapore, and about 20 African countries.”

UIA’s Kyiv-Beijing flight makes a 4-hour detour around Russia, costing Ukraine’s flag carrier $120,000 extra for each flight, says Pavel Ryakivin, general director of Kyiv Boryspil, UIA’s hub. Infrastructure Minister Volodymyr Omelyan tells Interfax-Ukraine he is looking for a ‘non-discriminatory mechanism’ to compensate Ukrainian carriers hurt by Russia’s overflight ban.

The daily Kyiv-Beijing flight run at 95% occupancy and SkyUp’s new flight from Kyiv Boryspil to China’s Hainan resort island runs at 97% occupancy, Omelyan’s deputy, Viktor Dovhan, writes in the Kyiv Post. He says China-Ukraine air passengers traffic hit 200,000 last year, double the level of 2015. With Chinese now eligible for Ukraine’s e-visas, air passenger growth with Ukraine is expected to keep growing at 25% a year.


The original English version is from our partner UBN – Ukraine Business News. For more information and news archive, go to:


Ukraine Business News, Tuesday, May 14





  • Arcelor to Invest $350 million in Steel Production
  • Zelenskiy Vision: ‘State in a Smartphone’
  • Targeting Migrant Workers, Ryanair Unveils More Ukraine Flights to Germany, Poland
  • Food Export up $1 billion in Q1
  • Limits on Dividend Remittances Nearly Double
  • Reuters’ Analysts: More Interest Rate Cuts This Year
  • With Bond Rates Double Inflation, Foreign Buyers Abound
  • Outgoing Korean Ambassador Says Hyundai To Bid on Kharkiv Metro
  • Used Imports Flood Car Market
  • Kolomoisky Airline Wins Odesa-Tel Aviv Route
  • VR Capital Invests in Ukraine Solar
  • GDP Growth dips to 2.4%
  • 5G Auctions Next Year
  • Azeri, Kazakh Airlines Profit from Russia’s Ban on Ukrainian Overflights
  • 25-Year Growth Plan for Boryspil

Ukraine’s largest integrated steel maker, ArcelorMittal Kryviy Rih, will reinvest its entire 2018 profits – $350 million – into upgrading production, the company reports. The decision was taken at the company’s annual general meeting of shareholders on April 25.

Poland displaced Russia as the top buyer of Ukrainian goods, as Ukraine’s trade with Russia dropped 11% q-o-q, to $2.4 billion. In the January-March period, Ukraine sold $818 million worth of goods to Poland, compared to $759 million to Russia. Ukraine’s trade with Russia is expected to further drop this summer after the June 1 start of Moscow’s second trade embargo list with Ukraine in six months. While trade with Russia fell, Ukraine’s trade with the EU grew by 10% to $9.5 billion. The EU accounts for 38% of Ukraine’s foreign trade.

In Sarajevo, Finance Minister Oksana Markarova says Ukraine is “either on track or well positioned” to meet all requirements of the IMF standby program. Talking to Bloomberg Thursday after a panel at the EBRD Annual Meeting, she declined to discuss timing of the next IMF tranche, saying most important thing is to “stay on track.” On the panel, she said Ukraine’s macroeconomic situation is “very good.”

To cut corruption, „our goal is the state in a smartphone, Zelenskiy told visiting Canadian Foreign Minister Chrystia Freeland on Wednesday. “We don’t want to be talking about fighting corruption, we want to defeat it,” he said. To do this, his team wants to minimize Ukrainians’ contacts with bureaucrats.

Nibbling away at Ukraine’s massive inventory of idle state-owned properties, ProZorro has auctioned off 552 state properties since July, earning $37 million for the treasury. Real estate accounted for the overwhelming majority of sales of these ‘small privatisations’. Last December, Kyiv court rulings froze privatisations of large state companies.

Ukraine’s new oil and gas production sharing agreement mechanism is drawing blasts from from the American Chamber of Commerce – days before tenders are due and awards are to be made.PSAs are not used in any EU country, and their use in Ukraine only underlines the urgent need for reforms in the existing oil and gas fiscal and regulatory regime,” the ACC says. “The criteria discriminating PSA and other [license] blocks are unclear. The current PSA process is seriously flawed. A single, fair, stable and non-discriminatory environment for oil and gas is one of the key factors in attracting major international investment.”

In an aggressive bid for Ukraine’s migrant worker market, Ryanair unveils a fall Ukraine schedule with flights to five new German cities and eight new Polish cities. From Odesa, Ryanair launches flights to five Polish cities: Krakow in July, then Gdansk, Katowice, Poznan and Wroclaw on Oct. 29-30. From Kharkiv, Ryanair starts flights to Krakow and Poznan, and Vilinius Lithuania. From Kyiv Boryspil, Ryanair starts a flight in the fall to Katowice and doubles its frequencies to Warsaw to twice daily. Ryanair already flies from Borsypil to five other Polish cities.

Targeting Germany, Ryanair starts flights in October from Boryspil to Hahn, Karlruhe/Baden-Baden, Nuremberg and Weeze; and from Odesa to Berlin-Tegel. Its Austrian unit, Lauda, starts flights in November to Stuttgart.

With three year head start, rival Wizz Air’s Ukraine flight network already includes 12 Ukraine-Poland routes and 13 Ukraine-Germany routes. This summer Wizz Air launches three new flights: from Kyiv Sikorsky to Lublin in June and to Leipzig/Halle in July; and, in August from Kharkiv to Krakow, a new Wizz Air base.

Motor Sich suspends its weekly Kyiv-Lviv-Uzhgorod flight, inaugurated only two months ago. The Infrastructure Ministry is working with the airline and regional officials to promote the route, aiming to establish daily direct Kyiv-Uzhgorod flights for Zakarpattia’s summer tourism season.

In time for the summer travel crush, Kyiv Boryspil opens on May 23, the airport’s first multilevel parking garage. Connected by a covered walkway to Terminal D, the garage will offer long term and short term parking, video surveillance, and digital signs indicating where spaces are free in the 1,000-space facility. Short term parking will be about $1 an hour. Frustrated by years of construction delays, airport officials will celebrate May 23 with a ‘musical festival’ on the roof, billed as “KBPAEROPARTY.”

Ukraine’s food exports increased by 22.5% during the first quarter, adding almost $1 billion in sales, compared to the same period last year, reports Olga Trofimtseva, acting Minister of Agrarian Policy and Food. The top three export groups were: grain – 45%; oil – 22%; and oilseeds – 7%. Top products were: corn – 33%; sunflower oil – 21%; and wheat – 11%. Top destinations were: Asia – 41%; EU – 35%; Africa – 15%; and CIS – 6%.

After last year’s record 70-million ton crop, Ukraine’s grain harvest this year is to recede by 2.3% this year, to 68.4 million tons, predicts the Institute of Agrarian Economics. While livestock production is to be flat, egg production is to grow by 3.4%, and poultry meat by 7.4%. Last year, company farms were the locomotives of Ukrainian agriculture, with their output growing by 12.1%, compared to family farm output growing by 2.2%.

The Grain Ukraine conference will gather producers, international traders and government officials in Odesa on May 24-25. In addition to an address by Trofimtseva and panels on Ukraine’s prospects in world grain markets and strategies for easing domestic transportation bottlenecks, there will be a field trip to M.V. Cargo’s new grain terminal in Yuzhne, a one-hour bus ride south of Odesa.

Effective last Wednesday, the central bank raised the monthly limit on dividend repatriation to €12 million, from €7 million per company. “€12 million, satisfies the needs of all companies with foreign investments operating in Ukraine,” says Oleh Churiy, deputy head of the National Bank of Ukraine. “However, we realize that this limit is a certain barrier for new investors, and our goal is to lift the limit.”

Concorde Capital’s Evgeniya Akhtyrko writes: “This is the latest step by the central bank in its ForEx liberalization campaign. It reflects the NBU’s increasing confidence in the situation on Ukraine’s ForEx and the market’s ability to regulate itself.”

Ukraine will receive the next IMF loan tranche, for $1.3 billion, by mid-July, Alexander Paraschiy, Concorde Capital’s head of research, predicts in an interview with UNIAN. He says that Ukraine has fulfilled three of four basic provisions for the tranche. This month, the Rada may pass a fourth: a new, constitutionally sound illegal enrichment law. “Based on our history, this is a very good result,” he says. Lowering gas prices should not be an issue because parity with imports is maintained. The biggest cloud, he sees, is Igor Kolomoisky’s attempts to reverse the 2016 nationalization of PrivatBank.

Ukraine’s central bank will make at least one more cut in its prime interest rate this year, indicates a Reuters poll of 12 analysts. Five analysts expect the rate to end this year at 16%, down from 17.5% today. Three see the year-end rate at 17%. Two weeks ago, the National Bank of Ukraine cut prime from 18%, its first cut in two years. ICU writes: “In case of successful negotiation on the new [IMF] tranche and continuing decline of the CPI, the NBU is likely to cut the rate again during June meeting (-50 bps), eventually lowering it to 16% by the end of the year.”

Inflation in April was 8.8% compared to one year ago, the State Statistics Service reports. The central bank predicts inflation will taper to 6.3% at the end of this year. The median forecast of Reuters’ analysts is 7.8%.

The interest rate cut led to a 19% drop in bond sales Wednesday at the central bank’s weekly auction, compared to the pre-cut auction on April 23. At the May 7 auction, the bank sold $411 million worth of bonds — $166 million in dollars and the rest in hryvnia. In addition to selling puttable dollar bonds at 3.85%, the bank sold 18-month bonds to 18 bidders for $8.3 mln at 7.25%. The largest demand was for four-month bonds — UAH 4.5 billion sold in 43 bids, with interest rates of 18.25 to 19%.

Concorde Capital’s Evgeniya Akhtyrko writes:We expect the demand for UAH-denominated bonds will remain high as yields will still significantly exceed the current inflation rate. In addition, investing in UAH-denominated bonds looks like a very lucrative opportunity for non-residents, given the hryvnia’s ongoing stability.”

With inflation expected to hold below 9% and the hryvnia/dollar exchange rate at 26.5, little changed in three years, foreign investor interest remains strong. Foreign investors now hold UAH 36.3 billion ($1.37 billion) in bonds. ICU writes: “In our view, a large portion of bills was purchased by foreign investors, most likely with longer maturities from offered yesterday.”

As the presidential transition nears, the US-Ukraine Business Council stresses the importance of Ukraine’s new oil and and gas production sharing agreements. “Tender bids are due in May and the awards are expected in June,” the Council said Wednesday. This process “is being watched around the world as a strong and serious signal that Ukraine is expanding the energy investment climate and providing real opportunities for the private sector to invest in Ukraine.”

South Korea’s outgoing ambassador heard a pitch from Infrastructure Minister Volodymyr Omelyan that Hyundai build an electric car factory in Ukraine. In response, Amb. Lee Yang-goo said Hyundai plans to build on the success of its Rotem trains on Ukraine’s InterCity service and participate in a tender for 85 new subway cars in the Kharkiv Metro expansion plan. The EBRD and the European Investment Bank are financing half of the €320 million project.

With EU’s electric car market booming, Omelyan says that if lawmakers pass bills to stimulate the electric car and battery industry, “the next day we send a delegation to Tesla on construction of their first European plant in Ukraine.” Ukraine has Europe’s largest known supplies of lithium, a key imponent for car batteries. A Tesla battery weighs 540kg, giving Ukraine a supply advantage for Europe, argues Omelyan.

First time registrations of used imported cars totaled 207,000 for the first four months of this year, eight times the number of the same January-April period last year. By contrast, 25,300 new passenger cars – all imports – were registered during the same period, 3% fewer than during the first four months of last year. The flood of imports is due to lower taxes in Ukraine and growing restrictions in Germany against diesel cars. Of new registrations of used imports, 53% were for diesels, according to Ukravtoprom, the industry association.

Analysts from JP Morgan and UBS predict that political maneuvering in advance of parliamentary elections will delay Ukraine’s receipt of a second tranche this year. “PM Groysman clearly signaled that he is moving away from IMF requirements as he announced he will be running in parliamentary elections,” JP Morgan economists Nicolaie Alexandru and Trang Nguyen write in a note. “Both Zelenskiy and most politicians are likely to call for populist measures rather than IMF-required reforms.” Separately, analysts at Swiss investment bank UBS predict that if the Rada does not approve new anti-corruption legislation, this summer’s $1.4 billion IMF tranche will be delayed.

Ukrainian companies again won all auctions for oil and gas blocks conducted under the rules of ProZorro. On Thursday, in the second round of auctions, UkrGazVydobuvannya, the state gas producer, won six of the seven licenses, which are valid for 20 years of exploration and production. A small, private company, Unified Oil and Gas Company, won the seventh license. In March, in the first round of electronic auctions, UGV and two private gas producers, Burisma Group, DTEK Oil & Gas, won three licenses. The third licensing round, for nine blocks, will be June 18, reports WorldOil website.

Richard Deitz’s VR Capital Group is expanding its investments in Ukraine, establishing a joint venture with Investment Capital Ukraine and buying a 50% stake in 11 solar plants with a total capacity of 127 MW in Mykolaiv region. This is the third joint venture in renewable energy between Kyiv-based ICU and VR, according to Avellum, which provided legal advice to ICU. An investor in Russia since 1994, Deitz was based in Moscow for many years. According to Barron’s, his flagship hedge fund, VR Global Partners, L.P., had assets under management of $4.4 billion at the end of 2017.

Ukrainians driving home en masse Sunday from their ‘no visa’ May holidays caused lines as long as 500 cars at Polish-Ukraine border crossings, reports Ukraine’s Border Service. With automobile crossings on the Polish border increasing by 500,000 a year, Ukraine needs to double its land crossings with the EU from the current number of 18, Petro Tsyhykal, head of the border service, recently told Channel 5. He said that last year 100 million people crossed Ukraine’s borders.

With the record harvest pushed through the economy, Ukraine’s real GDP growth slowed to 2.4% in Q1 2019, compared to 3.5% in Q4 2018. Metals, the largest export after agriculture and labor, was ‘close to zero’ due to planned repairs at major mines and steelmakers, reported the National Bank of Ukraine. Retail, travel and construction were up, fueled partly by labor remittances. The central bank predicts the economy will grow by 2.5% this year, down from 3.3% last year.

Ukraine will auction 5G mobile frequencies next year, Infrastructure Minister Volodomyr Omelyan told reporters after meeting Friday with the National Communications and Information Regulatory Commission. “They see a great prospect of this technology,” said Omelyan. “It is their position, that Ukraine will be able to sell the first licenses for 5G next year.” Last month, Omelyan launched a 5G pilot project “Internet of Things on Highways.” Last year, 4G service was launched in Ukraine. Last month, Verizon, the leading American mobile company, and South Korea’s three mobile carriers launched 5G service.

If Western partners – including the IMF – maintain cooperation, Ukraine can get through this year, a peak year for foreign debt repayments, Yakiv Smolii, governor of the National Bank of Ukraine, told G7 ambassadors and IMF representatives in Kyiv on Friday. When the Rada returns to work in two weeks, parliamentarians are to consider a key IMF demand: reorganizing the State Fiscal Service into a tax service and a customs service. If Ukraine passes its IMF review in late May, it should win an IMF tranche of $1.3 billion.

Taking advantage of Russia’s ban on overflights of its territory by Ukrainian airlines, Azerbaijan’s low-cost carrier Buta Airways, is expanding flights from Baku to three Ukrainian cities: Kharkiv, Kyiv and Odesa. After flying to Kyiv Sikorskiy for two years, Buta added Kharkiv on Friday and will add Odesa on May 16. on Friday, May 3, made its first flight to / from Kharkiv airport. UIA has a lone flight to Baku, from Kyiv Boryspil, which must fly south over the Black Sea, around Crimea and across Georgia to reach Azerbaijan.

Kazakhstan’s new discount carrier, FlyArystan, plans to fly to Ukraine in the near future, Peter Foster, president of the parent company, Air Astana, tells the Center for Transportation Strategies. According to the British CEO, FlyArystan plans to carry 700,000 passengers this year and to expand its fleet in two years to 15 passenger jets. UIA, faced with longer and costlier flight routes to Kazakhstan, has cut its frequencies to Almaty and dropped its flights to Astana, now called Nur-Sultan.

Over the next 25 years, Kyiv’s Borsypil airport is to undergo a major €3.4 billion expansion to handle 54 million passengers – four times today’s level. Under a long range development plan approved last week by the government, the airport’s land area would increase by two thirds, to 1,538 hectares, Viktor Dovhan, deputy Infrastructure Minister, posts on Facebook. Terminal D, the main international terminal, would be greatly expanded and the second runway would be rebuilt. After registering a 19% increase last year, to 12.6 million passengers, Boryspil expects to see a 14% increase this year, to 14.4 million passengers.

Starting Friday, Ukrzaliznytsya will double the size of its Boryspil Express train, allowing the airport railroad shuttle to carry 200 passengers at peak hours. Ridiculed by the Kyiv press at its launch last November, the 80 hryvnia shuttle from downtown Kyiv has proved so popular, passengers often stand for the 35-minute ride.

Online purchases now account for 56% of long distance rail tickets sold, up from 50% last year, reports Evhen Kravtsov, CEO of Ukrzaliznytsia. More than 100 million rail tickets have been bought online since the service started in 2015.



The original English version is from our partner UBN – Ukraine Business News. For more information and news archive, go to:


Ukraine Business News, Tuesday, May 7





  • May Rains Set the Stage for Good Crops
  • Double Digit Growth for Sunflower Oil, Poultry, and Eggs
  • Germans, Danes Plan Pig Farms
  • Norwegian Investor Successfully Exits Farm Investment, Now Looks for More
  • Biggest Trucks In Ukraine Haul Iron Ore in Kryvyi Rih
  • Iron Exports Up
  • Canadian Iron Mine Progresses
  • Russia and Ukraine Gird for Gas Transit Talks in May
  • Regional Airports Revive
  • French to Supply Water Purification to Mariupol
  • Solar, Wind: Rada Votes to Move from Europe’s Highest Tariffs to Auctions
  • Investments Make Renewables Ukraine’s Fast Growing Energy Segment
  • Taking Move to Auctions in Stride, Investors plan Billions in New Solar Investments Through 2020

With rain forecast across Ukraine for the next week, farmers are happy. Early spring grain was completed on 2.1 million hectares – 10% more than last year. This is 94% of the planned area, reports the Agrarian Policy and Food Ministry.

Moisture in the soil may put Ukraine on track to match last year’s record grain harvest of 70 million tons. In neighboring Russia, similar weather could boost the grain crop by as much as 14%, to 129 million tons, reports Reuters in a story headlined: “Good Weather Puts Russia, Ukraine on Track for Large Grain Crop.” Kazakhstan, the region’s other big producer, expects to match last year’s harvest of 20 million tons.

With two months left in the grain marketing year, farmers have exported 41 million tons – topping the 40 million tons exported during all of the previous marketing year. Ukraine has exported: 23 million tons of corn, 14 million tons of wheat, and 3.3 million tons of barley. Underlining Ukraine’s role as a world food power, total grain exports could hit 50 million tons this year.

Despite farmers complaining about rail tariffs, the amount of grain moved by freight trains increased by 7% during the first quarter, to 28.6 million tons of grain. Over the last decade, Ukrzaliznytsia has doubled its grain volumes, from 15.5 million tons in 2008 to 33 million tons last year, Andrey Ryazantsev, the state railroad’s financial director, tells the Center for Transportation Strategies.

Sunflower oil production was up by 14%, to 1.5 million tons, during the first quarter, compared to last year’s in January-March period. In March alone, sunflower oil production jumped to 23% y-o-y, to 527,000 tons, reports that State Statistics Service. Ukraine is the world’s largest exporter, with India the top buyer of the cooking oil. In 2018, production dropped by 8% y-o-y, to 4.8 million tons.

Kernel, Ukraine’s largest sunflower oil producer, saw its oil sales jump by 40%, to 389,600 tons in the first quarter, compared to January-March last year. Behind the jump, Kernel’s numbers underline Ukraine’s slow progress in creating a sunflower oil brand and selling oil in bottles– a higher value export. Kernel’s bulk sales were 11 times greater than its bottle sales – 32,000 tons. During the first quarter, bulk sales grew by 41%. Bottle sales lagged, growing by 30%.

Low sugar prices and rising production costs are prompting sugar producers to cut plantings of sugar beets this spring by about one quarter, to 210,000 hectares, the lowest level in five years, reports Ukrtsukor, the sugar producer association. During the first half of the sugar marketing year, sugar exports were down by 10% to 304,000 tons, the association reports. During the last sugar refining season, sugar production was down by 15% to 1.7 million tons.

At Astarta, Ukraine’s largest sugar producer, sugar sales dropped by 42% y-o-y during the first quarter. Sugar prices were down by 15%. By shifting land last year to corn, wheat, barley and sunflower, Astarta’s revenue increased by about 21% to to €110 million, calculates Concorde Capital analyst Alexander Paraschiy.

Ukraine’s fruits and nuts export revenues rose by 22%, to $25 million, during the first two months of this year, compared to January-Febuary period of last year. February’s exports of $25 million were double the level of two years ago, according to EastFruit information and analytical platform.

Pig Progress news site reports that Danish and German companies are planning to launch pig farms in Ukraine, despite outbreaks of African swine flu. The site’s ‘World of Pigs’ feature reports that Danish company Agro East is building a farm in Zhytomyr with a capacity for 25,000 pigs. In Lviv region, two farms, for a total of 10,000 pigs, are planned by German pig producers Poels Mastschweine and Tierproduktion Alkersleben. In Ivano-Frankivsk region, Goodvalley Ukraine, another Danish company, plans to invest €4 million to build a meat processing plant.

Two new cases of African swine fever – one in Ternopil and one in Chernivtsi – were reported Thursday by the State Service for Food Safety and Consumer Protection. Since 2015, about 400 outbreaks involving dozens of farm have been reported. Last year, 145 cases reported in Ukraine of the virus which is fatal to pigs. If infections continue to spread, Ukraine will lose 1.2 million pigs, or $150 million, by 2020, predicts the Food Safety agency.

After spending almost $250 million to buy a poultry producer in Slovenia, MHP, Ukraine’s largest poultry producer, plans to continue to buy producers in the EU and to expand to the Middle East and Africa, according to a statement posted on the Warsaw Stock Exchange website. At home, MHP is investing to increase its production capacity in Vinnytsia by one third, to 840,000 tons in 2022. Between now and 2022, MHP plans to spend $420 on foreign purchases and increasing domestic production.

With little room for sales growth at home, MHP plans to expand exports this year by 15%, to 330,000 tons, Victoria Kapelyushnaya, MHP chief financial officer, tells GlobalMeatNews. During the first quarter, poultry volume sales totaled 164,000, up 21% y-o-y. Exports were 93,000 up 47% y-o-y to 57% of total sales. Concorde Capital’s Andriy Perederey writes: “The company’s key EBITDA driver in 2019 will be a rise in poultry export volumes.”

Ovostar Union, a top manufacturer of eggs and egg products in Ukraine, opened a subsidiary in Dubai and spent $3.3 million to buy two Kyiv region companies last year, the group reported in its annual financial report. Last year, sales destinations were: Ukraine – 55%; Middle East – 26%, EU – 16%, and other countries – 3%. Last year, export revenue increased by 17% to $56 million.

This year, Ovostar, plans to increase laying hens by 13%, to 7.9 million head, and to increase egg production by 14%, or 1.8 billion eggs. List as OVO on the Warsaw Stock Exchange, Ovostars reports are scrutinised closely by analysts in Kyiv. Calculating that the company first quarter revenue was $30 million, or a 9% y-o-y decrease, Concorde Capital’s Androy Perederey writes: “We are keeping our neutral view on Ovostar stock.”

A Norwegian company partly owned by the Norwegian government sold its 3,000-hectare farm in Sumy region last week for an undisclosed price. “The results of the investment were impressive; now we are looking forward to additional opportunities to invest in Ukraine,” said Hans Christian Dall Nygard, regional advisor to Norways State Investment Fund, an investor in the farm. Andrew Kinsel, an American lawyer who advised on the deal, said: “Farm property sale is common, land rental agreements are signed with a corporate entity, and the corporate entity is sold. Land itself is (usually) not sold, only rental agreements.” Even without a private farm land market, he said: “There is strong demand in the farming sector. I see that buyers are quite active through the planting and elections season.”

The Ukrainian Agro-Industrial & Food Forum, the largest such conference outside of Ukraine, will take place May 28 in Rotterdam. Expected to draw executives from 150 agribusiness companies, the forum unites two of the world’s leading exporters and innovators of agri-food products – the Netherlands and Ukraine. Now in its second year, the forum will focus on trade, logistics and infrastructure, financing, ag tech, export markets, trade and investment, and promotion of the value chain.

The biggest trucks in Ukraine now haul iron ore Metinvest’s Northern Iron Ore Dressing Works in Kryvyi Rih. The $2 million BelAz dump trucks can carry loads of almost 300 tons of rock at the quarries, part of one of Europe’s largest iron ore mining enterprises. This year, Metinvest is buying 16 of these monster trucks. Until these purchases, the biggest dump trucks in Ukraine could carry 220 tons. BelAz says that Ukrainian mining companies use 2,000 BelAZ trucks, accounting for 90% of the oversized dumptrucks in the nation.

ArcelorMittal Kryvyi Rih, Ukraine’s largest integrated steel company, plans to increase iron ore concentrate output by 10.5% this year, to 10.3 million tons. This would be a 23% increase over the 2017 level. To reach this level, the company is increasing its investments in mining trucks and bulldozers this year by 46%, to $7 million.

Alexander Yaroslavsky plans to invest $150-200 million over the next five years in two properties he bought since 2017 Sucha Balka, an iron mine in Kryvyi Rih, and Dnipro Metallurgical Plant, a steel plant in Dnipro. At the iron mine, the Kharkiv-based businessman plans to buy new equipment, mine reserves at deeper levels, and build a processing plant. At the steel plant, he plans to build a continuous casting plant.

In March, Ukraine’s ports handled 30.4% more iron ore than in the same period last year – more than double the 12.6% growth recorded for all freight, reports the Sea Ports Administration.

Toronto-based Black Iron (TSX: BKI) has raised almost US$1.2 million in a private placement on the heels of a March land agreement with Ukraine’s Defense Ministry. Under the deal, the Canadian mining company will compensate the Defense Ministry for taking over a troop training area to build an ore processing and tailings site for its Shymanivske iron ore project in Kryvyi Rih. According to Black Iron, the deposit has 646 millon tons measured and indicated resource, at 31.6% iron.

Concorde Capital’s Dmytro Khoroshun notes that in February, Glencore signed an MOU with Black Iron. Speculating that the Swiss-British mining and commodities giant might be the investor in the private placement, he writes: “This news is positive for both Black Iron and Ukraine’s image as an investment destination because it demonstrates the seriousness of foreign investors in projects such as Shymanivske.”

Some skilled miners working at Donetskstal now earn more than their counterparts in Poland and the Czech Republic, Ildar Saleev, company general director tells Channel 24. Competing with Central European mines for labor, he said Donetskstal is raising salaries by an average of 15% for the 10,000 workers at the company’s eight units. He said miner salaries in the Pokrovskoe mine are 76% higher than Ukraine’s average and 43% higher than the Donetsk region average. At present, the company has “hundreds of vacancies” for drivers, pipe fitters, welders and miners, with monthly salaries ranging from $370 to $1,300.

Due to repairs on Russia’s Yamal-Europe gas line, the volume of Russian gas shipped across Ukraine to the EU increased by 5.3% during the first quarter, to 20 billion cubic meters. In one week in April, shipment volumes jumped by 25%, to 300 million cubic meters a day. This flexibility makes Ukraine’s gas line system essential to Europe’s energy security in the 2020s, Naftogaz CEO Andriy Kobolyev writes on his Facebook page.

Ukraine and the EU plan to offer Gazprom a 10-year contract, with a guarantee of 60 billion cubic meters a year in transmission.Ukraine will provide capacity at 90 billion cubic meters per year,” Yuriy Vitrenko, executive director of Naftogaz, briefed reporters last week. “Thirty billion cubic meters will be free capacity, which will be available for booking by other companies.” He calculates that at this level, Ukraine would keep its annual gas transit fees at the current level, $3 billion.

If Russia cuts off gas to Ukraine next year, Naftogaz plans to reverse flows in the main pipeline, allowing Slovakia to pump gas east to Ukraine, Vitrenko tells NV Business. To this end, workers are rebuilding a key compressor pipeline station in Bar, 70 km southwest of Vinnytsia city. To strengthen its negotiating position with Russia, Naftogaz plans to fill all reservoirs this summer, allowing Ukraine to get through the heating season of a normal winter. Ukraine has the largest gas storage capacity in Eastern Europe – 31 billion cubic meters.

In coming days, President Poroshenko is to sign into law the energy bill approved last week by the Rada, moving Ukraine next year from ‘green’ tariffs to ‘green’ auctions. Effective next year, the bill requires that all solar plants over 1 MW and all wind farms over 5MW participate in energy auctions. An existing 10% tariff increase for use of Ukrainian-made equipment is retained. The bill aims to establish a fair market price for ‘green’ electricity, to promote competition among producers, and to cut the cost of ‘green’ power to consumers, according to Sergey Savchuk, head of the State Energy Efficiency Agency.

The new legislation “corrects an error — the highest rates in Europe,” Igor Naslik, Energy and Coal Industry Minister, told the Rada. The goal is to cut news feed-in tariffs for solar plants by 25% next year, and by 2.5% a year from 2021 to 2023. For wind plants over 2 MW, the feed-in tariff is to go down next year by 10%. Biomass and biogas energy rates stay unchanged. Feed-in tariffs are prices paid to producers for selling into acommon electricity pool.

Renewable energy – largely solar and wind – will be the fastest growing energy source in Ukraine this year, predicts the Energy and Coal Industry Ministry. Renewables will more than double – increasing by 127% – to six gigawatts. Nuclear will decline by 1.2%, to 83.4 gigawatts. Thermal – coal and gas – will drop by 2% to 46.5 gigawatts. Combined heat and power plants will increase by 6.6% to 11.7 gigwatts. Large hydro will fall by 23% to eight gigawatts.

During the first quarter of this year, solar accounted for 80% of the 860 MW of newly installed renewable energy capacity, reports Savchuk, the Energy Efficiency director. Of Ukraine’s three gigawatts of installed renewable capacity, solar accounts for 71%.

Sky high ‘green tariffs’ boost the cost of power but generate little renewable electricity, Katya Gorchinskaya writes in a Politico article titled: “Ukraine’s Green Oligarchs.” Current rates paid producers, in euro cents per 100 kilowatt hours, are: solar – 15 to 16 cents; wind – 10.2 cents; small hydro 10 to 17 cents; thermal – 5.8 cents; nuclear 1.7 cents. As a result, renewables provided 1.9% of the nation’s electricity last year, but accounted for 8.6% of the nation’s €5.5 billion power bill.

Asserting that five years of subsidies were needed to jump start Ukraine’s renewable energy industry, DTEK, now Ukraine’s largest solar producer, tells Politico: “Investments in renewables have become the third most attractive sector for direct investments in Ukraine besides the agricultural and IT sector.” DTEK, owned by Rinat Akhmetov, adds: “As in other countries, the introduction of a specific regulatory framework was instrumental for DTEK’s and other investors’ decision to kickstart investments in this sector, and a precondition to attracting foreign long-term debts for the financing of the imported equipment required.”

Michael Yurkovich, CEO of TIU Canada, has two solar plants, totalling 24 MW, in southern Ukraine. Working on two more plants, in Odesa, for an additional 32 MW, he recently told Renewables Now: “Investors need confidence that there is an ongoing commitment to renewables; a consistent level of support during the investment cycle; a supportive regulatory and permitting environment; transparency in the distribution of support; and a level playing field for investors.”

Over $1 billion in solar projects are under construction this spring, racing the Dec. 31 sunset of the sky high green tariffs. Adjusting to a new auction regime, investors plan billions of dollars in additional investments through 2020. The investment action largely focuses on Ukraine’s three sunniest southern regions – Mykolaiv, Kherson and Odesa.

Here is a partial roundup:

In Mykolaiv, 400 MW of solar capacity is under construction or in the planning phase. Foreign investors nvestors include: Estonia Energy Invest, Turkey’s Eko Yenilenebiler Enerjiler AS, and Norway’s Scatec Solar. With EBRD financing, Scatec is building two Mykolaiv solar plants, investing a total of €232 million to build 197 MW capacity.

In Kherson, Scatec, through its Atlas Capital Energy LLC, is building this spring a 50 MW solar station in Hola Prystan. With about a dozen companies in Ukraine, Scatec is working on 414 MW of projects – 251 MW under construction and 163 in the design and permitting stage, reports Interfax-Ukraine.

The Arab Investment and Development Authority, AIDA, signed a deal in Dubai last month with STC Energy Ukraine to invest $2 billion in solar power plants in Ukraine. The first phase is to build solar plants totaling 170 MW, under the agreement signed by AIDA chair Adil Al Otaiba, STC Energy CEO Natalia Tykhonova, reports Emirates News Agency.

In Kirovohrad region, there are plans to commission 46 solar stations with a generating capacity of 500 MW by 2023, reports EcoTown news site. Almost half of this will come from three solar plants, totaling 190 MW, that DTEK plans to commission by the end of this year.

In Nikipol district of Dnipropetrovsk region, DTEK inaugurated earlier this month a 200 MW solar farm, the second largest in Europe. Now DTEK Renewables is building nearby a €200, 240MW solar polar plant, due for commissioning this year.

Companies from Belgium, Denmark, Ireland, Lithuania and Turkey are among the investors building about a dozen solar projects for over 100 MW in central Ukraine’s Zhytomyr region. Establishing the region’s reputation as solar friendly, the Zhytomyr Regional Administration signed 14 memorandums with solar investors last year.

Turkey’s Emsolt is building this spring 20 MW of solar capacity at two sites, in Zhytomyr and Khmelnitsky. The company has 85 MW ready for construction and another 50 MW under development, reports UNIAN.

Kness Group, the Vinnytsia-based engineering, procurement and construction firm, is building 500 MW of solar capacity across Ukraine this year. This adds to 500 MW in projects completed by the company in earlier years, Yevhen Didichenko, co-founder of Kness, told a recent renewable energy conference organized by GOLAW firm in Kyiv.

Two Japanese companies, Green Power Development Japan and Deloitte Touche Japan, are talking with the Energy and Coal Industry about building solar plants with a total capacity up to 1.2 GW in the Chornobyl exclusion zone, reports Interfax Ukraine. In addition to the symbolic value of building solar at the site of the 1986 nuclear disaster, solar developers want to plug into existing power transmission lines.

Odesa region now has 500 MW of installed solar capacity, including a 260 MW project commissioned in January. From Danube to the Mykolaiv border, Odesa now has 23 solar plants in the below 50 MW size. Spain’s Acciona Energia Global is seeking to win permission to buy majority control of two solar projects in Izmail owned by UDP Renewables of Vasyl Khmelnytsky.

With the spread of solar, southern Odesa increasingly faces the problem of excessive daytime power for local electricity grids. To address this, France’s RTE International and Ukrenergo are designing Ukraine’s first energy storage system. RTE International is a unit of RTE, the French electricity grid operator. The first phase of work is financed by a €560,000 grant from France’s Economy and Finance Ministry.

A “radical regional airports development program” is a key to Ukraine’s official plan to quadruple air passenger traffic to 80 million in 2030, reports Aviation Voice news site. To increase regional traffic from 25% today to 50% in 2030, the plan calls for investing €450 million to upgrade the airports of Kharkiv, Kherson, Lviv, Odesa and Zaporizhia to accommodate wide body jets. The airports of Bila Tserkva, Cherkasy, Chernivtsi, Dnipro, Ivano-Frankivsk, Kryvi Rih, Mariupol, Mykolaiv, Poltava, Rivne, Sumy, Ternopil, Uzhgorod and Vinnytsia would be upgraded to handle Boeing 737s and Airbus A320s.

Bolstered by the arrival of its seventh Boeing 737, SkyUp launches an ambitious summer schedule this week. From Kyiv Boryspil, Ukraine’s new low cost airline will start flights to: Alicante, Batumi, Bodrum, Burgas, Catania, Faro, Heraklion (Crete), Naples, Palma de Mallorca, Pula (Croatia), Odesa, Rimini, Split, Tenerife-South, Varna, and Yerevan. From Lviv, SkyUp starts flying to: Alicante, Antalya, Monastir (Tunisia) and Tivat (Montenegro). From Kharkiv, SkyUp’s new flights will be to: Barcelona, Kutaisi, Larnaca, Monastir, Odesa, Paris-CDG, Rimini, Tirana and Tivat.

SkyUp starts flying from a new regional airport last week – Kryvyi Rih. SkyUp starts flights to Sharm El Sheikh and to Antaliya. Later this year, SkyUp would like to fly from Cherkasy.

Poltava’s newly reopened airport, plans to start flights to Poland this year, and to Spain and Israel next year, Volodymyr Okary, the aiport director, tells Zmist newsite. This spring, the airport reopened with SkyUp charters to Sharm el Sheikh and Antalya, Turkey.

After re-opening last December, Mykolaiv airport carried 4,300 passengers during the first quarter. Growth is to continue, with SkyUp starting a flight on Wednesday to Antalia and MotorSich starting flights to Kyiv Sikorsky next month.

By the time Odesa’s new runway is completed this fall, Ryanair will become the city’s largest airline, with scheduled year round flights to five EU cities. One flight will go to Berlin, and four to Poland – Gdansk, Katowice, Krakow, and Wroclaw. The Krakow flight starts June 16. The other flights start Oct. 29.

With as many as 2 million Ukrainians working and studying in Poland, Ukraine has opened in Katowice its 11th honorary consulate in Poland. In addition, there are four consulates: Gdansk, Krakow, Lublin and Warsaw.

The news that Lufthansa recently inspected Zaporizhia airport, drew attention to southeast Ukraine’s fastest growing airport and its 12,000 square meter new terminal that opens this fall. Built to handle 400 passengers an hour, the terminal will soon handle flights by nine airlines to 12 destinations, including Barcelona, Istanbul and Warsaw. By contrast, Dnipro a city of 1 million people — one third more than Zaporizhia – has four airlines flying to four cities. To steal passengers from its rival, Zaporizhia recently started a direct bus route from downtown Dnipro to Zaporizhia airport, a 100 km, 90-minute ride.

Scheduled domestic flights should return to Mariupol by next year, Infrastructure Minister Volodymyr Omelyan tells His ministry and the military are assessing safe landing approaches to this Donetsk region airport, which is only 35 km, west of the front line. Currently used for supply flights by the military, the Mariupol landing strip is considered in better shape than its rivals for civilian flights: Kramatorsk, also in Donetsk region, and Berdyansk, 80 km to the west of Mariupol.

Investing in Ukraine’s two Sea of Azov ports, the government has awarded tenders this month for the first major dredging in a decade of Mariupol and Berdyansk to Azimut Specialized Technical Bureau LLC, a Ukrainian company. With the winner determined by ProZorro online auctions, the two contracts total $27 million.

France is supplying a €64 million soft loan to supply drinking water to Mariupol, an Azov city of 500,000 people, a population swollen with refugees from occupied areas of Donetsk region. Under an agreement approved Thursday by the Rada, the 30-year loan with a 10-year grace period and an annual interest below 1% will help build modern water filter stations and to upgrade city water pipes to cut leaks of drinking water and sewage. A leader in the field, France exports water system technologies around the world.


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