- As Covid Beds Fill Up, Officials Debate December Lockdown
- Finance Ministry Says It Agrees with IMF on 2021 Budget
- Judges Cost Ukraine Billions in Soft Loans
- Europe’s Green Bond Vogue Reaches Ukraine
- Mobile Internet Planned for Road and Rail
With 76% of coronavirus unit beds occupied in Ukraine, authorities fear the country cannot make it to the Christmas holidays without imposing a major lockdown. One option would be to impose a lockdown after schools let out in three weeks for the Christmas break, on Friday afternoon Dec. 18. Arsen Avakov, Ukraine’s powerful Interior Minister, argues for an earlier, faster lockdown. “We need to introduce a lockdown as soon as possible, for three to four weeks,” he said on Ukraine 24 TV. “We are talking about really systemic, huge risks to our people’s health.”
Driving the urgency are record numbers. At the end of last week, the reported daily toll of new infections hit 15,331 and the daily death toll hit 225. New infections in Kyiv hit 1,399. The Health Ministry reports that of the nation’s 57,446 hospital beds for Covid patients, only 13,653, or 24% are free. Last month, President Zelenskiy drew the lockdown red line at 9,500 new cases a day. Days later, he moved the line to 15,000 daily cases. At a minimum, the government is expected to extend the weekend lockdowns.
The Finance Ministry says it has reached agreement with the IMF on the size of Ukraine’s 2021 budget deficit. By postponing an increase in the minimum wage to the end of next year and taking other measures, the Ministry cut $1 billion off the $47 billion budget, reducing the proposed deficit from 6% to 5.5%. The budget must be approved in December. To restart the IMF agreement, the Rada has to pass laws to restore and protect anti-corruption agencies.
Ukraine has only received half of $6 billion international funding expected for this year, Finance Minister Serhiy Marchenko said on the Right to Power talk show. Alluding to foot dragging by the Rada and obstructionism by the Constitutional Court, he blamed “non-adoption of laws in time, and because of decisions of judges.”
President Zelenskiy is about to sign a bill that would provide state guarantees for ‘green bonds’ to help pay Ukrenergo’s overdue debt to solar and wind producers, Acting Energy Minister Yuriy Boyko told reporters. With the overdue debt approaching $1 billion, the government might launch $400 million worth of green bonds, he said. Later, a Finance Ministry investor relations manager Alla Danylchuk emailed Bloomberg, saying the Finance Ministry has no plans to issue green bonds.
The government plans to close about half of the nation’s 33 state-owned coal mines during this decade, Deputy Energy Minister Maxim Nemchinov said at the presentation of a presentation of the results of a poll of residents of coal mining towns. The most economically promising mines are around Vuhledar, a Donetsk area which produces both anthracite and bituminous coals. The Ministry is studying British and German experiences with closing mines and retraining and often relocating miners. Last year, the ministry changed its name from Ministry of Energy and Coal Mining to Ministry of Energy and Environmental Protection.
Ukrzaliznytsia has approved a framework agreement to allow private locomotives to operate on UZ tracks. The signing of the first contract with a company, Ukrainian Locomotive Construction Company LLC, should happen “as soon as possible,” Infrastructure Minister Vladyslav Krykliy said. Based in Lviv, Ukrainian Locomotive plans to haul freight on nine sections of track in Western Ukraine. The Ministry’s press service said: “Interest from the market was significant.” Private freight railroads already operate in all of Ukraine’s EU neighbors – Poland, Slovakia, Hungary, and Romania.
The Digital Transformation Ministry has set these targets for extending high speed mobile internet across the country: accessible to 90% of the population by July 1, 2021; all international highways by Jan. 1, 2023; and all national roads by July 1, 2024. Digital Minister Mikhail Fedorov tells reporters in Kyiv: “Next year we want to focus on the coverage of roads and strategic highways.”
For rail travel, Vodaphone Ukraine is conducting a pilot project with the 35 km Boryspil Airport Express to determine cost for high speed internet coverage on Ukraine’s main rail lines. With about 10,000 km of main lines to cover and 3,000 passenger cars to equip with internet, public investment will have to complement investments by the three mobile operators, Olga Ustinova, general director of Vodafone Ukraine, told reporters. For road and rail, she said, Ukraine’s three mobile providers – lifecell, Kyivstar and Vodaphone – plan to finance about one third of the mobile internet cost.
With domestic tourism the trend, Ukrzaliznytsia seeks to win at least half of all tourists, luring them out of cars and buses. To attract riders, the state railroad has reduced prices of first class tickets and created an easier, online system for redeeming tickets before departure dates, Volodomyr Zhmak, UZ’s new CEO, told tour operators. Aiming at the highest end, the railroad is renovating for public charters the VIP cars that once were the preserve of the Communist Party elite. Through October, the number of train tickets sold in Ukraine dropped by 56% yoy, to 57.5 million.
In a boost for Carpathian tourism, Ukravtodor inaugurated 45 km of mountain road to Synevyr National Park. Essentially opening up the west entrance to the park to tourists from Lviv, the rebuilt road crosses two mountain passes and over 19 restored bridges. With a cost of $24 million, the project was carried out by Turkey’s Onur Construction International. The state highway agency reports that 255 km of roads were rebuilt in Zakarpattia this year, one of the regional leaders for road repair this year.
Parkovy, central Kyiv’s largest convention and exhibition center, is now officially owned by Lyubov Efimova, mother of Ukrainian MP Maxim Efimov. Since opening in 2013, Parkovy has become a popular place for conferences. It has 22,000 square meters, a high end restaurant, underground parking and its own diesel power station. In Feb. 2019, the Maxim Efimov, then an MP with the Petro Poroshenko Bloc, confirmed that the official owner of the facility was his mother, a US resident. Antimonopoly Committee of Ukraine fine her last week $5,000 for not obtaining permission in advance to own 100% of the complex.
Betting that vaccines will tame Covid, SkyUp Airlines is planning a summer flight schedule of more than 60 routes from 21 countries. Betting also on the renaissance of Ukraine’s regional airports, half of the flights will be from four airports far from its base at Kyiv Boryspil. From Kharkiv, Lviv, Odesa and Zaporizhia, SkyUp will fly to Georgia, Greece, Czech Republic and Italy. From Boyspil and several of the regional airports, SkyUp will fly to: Italy, France, Greece, Czech Republic, Georgia, Spain, Bulgaria, Armenia, Turkey, Israel, Cyprus, Portugal, Poland, Germany, Denmark, Jordan, Sweden, Serbia, the Netherlands and Slovakia.
- Naftogaz Wins No Tender Deal to Develop Black Sea Gas Field
- Ukraine Now is Key Player in Eastern Europe Gas Market
- EU Has Big Hydrogen Plans for Ukraine
The government granted Naftogaz the right to develop a massive Black Sea gas block without a tender. The Dolphin block, near Ukraine’s portion of the Danube river delta, is believed to hold at least 1 trillion cubic meters of gas – more than double the big Black Sea find announced recently by Turkey. “This means the possibility of producing up to 10 billion cubic meters per year,” Ukraine’s state oil and gas company announced on Facebook. In recent years, Ukraine has imported 11 to 14 billion cubic meters a year.
Seismic work could involve $40 million of investments in the first year, Naftogaz said on Facebook. “This means the possibility of attracting international investors, and at the same time – on the best terms for Ukraine,” the company wrote. Last month, Naftogaz unexpectedly pulled out of a $500 million Eurobond sale despite it being oversubscribed. The no tender decision by the Cabinet of Ministers cuts permitting delays. “The company will be able to start developing the shelf immediately after the adoption of the normative act,” Roman Abramovsky, Minister of Environmental Protection and Natural Resources, said at the Cabinet meeting.
Last year, an American company, Trident Acquisitions, won a competitive tender to develop the offshore block. The incoming Zelenskiy government refused to accept the results of this ‘Poroshenko tender.’ The issue languished for one year. Ilya Ponomarev, CEO of Trident, emailed the UBN: “This story has ended as we have predicted – no major [foreign energy companies], just no one showed up. So, the government threw our $1 billion offer out of the window. [Now it] will spend taxpayers money in Naftogaz to develop this difficult project in very uncertain times, assuming all risks themselves.”
Ukraine has become a key player in the EU natural gas market, storing 10 billion cubic meters of gas this fall for gas traders. With the European heating starting last month, Ukraine, for the first time in history, started re-exported stored gas to EU countries. “A significant milestone for the gas market is the start of the re-export of gas that was previously imported to Ukraine from the EU,” Sergei Makogon, CEO of the Operator of the Gas Transportation System of Ukraine, writes on Facebook. “Previously, there was only transit and import.” Integrating Ukraine into the regional gas system are: duty free gas storage, duty free short haul gas transportation through Ukraine, and new reverse flow gas pipelines.
The “U” factor: Ukraine’s growing role in Europe’s natural gas market,” headlines a 1,600-word article in S&P Global Platts. This year “access to both Ukrainian storage and inbound transport capacity resulted in large gas flows transiting Slovakia, the Czech Republic and Hungary destined for Ukraine,” reports S&P. “This in turn created the conditions for the growth of gas hubs in Central and Eastern Europe.”
Europe’s Green Deal commitment to renewables, hydrogen and decarbonizing energy sources “means that between 2030 and 2040, Europe may see a radical drop in demand for natural gas,” Andrian Prokip, wrote in a Kennan Institute essay: “New Era of Gas Wars between Ukraine and Russia?“ “That would likely mark the end of Russia’s energy expansionism.”
The EU ‘Hydrogen Strategy’ calls for dividing EU hydrogen production between the EU and its eastern neighbors. “This strategy stipulates that ‘the Eastern Neighborhood, in particular Ukraine, and the Southern Neighborhood countries should be priority partners,’” writes Prokip, an energy expert for the Wilson Center. “Ukraine could become a key partner of the EU in the production and export of hydrogen. In light of Ukraine’s current diminished role in natural gas transit…hydrogen export may become the basis for a revitalized, long-term cooperation and part of the real economic integration of Ukraine and the EU.“
The American Chamber of Commerce in Ukraine has presented its annual Thanksgiving Awards to Mykhailo Fedorov, Digital Transformation Minister, and to Paul Niland, founder of Lifeline Ukraine, a national suicide prevention hotline focused on helping military veterans. Fedorov said of his work to simplify government services: “We have already created a mobile application and portal of electronic services ‘Diia’, introduced the first digital passports in the world, launched registration of a business in 15 minutes.”
- Reality Check: No IMF Aid This Year
- Finance Ministry Raises Interest Rates to Sell Hryvnia Bonds
- Capital Investment Drops 29%
- Israel-Ukraine Free Trade Pact Starts Jan. 1
- Looking Beyond Covid, SkyUp and New Airline Plan New Flights
Ukraine will not receive any additional tranches of IMF low interest loans this year, Tymofiy Mylovanov, former Economy Minister and newly appointed advisor to the President’s office said on the ICTV’s Svoboda Slova program. Under the $5.5 billion agreement signed last June, Ukraine received an immediate loan of $2.1 billion. By the end of December, it was to receive two more tranches of $700 million apiece.
Last summer’s purge of the Central Bank leadership and the court rulings that undermined Ukraine’s anti-corruption agencies apparently turned off the IMF. Last month, the head of Britain’s M-I6 intelligence agency reportedly warned President Zelenskiy that his chief of staff, Andriy Yermak, is a Russian agent. Last week, the Kyiv Post published an Interview with Stanislav Shevchuk, former chairman of the Constitutional Court, who charged that the Court’s “goal is to kill Ukraine’s Euro-Atlantic vector.”
While the IMF awaits a positive resolution of the Constitutional Court standoff, Mylovanov said Ukraine could get an IMF “staff-level agreement.” This could unlock billions in EU and World Bank aid as well as improve access to the international Eurobond market. To facilitate talks with the IMF, Zelenskiy plans to send Oksana Markarova to Washington as Ambassador. A veteran of several IMF negotiations, Markarova served as Finance Minister in early March when Zelenskiy unexpectedly fired her.
Adamant Capital wrote: “Key requirements seem to be some kind of progress on resurrecting the [National Anti-Corruption Bureau’s] powers and a balanced 2021 budget (deficit, in all probability, needs to be lower than the current 6% of GDP target). Given that the state is currently in dire need of financing (we estimate that at least $5.5 billion of extra cash will be needed by year end to fulfill expenditure obligations), we expect Zelenskiy to do everything in his power for this scenario to materialize.”
The Finance Ministry jacked up interest rates and increase its sales of hryvnia bonds 30-fold, compared to the week earlier. By raising yields by one percentage point, to 10%, the Ministry sold $245 million worth of 4-month bonds. By raising the yield by 125 basis points, to 10.25%, the Ministry sold $119 million worth of 6-month bonds. These two sales, accounted for 90% of the hryvnia sales. In addition, the Ministry auctioned off €157.7 million in 1.2 year bonds at 2.45%, up 23 basis points from the last similar auction.
The companies of Serhiy Tigipko’s TAS Group plan to issue about $70 million worth of bonds next year, about 95% in hryvnia, Roman Gorokhovskikh, the Group’s international projects director, told the Ukrainian CFO Forum in Kyiv. Bonds will take the same amount of time to prepare as bank loans – 3-4 months – but will offer cheaper money, he said. Rather than offer bonds for the group, TAS will offer bonds for individual companies, offering yields between 3% and 10%, depending on individual company ratings.
Capital investment dropped 29% yoy, to $9.5 billion, for the first three quarters of this year, reports Ukrstat. Self-financing by companies accounted for 69% of total capital investment. Other sources were: local budgets – 8.6%; bank loans – 7.5%; state budget – 6%; family savings for residential housing construction – 5.2%; and foreign investors – 0.5%. Last year, capital investment was up 11% over 2018.
The Israel-Ukraine Free Trade Agreement starts Jan.1, President Zelenskiy tweeted. “The ‘green light’ to the growth of Ukrainian exports, closer cooperation in the fields of high-tech, engineering, investment,” is how Zelenskiy described. Although Zelenskiy signed the agreement in August of last year, Knesset ratification was held up by three parliamentary elections in one year in Israel. Zelenskiy hopes the deal will double bilateral trade from last year’s level of $1 billion.
Ernst & Young, is to prepare a tender for the concession to a private operator of the rail-ferry complex at Chornomorsk port, Infrastructure Minister Vladislav Krykliy announced. The tender to upgrade and operate the terminal will be held by June and should generate commitments to invest at least $5 million, Krykliy said. Separately, the Ministry plans to put up for tender by December a concession to run the port’s container terminal. The Global Infrastructure Facility, a World Bank partnership with country donors, is advising and partly funding the tender process. Opened in 1962 as Illichivsk, Chornomorsk has ferry service with Poti, Georgia; Karasu, Turkey; and Varna, Bulgaria.
Concession projects also are planned for parts of these ports: Odesa on the Black Sea; Berdyansk and Mariupol on the Sea of Azov; and Izmail and Reni on the Danube. Three small, state-owned ports are to be put up for sale: Bilhorod-Dnistrovs’kyi, Skadovsk and Ust-Dunaisk.
Over the next three years, the government plans to oversee investments in upgrades at 14 regional airports: Cherkasy, Chernivtsi, Dnipro, Ivano-Frankivsk, Kherson, Kryvy Rih, Mykolaiv, Odesa, Poltava, Rivne, Sumy, Vinnytsia, Zakarpattia, and Zhytomyr. In Zakarpattia, Uzhgorod airport is to be replaced, probably on the site of an old Soviet airbase south of Mukachevo. Due to be carried out with a mix of public and private funds, the 14 airports are on a list of 103 priority investment projects approved last week by the Cabinet of Ministers.
Looking beyond coronavirus, a new Ukrainian airline, Bees Airline, plans to start service this month, offering charter flights between Kyiv Sikorsky and Egypt’s coastal resort cities. Managed by Yevgeny Khainatsky, SkyUp’s former managing director, Bees has leased and painted yellow and black two Boeing 737-800 jets formerly used by UIA. Next spring, Bees plans to add two more Boeings and possibly fly to Georgia.
SkyUp Airlines plans to start flights from Kyiv Boryspil next spring to Berlin Brandenburg Airport. Opened one month ago, this new airport replaces Schönefeld, Tegel and Tempelhof airports. On Dec. 27, SkyUp inaugurates service to Kayseri, Turkey. Last month, SkyUp launched its ‘City Break’ long weekend option with flights to Dubai.
Poland has agreed to allocate 5,000 additional permits for Ukrainian trucks, Minister Krikliy announced on his Telegram channel. Good through January 31, the offer comes after Ukraine charged that by cutting trucking permits for Ukraine, Poland was violating Ukraine’s liberalized trade agreement with the EU. Poland is short of truck drivers. By squeezing the permits, Poland tries to get Ukrainian drivers to drive for Polish companies.
- Retail Sales Surge, More than 300 Supermarkets Open
- Weekend Quarantine Hits the Retail Brake in November
- PM Draws up Plan B: Christmas-New Year’s Lockdown
- Zelenskiy Gets Out of Hospital, More Pols Fall Ill
Despite the spring coronavirus lockdown, retail sales for the first 10 months of this year are up almost 8% yoy in real terms, reports the State Statistics Service. In Kyiv, the nation’s biggest market, January-October sales are up 17% over last year’s level for the same period. Nationwide, sales were hot this fall – up 11.6% in September and up 15.2% in October.
Concorde Capital’s Evgeniya Akhtyrko writes: “Retail sales in Ukraine are surging, backed by fast growth of wages. The strong household consumption is helping the economy to offset the fall in investments. We expect Ukraine’s retail sales to increase 9% yoy in 2020 (vs. 10.3% yoy in 2019).”
During the first half of this year, more than 300 new grocery supermarkets opened in Ukraine, a record figure for the last decade, reports NAI Ukraine, the commercial real estate consulting company. In the fast moving consumer goods segment, the leaders were: ATB network +56; Kolo +47; Delvi +18; Fozzy Group +17; Varus +12; and Novus +8. Forbes Ukraine places ATB among the top three biggest businesses in the country.
For household goods, Danish chain Jysk opened 13 new stores in the first half. Epicenter opened seven and Leroy Merlin opened two. Chains specializing in cosmetics, electronics and clothing also expanded store networks.
“The opening of new stores is due to the dynamic growth of retail after the lockdown,” NAI tells Interfax Ukraine. “[Because] Ukrainians visited foreign countries less, about $ 3.8 billion remained in the country in the second or third quarters, opening up even greater opportunities for the domestic market.” Profitability of retail real estate development is about 10% per year, with a payback of about nine years, NAI Ukraine said.
The Fora supermarket chain expects to double deliveries in 2021 through delivery services, compared to this year, Yevhen Trishyn, Fora’s digital technologies director, told reporters recently. He said: “According to our vision of the market, the number of purchases with small and medium check will grow especially rapidly.” At several stores in central Kyiv, Glovo deliveries account for 10% of the store’s turnover.
Due to the spring coronavirus lockdown, Glovo grew in Ukraine 40-50% faster than its plan for 2020, says Dmytro Rasnovsky, Ukraine general manager for the delivery service. Known for its trademark yellow boxes, Glovo underperformed its financial targets by 20%, largely because it kept prices low to grow the market. Saying the Barcelona-based company is investing “millions of euros” in Ukraine, he said: “We will invest to create a market. Now is not the time to raise rates.”
During the first weekend quarantine of November, sales volumes fell by 45% compared to the previous weekend, Ukrainian Processing Center tells Interfax-Ukraine about use of 7.8 million cards of its 19 client banks. During the weekend of Nov. 14-15, the number of payments through point of sale terminals dropped by 27%, to almost 3 million, and the turnover on these operations fell by 45%. Alexey Puznyak, of Raiffeisen Bank Aval, tells Interfax-Ukraine that on Saturday Nov. 14, the number of transactions with its bank cards through terminals was down 31%. On Sunday Nov. 15, it was down 47%. He said: “If in the segment of supermarkets there was practically no fall, then, for example, in the segment of clothing trade there was a decrease by more than 90%.”
With new infections increasing late last week by 14,500 a day, Ukraine’s government adopted a system of ‘Priority Hours,” for people over 65 years of age to go shopping. The shopping window of 10 am to noon is reserved for this group, which has the highest mortality rate from Covid-19.
While waiting to see if the weekend quarantines brake the infection rate, the government is polling mayors and religious groups for suggestions for tougher quarantine that would cause less economic damage than the one last spring. “This is Plan B – if the weekend quarantine does not work,” Prime Minister Shmyhal wrote on Facebook. Clearly the government is seeking to build a consensus for a more radical step that might have to be taken in December. “We want our steps to be clear and predictable for people and businesses,” he wrote. “Therefore, this week we met with the city mayors twice.”
Ivano-Frankivsk Mayor Ruslan Martsinkiv said after an online meeting with the Prime Minister: “If, God forbid, this lockdown is introduced, it will be a disaster for the economy, especially for small- and medium-sized businesses.” In response, Kyrylo Tymoshenko, deputy chief of staff to President Zelenskiy, told Interfax-Ukraine: “The option of ‘New Year’s lockdown’ is being considered in all countries. We hear this from all European colleagues, but it is too early to talk about it [here.]”
President Zelenskiy and his chief of staff, Andriy Yermak, tested negative for coronavirus and were released from Kyiv’s elite Feofania Hospital, ending two weeks of treatment. “I finally have a negative coronavirus test result,” Zelenskiy said. “I’m already at work. The day will be busy, but I am very happy to dive into the work as usual.”
Coronavirus is cutting deeper into Ukraine’s political elite. The newly elected mayors of three cities – Boryspil, Konotop and Novgorod-Siversky — died from COVID-19 after the Oct. 25 local elections. Currently hospitalized or under treatment at home are: Health Minister Maksym Stepanov; Mykolaiv Mayor Oleksandr Senkevych; Rada Speaker Dmytro Razumkov; former Rada speaker Andriy Parubiy; pro-Russia Rada member Vadym Rabinovich; and Chairman of the Crimean Tatar Mejlis, Refat Chubarov. The Tatar leader wrote on Facebook: “Against my will, I became a member of COVID-19 club.”
One roadbuilding season made a difference. Ukraine in 2020 climbed 20 notches in “Quality of Roads” Ukravtodor says, citing The Legatum Prosperity Index. Out of 167 countries, Ukraine rose to 126th place this year, from 146th place last year. This year, the state highway agency has overseen the repairing or rebuilding of 3,900 km of national roads. Under the Zelenskiy administration’s ‘Big Construction’ program this figure is to increase next year to 6,800 km. At its height last summer, road projects employed 21,256 people, Ukravtodor says.
- US-Trained Economists Return to Zelenskiy Government
- Canada’s Poster Boy for Ukraine Investment Accuses Kolomoisky of Trying to Steal His Solar Plant
- Corona Infections Double in a Month
- Kyiv Now is in ‘Uncontrolled Outbreak’
With clouds hanging over Ukraine’s deal with the IMF, President Zelenskiy is bringing back into his government two US-trained economists he let go last March – his former Finance Minister and his former Economy Minister.
Oksana Markarova, the former Finance Minister, has been nominated to serve as Ukraine’s next Ambassador to the United States. Trained in public finance at Indiana University, Markarova worked in the Finance Ministry for five years until she was let go in the mass cabinet shakeup of March 4. As Finance Minister for two years, she saw interest rates on foreign currency bonds fall to record lows for Ukraine – 2.22% in euros and 3.4% in dollars. Last January, Ukraine borrowed €1.25 billion for 10 years with a 4.73% interest rate, once again a record low rate.
A fluent English speaker, Markarova has participated in numerous negotiations with the IMF, World Bank and other foreign financial institutions. Foreign Minister Dmytro Kuleba reacted to press speculation that she was chosen to go to Washington to deal with the IMF, writing on Facebook: “The idea that Markarova is sent only to extort money from the IMF is a delusion.”
Tymofiy Mylovanov, the former Economy Minister, has been appointed as a “non-staff” adviser to Andriy Yermak, Zelensky’s chief of staff. After resigning from the Cabinet in March, Mylovanov has served as president of the Kyiv School of Economics and a Professor at the University of Pittsburgh.
Mylovanov, a University of Wisconsin-Madison graduate, is known for advocating forceful, generally free market policies. Two weeks ago on the Svoboda Slova program he advocated a hard lockdown to slow down coronavirus epidemic, saying: “We should close businesses and provide them with financing. But we don’t have enough funding now. So in essence, we need to print money.” Yermak, who is recovering from coronavirus, is seen as behind the purge of pro-Western reformers since March.
In another personnel change, the Cabinet fired on Olha Buslavets, the acting Energy Minister, replacing her with Yuriy Boyko, her deputy at the Ministry. Buslavets had served as acting minister for the last seven months as the government did not have the votes to win parliamentary approval. Some media outlets and some Rada members accused her of acting in favor of Rinat Akhmetov, owner of several coal mines and electricity generation companies. Boyko, a longterm state employee previously was deputy director of Energorynok, the state-owned company that intermediated between energy producers and energy distributing companies, or Oblenergos.
In a black eye for Ukraine’s investment image, a pioneer Canadian renewables investor is accusing Igor Kolomoisky and his business partners of trying steal a 10.5 MW solar plant. Built by Calgary’s TIU Canada, the plant was inaugurated in January 2018 and hailed as the first investment under the new Canada Ukraine Free Trade Agreement. Built largely to feed Kolomoisky’s Nikopol Ferroalloy Plant, the solar plant’s substation is on the Ferroalloy plant grounds. The Ferroalloy plant controls road access to the solar plant.
In the summer of 2019, Kolomoisky stopped paying the green tariff for solar and wind electricity nationwide. On March 1st, the Ferroalloy plant cut off TIU Canada from the substation. Later, in face to face talks with TIU Canada, Kolomoisky offered to buy the plant he had closed. CEO Michael Yurkovich says in a press release sent to Canada’s financial press: “This is a clear case of oligarchs pressuring a foreign investor and trying to steal assets.” Noting that the cutoff has cost his company €1.5 million since March, he said: “We are mustering our resources and will fight this case in Ukraine, Canada, or any jurisdiction needed to win.”
The TIU Canada plant in Nikopol is one of several completed solar plants around Ukraine that are not functioning because of problems connecting with power grids, Artem Semenyshyn, Executive Director of the Solar Energy Association of Ukraine, told Interfax Ukraine. He said: “It is very bad when we lose the already built “green” generation facilities, which are now idle and do not increase the share of clean electricity.” If the government does not work to hook up these completed plants, the portion of solar power in the nation’s energy mix could start to fall, he warned.
TIU Canada’s Vita Solar is one of several dozen small renewable companies that are suing for nearly $18 million from the Guaranteed Buyer, the state company that is obliged to buy power from renewable developers. By the end of next year, the Guaranteed Buyer is to pay almost $1 billion in overdue electricity bills. Two weeks ago the Rada passed at first reading a bill to extend state guarantees to ‘green bonds’ that the government would launch to cover the debt.
President-elect Biden will be well-positioned to help President Zelenskiy fight against corruption in Ukraine, The Washington Post wrote last week in an editorial titled: „Ukraine’s anti-corruption push is stalled. Biden can help get it going again.” “Mr. Biden…has been one of Ukraine’s best American friends, visiting the country five times while Vice President and strongly supporting its battles against Russian aggression and domestic corruption,” writes the Post. “A Biden Justice Department could also renew efforts to pursue criminal corruption cases against key Ukrainian oligarchs, including Dmytro Firtash and Ihor Kolomoisky, who have been instrumental in blocking reforms and in promoting Russian interests in Ukraine.”
Ukraine averaged 14,500 new coronavirus infections on Friday and Saturday – double the level of one month earlier. Police have the right to fine people not wearing masks in public places – mass transit, underground passageways, stores, and public buildings. The fines range from $6 to $9. On sidewalks, masks are encouraged, but not obligatory.
Under the current regime of weekend quarantines, 17,000 to 33,000 people could die of coronavirus in Ukraine over the next five weeks, according to a forecast by the Kyiv School of Economics.
Nationwide Ukraine, an average of 27% of PCR tests for Covid are showing positive results. “Uncontrolled outbreak” is how Pavlo Kovtonyuk, head of the School’s Center for Health Economics, described the situation in Kyiv City and nine regions: Zaporizhia, Sumy, Kyiv, Volyn, Rivne, Ivano-Frankivsk, Zhytomyr, Khmelnytsky, and Chernivtsi. In, Kyiv Mayor Klitschko reported a record of new cases on Saturday morning.
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