- Capital Investment Plunged Last Year
- Road Building Goes East, to Luhansk
- Pakistan Inks $85 Million Tank Repair Contract
- Russian Hacking Again Hits Ukraine
- Big Investments in Carpathian Ski Resorts
Capital investment in Ukraine’s economy fell 28% yoy last year, to $15 billion, reports the State Statistics Service. Investment in industry and agriculture fell by 34%; in construction by 36%; in retail by 29.5%; in real estate transactions by 29%. Investment in computers and telecom grew by 1.2%.
Two thirds of capital investments came from company funds. State budget funds accounted for 9%. Foreign investors accounted for only 0.4%. The drop in 2020 came after an 11% increase in 2019. During 2020, the drop deepened with every quarter, finishing with a 43% drop in the fourth quarter of 2020, compared to the same quarter of 2019.
Directing infrastructure investments into Luhansk, Ukraine’s easternmost region, Ukravtodor plans to pave three key road sections this year, totaling 176 km. By comparison, from 2014 to 2019, a total of 30 km of roads were repaired in the region, Alexander Kubrakov, CEO of the state highway agency, said Wednesday at the Ukraine 30 Infrastructure Forum. The World Bank and the European Investment Bank are helping to fund this year’s road work. Kubrakov said: “We will try to expand this project to the Donetsk region, our international partners are interested in this.”
As medical teams started vaccinating Thursday in all 24 regions, the Health Ministry reported a 40% spike in the daily toll of detected cases – 8,147. By March 31, Ukraine is to receive 2 million doses of of the Oxford/AstraZeneca vaccine, enough to vaccinate 1 million people, Health Minister Maksym Stepanov said on TV Ukraina
President Zelenskiy has appointed former finance minister Oksana Markarova as ambassador to the United States. The president’s office said Thursday: “Oksana Markarova will set an example in the development of economic diplomacy: in attracting foreign direct investment in Ukraine, in promoting Ukrainian exports and defending the interests of Ukrainian business.”
Ukroboronprom and Pakistan have signed an $85.6 million contract for the repair of the main battle tanks that Ukraine sold to Pakistan between 1997 and 2002. The Soviet-design T-80UD tanks were manufactured in Kharkiv at the Malyeshev Factory. After an initial shipment in 1997, Russia protested that Ukraine did not have export rights and withheld key components. Ukraine filled part of the order from stocks, then fabricated parts to complete the full order for 320 tanks.
The maintenance contract with Pakistan was signed at IDEX-2021, the week-long international arms exhibition that ended Thursday in Abu Dhabi. “The Ukrainian delegation reached a number of preliminary agreements with the UAE, Saudi Arabia and Jordan in the areas of high-precision weapons, unmanned platforms, space technologies, and aircraft engine repair,” Interfax-Ukraine reports. Strategic Industries Minister Oleh Urusky headed Ukraine’s mission and wrote on Facebook that he met with Brazil’s Deputy Defense Minister Marcus Pontis.
Ukraine accuses Russian hackers of trying to disseminate malicious documents through a web-based system on which government documents are circulated. The aim was to contaminate information resources on the System of Electronic Interaction of Executive Bodies, Ukraine’s National Security and Defense Council said. “The methods and means of carrying out this cyber attack allow (us) to connect it with one of the hacker spy groups from the Russian Federation,” the council said. Separately, last Monday, Kyiv accused Russian internet networks of attacks on Ukrainian security and defense websites.
At least 1,000 highly skilled engineers would have been required to develop the code that hijacked widely used network software from US-based SolarWinds to deploy malware around the world, Microsoft President Brad Smith told the Senate Intelligence Committee in Washington. Smith said: “We’ve seen substantial evidence that points to the Russian foreign intelligence agency, and we have found no evidence that leads us anywhere else.” At least nine government agencies and 100 private companies were breached. White House press secretary Jen Psaki said it will be “weeks, not months,” before the U.S. responds to Russia.
Ukrainians spend $4.2 billion on imports of new and used vehicles last year, reports Ukravtoprom, the car industry association. Car imports were down by 11%, to 486,300, or $3.5 billion. Almost 100,000 cars were imported from Germany, making it the top source. As restrictions on diesel cars spread in Germany, prices on late model diesels have dropped, making them attractive to Ukrainian buyers. Sales of trucks and vans dropped by 16%, to 43,500. Germany was also the top supplier.
Over the next five years, up to $500 million will be invested to develop a year round resort in mountains around the century-old Carpathian resort of Slavske, Lviv region. Phase one will include 20 km of ski trails and hotels and ski-in ski-out condos, that Vasyl Danyliak, first vice president of OKKO Group, the lead investor. Danyliak and Oleksandr Shevchenko, co-owner of Bukovel, signed an agreement Wednesday with Ukravtodor on development of roads to support Carpathian mountain tourism.
The tourist flow and spending has not changed this winter at Bukovel, Shevchenko told Interfax-Ukraine at the Infrastructure Forum. Tourist spending averages €150 per day. Many skiers and snowboarders bought their passes last summer at a 50% discount. Shevchenko said that $15 million was invested in Bukovel last year. Looking ahead, he said the resort owners would like to invest in storing the terminal at Ivano-Frankivsk airport, if the Infrastructure Ministry rebuilds the old Soviet runway.
HBO, the US pay TV network, is negotiating with Ukraine to create an “offline attraction” in the Chornobyl Zone, deputy presidential chief of staff Kyrylo Tymoshenko, told the Infrastructure Forum. “It will not be an amusement park…it will attract many foreign tourists,” he said of the decommissioned nuclear plant, a 2-hour drive north of Kyiv. In 2019, millions of viewers around the world watched HBO’s 5-part Chernobyl miniseries. This April 26, the 35th anniversary of the nuclear disaster, marks the start of a program to memorialize the area, says Ukraine’s Culture and Information Policy Minister Oleksandr Tkachenko.
To prepare for boat tours as early as this year from Kyiv to Chornobyl, the Pripyat River was dredged last year by the Ukrainian Sea Ports Authority. To allow the passage of a boat with a maximum draft of 1.6 meters, the Authority dredged 130,000 cubic meters from the 64 km section of the river between the Kyiv Sea and the Belarus border. Environmentalists warned that dredging in the exclusion zone would stir up radioactive sediments from the 1986 nuclear plant fire. Environmental Protection Minister Roman Abramovsky responded last summer that radioactivity was monitored daily and that no river sediment was thrown ashore.
- Engines Start for Biggest Roadbuilding Season in Ukraine’s History
- Foreign Investors Will Be Able to Buy Infrastructure Bonds
- Ukraine Plans to Switch Electricity Ties from Russia to EU
- Covid Vaccinations Start
With the traditional March start of the roadbuilding season, Ukraine will see this year the largest amount of road construction since Independence 30 years ago. In all, 4,678 km of roads are to be rebuilt this year – 20% more than last year and nearly four times the annual average of 2017-2019. The breakdown is: 1,205 km of international roads, 1,363 km of national roads, 1,206 km of territorial roads and 904.3 km of regional roads.
As outlined this week at the Presidential forum ‘Ukraine 30. Infrastructure’ the highlights of this year’s $5.3 billion ‘Great Construction’ are:
- Kyiv’s 150 km Ring Road – work starts on two sections; tenders are to be prepared on the other three sections
- Kyiv-Odesa highway – the southern half will be rebuilt/repaired; for safety reasons, 21 of 23 left hand turns will be eliminated; most pedestrian crossings will be replaced with bridges or underpasses.
- Dnipro road bridges – work continues on the Zaporizhia bridges; work starts on the Kremenchuk bridge; Ukravtodor offers to take over from the Kyiv City Administration the 28-year-old Podil-Voskresenska Bridge and complete the road and rail project by the end of next year.
- Border checkpoints – 250 km of approach roads are to be upgraded; a bridge replace a ferry over the Dnistr, linking Yampil, Vinnytsia, and Cosăuți, Moldova. The Kyiv-Chisinau road will be upgraded to cut drive time to six hours.
- Cement roads – work is to double, focusing on southern roads where overloaded trucks headed to Black Sea ports damage asphalt in hot weather.
- M-30 highway – to be Ukraine’s longest road, stretching from Stryi, Lviv region to Luhansk, this 1,400 km East-West road is numbered after this year’s Independence anniversary.
- High speed charging stations for electric vehicles – increase stations on the most popular highways: Kyiv-Lviv, Kyiv-Odesa and Kyiv-Dnipro; add charging stations to the Orlivka, Ukraine terminal of the new trans-Danube ferry to Romania.
- Tourism – work starts on repairing 320 km of mountain roads in the Small Carpathian Ring project, a tourism route in Lviv and Zakarpattia regions.
- Social – 500 projects: 95 schools, 70 kindergartens, 80 sports facilities, 20 cultural facilities, 35 hospitals, 200 outpatient clinics.
- Ukrposhta – “100% digitalization” of the state postal operator; launching of 2,000 mobile post offices, five automated mail hubs and 10 sorting depots.
The Kyiv School of Economics estimates this injection of money into construction will increase Ukraine’s GDP by 2.2% over the next five years. The study cites: increases in investment in transport, courier services and tourism; reduction of travel time, fuel spending and vehicle repairs; business expansion and new enterprises.
Foreign investors are to get the chance to invest in this massive spending by buying sovereign-backed infrastructure bonds in a new $3 billion state fund, reports Ukravtodor, the state highway agency. Under development with the EBRD, the state fund would be subject to international arbitration, and would have an independent supervisory board. To get Ukravtodor in shape for foreign investment, 30 EBRD specialists are working at the agency to put all tenders online and ensure that procurement follows Western standards.
“Similar funds operate in most developed countries – Build America, Infrastructure Canada, Macquarie Korea Infrastructure Fund, Polish Development Fund and more,” said Kyrylo Tymoshenko, deputy presidential chief of staff and coordinator of the Great Construction program. “Such funds provide more transparent and efficient management of the country’s investment projects.“ “The Great Construction Fund in Ukraine will allow attracting long-term financing in both domestic and foreign markets.”
Private investors would buy sovereign-backed bonds issued by Ukravtodor, Tomas Fiala, CEO of Dragon Capital told the forum. “It is expected that the amount of investment attracted under state guarantees will be several billion dollars from private investors from around the world. In general, the transport infrastructure is extremely attractive for investment.” Jean-Erik de Zagon, head of the European Investment Bank’s Ukraine’s office, concurred, saying: “Financiers are convinced that good infrastructure will be a boost for private sector development.”
Ukraine plans to disconnect from the electricity grid with Belarus and the Russian Federation by the end of 2023, Foreign Minister Dmytro Kuleba said at a press conference in Kyiv with Lithuanian Foreign Minister Gabrielus Landsbergis. “Since Soviet times, the Ukrainian power grid has been a part of a single network that includes Belarus and Russia,” Kuleba said. “But we want to cut off from this network and make the Ukrainian power grid an integrated part of the European network. We plan to do this by the end of 2023. After that, any power flows from Belarus will become physically impossible.”
During this month’s cold snap, Russia and Belarus supplied about 3% of Ukraine’s electricity needs. Underproduction of electricity at nuclear power plants and a shortage of coal at thermal power plants caused electricity prices to jump as much as 30% in February of January.
Despite this dependence, Acting Energy Minister Yuriy Vitrenko told the Rada last month: “Reasonable import restrictions should be imposed right now.” Two weeks ago, he told the European Business Association that Ukraine needs to bring its regulatory framework in line with European law to meet the goal of integrating with ENTSO-E, the European energy system, by the end of 2023. Vitrenko may now have the powers to oversee this process. Last week, the Rada passed a law giving acting ministers the powers of Rada-approved ministers.
Ukraine started vaccinating against Covid-19, targeting doctors, nurses and soldiers. The first 500,000 doses of Oxford-AstraZeneca vaccine arrived in Kyiv from the Serum Institute of India, the world’s largest vaccine manufacturer. Ukraine has reserved 22 million doses of vaccine. It is negotiating to secure more to cover half of the adult population this year. After an infection lull, Ukraine is experiencing an uptick with 5,850 new cases reported for the 24-hour period ending Wednesday morning. Over the last year, 1.16 million Ukrainians are known to have recovered from Covid-19, and 25,461 have died.
Windrose Airlines plans to expand its domestic flight network this summer to have flights from Kyiv Boryspil to at least nine regional capitals, Volodymyr Kamenchuk, Windrose CEO, said at the infrastructure forum. He said: “We want to expand our flight map to at least 10 airports in 2021.” One year ago, before the pandemic hit, Windrose flew from Boryspil to: Dnipro, Lviv, Kharkiv, Ivano-Frankivsk, Zaporizhia, Mykolaiv, Odesa, and Kherson. At the forum, Zelenskiy said Ukraine plans to reconstruct or build airports in 16 regional capitals over the next three years.
- New Buses, Trams and Subway Cars to Rain Down on Ukraine This Year
- Private Concessions to Bring Train Stations and Ports into Modern Era
- With FX Stable, Foreign Investment Flows Back Into Ukraine Bonds
- PrivatBank Execs Charged in 2016 Scam
With the support of a €200 million soft loan from the European Investment Bank, 29 cities across Ukraine will receive almost 1,000 mass transit vehicles – buses, trolley buses and trams, Infrastructure Minister Vladyslav Krykliy said at the government’s Infrastucture Forum. Approved by the Cabinet of Ministers last fall, the loan will help modernize mass transit over the next year in each of the 24 regional capitals, plus five cities.
The EBRD will loan Kyiv €50 million to buy new subway cars, Mark Magaletsky, deputy head of the bank’s Ukraine office, said. Mayor Klitschko said the City Council has voted to provide local guarantees for the loan. The money is expected to go to renewing the metro fleet where 100 of the 800 cars in service are considered to be in critical condition. One new subway car costs about €1 million.
More than a shopping list, the Forum provided a to do list for infrastructure projects committed for this year. Here are highlights. Roads will follow.
Railroad stations concessions to private operators. First in line are: Kyiv-Passenger and Vinnytsia. Next in line are: Dnipro-Main, Kharkiv-Passenger, Mykolaiv, Chop and Khmelnitsky. Minister Krikliy said: “Now we are talking about Odesa and Lviv.”
Seaport concessions: Chornomorsk ferry, Chornomorsk container; Odesa passenger; Berdyansk, Izmail and Mariupol. Last year’s concessions to private foreign investors of parts of Kherson and Olvia, in Mykolaiv region, have brought in $131 million of investment.
Ski resorts: Construction starts this year on two resorts in the Carpathians – Borzhava in Zakarpattia, and Slavske in Lviv. Austrian investors interested in Borzhava.
High speed rail: China, Italy, South Korea and Turkey are interested in building a fast train network across Ukraine. “The only tool for building high-speed train networks is a concession – to realize this, Ukraine needs a powerful investor,” said Volodymyr Zhmak, CEO of Ukrzaliznytsia. “Today these potential investors are looking at Ukraine in terms of organizing high-speed traffic.”
EU rail gauge: Preliminary work on restoring a 20 km section of EU narrow track to connect Uzhhorod with Chop, the Ukrainian border town with rail ties to Hungary and Slovakia. By rebuilding this Hapsburg-era section of track, an $18 million project, Uzhhorod, the largest city in Zakarpattia, would become a transportation hub for trains to Bratislava, Budapest, Belgrade, Bucharest, Munich, Prague, Sofia and Vienna, says Oleksandr Kava, deputy Finance Minister.
Electrification: The European Investment Bank has promised to finance the electrification of tracks to Lysychansk and Severnodonetsk, Kava said. This would almost cut in half – to eight hours – the travel time between Kyiv and Severnodonetsk, capital of Ukraine-controlled Luhansk. As part of the same Restoration of Donbas program, UZ seeks international financing to build a 30 km section of track that would shorten by 200 km the train ride between Mariupol, the Donetsk sea port, and Kramatorsk, the capital of Ukraine-controlled Donetsk.
River locks: The European Investment Bank and the Infrastructure Ministry are preparing an agreement to rebuild the locks on the six dams of the Dnipro cascade. “This year is a preparatory year for us,” Minister Krikliy said, saying the government plans to create a dedicated fund to modernize river infrastructure. Rebuilding all the locks is expected to be a 5-year, $40 million job. The government calculates that for each 1 million tons of cargo moved by river, almost $10 million is saved in road repairs.
The Finance Ministry depressed yields on five out of six bonds sold at auction, the Ministry reports on Facebook. For the hryvnia bonds, yields ranged from 9.2% for 3-month bonds to 12.05% for 3-year bonds. The lone dollar bond, a 1-year bond, went for 3.7%, down 10 bps from the last auction. Overall, the auction raised $377.2 million – up 10% compared to the prior week, according to results posted on the Ministry’s website.
“Given still light positioning, there is a potential for ongoing massive foreign inflows into UAH bonds,” ICU predicted in a 20-page report on the government hryvnia bond market, “UAH bonds – attractive again. Ukraine’s bonds offer relatively high yields against a background of relatively modest macro, credit, and FX risks, especially on a short-term horizon,” writes the Kyiv investment bank. “High real rates, fast economic recovery, and favourable external conditions support the currency…By the end of the year, we see the currency close to current levels (UAH27.5-28/USD).”
The Prosecutor General’s Office charged Oleksandr Dubilet, former CEO of PrivatBank, with forgery and embezzlement of the equivalent of $5 million on the day before the bank was declared insolvent, in Dec. 2016. Dubilet was out of Ukraine when the charges were filed. Until last March, his son, Dmytro, was President Zelenskiy’s Minister to the Cabinet of Ministers.
In the embezzlement case, prosecutors charged two other former executives of PrivatBank. After it was declared insolvent, the bank was bailed out with $5 billion in public money. One of the former executives, Volodymyr Yatsenko, was detained after he fled Dnipro in a private jet bound for Vienna. Agents ordered the pilot to land at Boryspil. His arrest order was signed at 9 am without publicity. Yatsenko was airborne at 10 am. The National Anti-Corruption Bureau is investigating to see if there was an information leak. The jet reportedly is owned by Igor Kolomoisky, the principal owner of PrivatBank before it was nationalized.
Kolomoisky and his business partner Gennadiy Bogolyubov were not charged in the embezzlement case. But they are under investigation in the United States for allegedly laundering money from Ukraine to buy office buildings in the US. Last week, the US Embassy in Kyiv greeted news of PrivatBank charges, tweeting congratulations to prosecutors “for bold actions against former PrivatBank officials, charged with costing Ukrainian taxpayers millions. Courageous actions like these are an important step in the fight against corruption.”
PrivatBank, Ukraine’s largest and most profitable bank, is moving aggressively into the cashless economy. Last month, despite almost three weeks of lockdown, Ukrainians made 137 million cashless payments through PrivatBank trading terminals – almost double the 72 million recorded in January, 2020. The bank reported that shoppers used cards to pay for $11.6 billion worth of goods through PrivatBank terminals, almost one third more than in 2019. The state-owned bank currently has 241,000 point of sale terminals. Almost 90% accept contactless payments by cards or smartphones.
- Goal: Lviv to Kharkiv by Bullet Train in 4 Hours
- South Korea’s Hyundai Wants to Build It
- New Airports for Donbas, Zakarpattia
- To Boost Domestic Flights: a State Airline, Antonovs and No VAT
- Ze: IMF Money by Year End
- Health Min: Vaccines by Weekend
Construction starts this year on the first leg of a planned network of high speed, European gauge tracks across Ukraine, Infrastructure Minister Vladyslav Krikliy told a national infrastructure conference. At buildout of the 2,000 km network, it will be possible to travel from Lviv to Kharkiv at speeds up to 250 km an hour, completing the trip in “3-4 hours” promised President Zelenskiy. Currently, this 1,000 km trip takes 14 hours by car or by InterCity fast trains.
The first step will be to start building this year of 80 km of EU gauge tracks from the Polish border to western Lviv’s Sknilov station, near Lviv airport. This would allow travel from Poland to Lviv without delays associated with the gauge change at the border. As outlined, Ukraine’s high speed rail network would radiate out of the capital: Kyiv-Lviv-Polish border; Kyiv-Odesa; Kyiv-Kharkiv; and Kyiv-Dnipro-Zaporozhia. By the end of this decade, the network is to have 39 trains carrying 5 million passengers a year.
South Korea’s Hyundai Corp. is ready to start negotiating with South Korea’s government and multilateral lenders to win financing for a major part of track construction and for 10 high speed trains, Eun Soo Choi, Hyundai’s vice president for commercial transport, told the Infrastructure forum. “We are ready to provide financing for several projects,” he said in a video address. He said that Hyundai will spend $2 million for a pre-feasibility study for the high speed rail network. This month, Ukrzaliznytsia and Infrastructure Ministry officials are to travel to South Korea to advance discussions.
Ukraine plans to launch a state-owned national airline by the end of this year, Kyrylo Tymoshenko, deputy presidential chief of staff, told reporters at the infrastructure forum. “We have an ambitious goal of creating a state air carrier,” he said. “Ukraine will receive an understandable state national air carrier that can solve not only tourism issues, but also state issues.”
For domestic flights, the airline would use Antonov jets, which are not accepted in the EU. To promote, regional air travel Tymoshenko vowed to follow through on the government’s promise to abolish the VAT tax on tickets for domestic flights.
The location of a new airport for Ukraine-controlled Donbas is to be decided this year, President Zelenskiy said. After seven years of war, the government wants to return air travel to the region. “We could open the Mariupol airport, restore and renovate it, but today the military say that it is dangerous,” Zelensky told reporters. Berdyansk and Zaporizhia airports are too far from the Donbas. Other options would be to upgrade Kramatorsk airport in Donetsk or Severodonetsk airports in Luhansk. Both airports are only used by the military and may be considered too close to the front lines for civil aviation.
Zakarpattia’s new airport will probably be in Seredenje, a farming town of 4,000 people, midway between the region’s two most populous cities, Uzhgorod, the capital, and Mukachevo. Uzhgorod’s airport borders on Slovakia, creating air traffic control problems. Mukachevo has an abandoned Soviet-era air strip. The Seredenje compromise means that about 250,000 people would be within a 45-minute drive of the regional airport.
An international brand hotel will soon replace the long-shuttered hotel Odesa at the city’s cruise passenger terminal, Tymoshenko, the deputy presidential chief of staff, said. Opened in 2001, the 158-room hotel on a wharf jetting into the Black Sea was first run by the Kempinski Hotel Group. It closed in 2014 with the suspension of cruise ship port calls to Odesa. Tymoshenko said: “There is already an investor. The final stage is underway.”
UAE companies “are talking about a big project – the construction of a large marina in Odesa and a large separate port,” President Zelenskiy said, fresh from a 2-day working visit to the United Arab Emirates. One company comes to Ukraine this week to talk about investing in river ports, he said. Last summer, Dubai’s DP World bought a 51% stake in the TIS Container Terminal in Ukraine’s biggest port, Yuzhne, 40 km east of Odesa city.
President Zelenskiy said he is ‘confident’ that Ukraine will get IMF funds by the end of this year. If a deal cannot be reached on the remaining $2.9 billion, “there is plan B, plan C,” he told reporters at the Ukraine 30. Infrastructure Forum. He blamed the pause in talks declared by the IMF 10 days ago on “a lot of lobbyists who are individually working with the IMF and telling them what’s going on in Ukraine. They say: ‘Oh, things are so horrible here! If only we were (in power), we would have done better’.”
From London, Timothy Ash speculates that delays in receiving tranches from the $5 billion program could be because Ukraine’s government knows it can borrow at low rates in international markets while it gambles that the Biden administration will eventually lean on the IMF to soften its conditions. Key conditions for a resumption of IMF disbursements are purges of the Higher Court of Judges and the Constitutional Court, steps seen as essential for building a judicial system that investors would trust.
“Zelenskiy needs to understand that the Fund is in the end a creditor,” writes Ash, senior emerging market strategist at BlueBay Asset Management. “It sets the terms, as it is lending the money at a discount interest rate…With yields on Ukrainian Eurobonds already 60-70 bps higher over the past few weeks, maybe it would be opportune for the Ministry of Finance to return to market sooner, rather than later.”
With the first 500,000 coronavirus vaccines expected to arrive in Ukraine from India, Health Minister Maksym Stepanov sketched out the latest information on future deliveries:
- 15 million doses of the Novavax/AstraZeneca from India’s Serum Institute
- 8 million doses under the global COVAX program for poorer countries.
- 1.9 million doses of Sinovac vaccines from China
Ukraine’s goal is to vaccinate half of the adult population – about 15 million people – by the end of this year. Ukraine’s EU land neighbors – Poland, Slovakia, Hungary and Romania — have already vaccinated 7% of their populations.
- Ze Bans Pro-Russia Oligarch Doing Business for 3 Years
- Ukraine’s Trade with Russia, CIS Dwindles
- EU Bank to Funnel €700 million in SME Loans
- Dnipro Builds Much of Antares Rocket for NASA
- Banks Move Toward Internet
- Ukraine’s 20,000 km Priority Road Network to be Rebuilt by 2023
President Zelenskiy signed a decree freezing the assets of Ukrainian politician and businessman Viktor Medvedchuk and banning him from doing business in Ukraine for three years. The decree also applies to Medvedchuk’s wife, Oksana Marchenko, and to his business partner Taras Kozak, another Rada member who was the titular owner of three pro-Russian TV stations closed in Kyiv three weeks ago. Overall, the bans apply to eight people – three Ukrainians and five Russians – and to 19 companies.
Zelenskiy also moved to nationalize PrykarpatZapadtrans, a Medvechuk-owned company that runs the Ukraine section of a 1,433 km Russia-Belarus-Hungary diesel pipeline. On independence in 1991, this pipeline from was taken over by Russia’s Transneft. In 2016, the Ukraine section was sold to Medvedchuk. Ukraine’s government says both moves were illegal.
Ukraine’s National Security and Defense Council accused Medvedchuk of “financial terrorism.” In a Friday night briefing to reporters, security council spokesman Alexei Danilov said Medvechuk and three of the sanctioned individuals own an oil refinery in Russia that delivers fuel to Russia-controlled Donbas.
The Security Council also charged that illegal shipments of coal from occupied Donbas helped fund the three TV channels Kozak owned. In 2016, the Ukrainska Pravda published an investigation alleging that Kozak sold to Ukraine coal from occupied Donbas, passing it off as South African coal. Ukraine stopped trade with Russia-controlled Donbas in March 2017.
Ukraine’s government also put on a seizure list five corporate jets used in the past for flights between Kyiv and Moscow. Scheduled commercial air service between Ukraine and Russia stopped in October 2015.
Medvedchuk said that the measures will not “scare me and prompt me to flee.” In the Rada, he heads the largest opposition group – the Opposition Platform — For Life party. This pro-Russia coalition has 44 seats out of a total of 424 in the parliament. The party denounced the sanctions, saying: “Ukraine today is one step closer to dictatorship.” The Kremlin called the sanctions “very alarming.”
The US Embassy in Kyiv tweeted: “We support Ukraine’s efforts to protect its sovereignty and territorial integrity through sanctions. Medvedchuk has been under U.S. sanctions since 2014 for undermining Ukraine’s security, territorial integrity, and democratic institutions.
The EU is Ukraine’s largest trading partner, accounting for 41% of all foreign trade last year, Trade Representative Taras Kachka reports on Facebook. Russia and CIS countries play a diminishing role. Thanks to a near doubling of Ukraine’s exports to China last year, Ukraine now trades more with China than with the CIS countries. Ukraine’s imports from Russia fell by 35% last year, causing Russia to cede to Poland the position of Ukraine’s third largest trading partner, after China and Germany.
Prime Minister Shmygal, fresh from a 2-day trip to Brussels, told the Rada: “Already more than 14,000 small and large Ukrainian companies are exporters of our products to the EU. This list will only grow.”
To develop Ukraine’s small and medium-sized enterprises, the European Investment Bank is ready to allocate €700 million in loans, Prime Minister Shmyhal told the Rada. “Loans with a zero rate – 0.12% per annum – to support small and medium enterprises in Ukraine,” he said during Question Hour. Separately, Jean-Erik de Zagon, the EU bank’s representative in Ukraine, told the UBN, that €800 million had been allocated to Ukraine 2015, but only €100 million had been disbursed. Now, there will be push to extend small business loans, in hryvnias, through half a dozen banks here.
Turkey-Ukraine trade held to pre-pandemic levels last year, finishing around $5 billion. If a Turkey-Ukraine free trade agreement is signed, “we will reach $10 billion very quickly,” Ukraine’s Ambassador to Turkey Andrii Sybiha told the Ukrainian-Turkish Chamber of Commerce and Industry last week. Despite the pandemic restrictions, about 1 million Ukrainians visited Turkey last year, compared to 1.5 million in 2019. Turkey accounted for almost 5% of Ukraine’s overall foreign trade last year.
Carrying a 3,700 kg payload, an unmanned Cygnus cargo spacecraft is to dock this morning with the International Space Station. Ukrainian design and equipment largely built the first – or lower – stage of the Antares rocket that successfully launched from Wallops Island Space Flight Center, Virginia, Pivdenne Design Bureau reports from Dnipro. The 14th Antares launch with Ukrainian participation, the latest rocket had a first stage designed by Pivdenne and manufactured by Pivdenne Machine-Building Plant, in cooperation with: Hartron-ARKOS, of Kharkiv; Kyivprilad, of Kyiv; Hartron-YUKOM, of Zaporizhia; and CHEZARA and RAPID, of Chernihiv. The payload includes a SBC-2 supercomputer, developed by Hewlett Packard and NASA, and a number of cube and nanosatellites for launching into orbit.
As Ukrainians move toward cashless transactions and internet banking, banks closed 11% of bank branches last year, to 7,100, the National Bank of Ukraine reports in its banking sector review. The closing of 868 branches contributed to banking layoffs of 5,000 employees. The number of ATM machines dropped last year by 3%, to 34,800. At the same time, point of sale card terminals increased by 10.6%, to 386,500. In the fourth quarter alone, PrivatBank and other state banks added 11,000.
Over the next three years, Ukraine’s entire 20,000 km network of roads of ‘national importance’ is to be repaired or rebuilt, Infrastructure Minister Vladyslav Krikliy, said on the ‘Healthy Policy’ TV program. “The goal is to restore 20,000 km by the end of 2023,” he said. Of Ukraine’s 164,100 km of paved roads, 20,688 km are classified as of ‘national importance.” This year, Ukravtodor, the state highway agency, is to upgrade one third, or 6,800 km, plus 150 bridges.
Six months after opening, the Orlivka, Ukraine – Isaccea, Romania ferry across the Danube carried its first bus, on the Odesa-Varna, Bulgaria route. With coronavirus controls easing, the ferry started taking cars and buses one week ago. The ferry cuts out a 1-hour, 100 km detour to the nearest cross-Danube bridge, at Giurgiulești, Moldova.
The original English version is from our partner UBN – Ukraine Business News. For more information and news archive, go to: www.ubn.news.
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