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  • Ze Moves Most of State Farm Land to Local Control
  • Naftogaz Goes to Market With $335 Million in Eurobonds
  • Ukravtodor Kicks Chinese Company off Highway Job
  • Windrose Flies to Four Balkan Capitals

With the stroke of a pen, President Zelenskiy transferred 6% of Ukraine’s 33 million hectares of farmland from state ownership to local community ownership. “On October 26, all newly created communities should receive land in communal ownership and will be able to use funds from land use for the development and welfare of their communities,” he said, referring to the day after Ukraine’s Oct. 25 local elections. “We return lands from the center to the people.”

By superimposing Ukraine’s modern cadastral map on the public map of Ukraine, it became clear this summer that 5 million hectares of farmland were moved from state ownership to private ownership since Independence, says Roman Leshchenko, head of the State Service for Geodesy, Cartography and Cadaster. Participating in the “Land to the People” forum in Chernihiv, alongside Zelenskiy, he said his office would soon post online a national land ownership map, completed with owed taxes. After the Oct. 26 land transfer, he said, 750,000 hectares will remain in the hands of the state – for schools, jails, military training grounds, and agricultural colleges and research stations.

Naftogaz is offering a bond issue of $335 million in an exercise to retire bonds coming due in 2022 and 2024. The state energy company’s priority is to buy back $335 million worth of bonds maturing in July 2022. Once that demand is covered, Naftogaz plans to use the unused portion of money raised to buy back some of the €600 million worth of bonds maturing July 2024. The goal is to extend the maturity of Naftogaz debt. The 2022 Eurobonds have a yield of 7.375% and 2024 Eurobonds have a yield of 7.125%. The deadline for bondholders to apply is Oct. 27. Fitch Ratings has rated the new notes ‘B’. Citibank is the sole arranger.

Concorde Capital’s Alexander Paraschiy writes:Naftogaz is the third Ukrainian bond issuer who initiated a debt extension this fall, after Metinvest (who tendered its 2021 and 2023 notes) and Kernel (who is tendering its Jan. ’22 notes). The timing of Naftogaz’s debt operation does not look optimal, in our view…Namely, there is uncertainty about the Ukraine-IMF deal, meaning Ukraine’s sovereign risk is high, while the recent interim report of Naftogaz (with losses at the EBITDA level) does not add optimism about the company’s prospects…All this means Naftogaz is likely to see a higher rate on its new bonds as compared to any of the existing notes.”

By increasing yields, Finance Ministry almost doubled its sales of government hryvnia bonds at the weekly auction on Tuesday. The government sold UAH6 billion worth of bonds, compared to UAH3.4 billion at the Oct. 7 auction. To increase investor interest, the Ministry said yields on one-year bonds by 11 basis points, to 10%, and by 32 basis points on two-year bonds to 10.82%. this week, high demand is expected for the Ministry’s auction of one-year dollar denominated bonds.


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Concorde Capital’s Evgeniya Akhtyrko writes: “MinFin finally managed to boost UAH auction receipts amid hiked interest rates. The one-year government bonds at around 10% are likely to be the trade-off that most market players will agree upon for the nearest future.“

The central bank’s Council is expected to meet and to vote to fire the last two Board members from the Poroshenko era: deputy governors Kateryna Rozhkova and Dmitry Sologub. NV business news site quotes a source close to the National Bank of Ukraine saying: “100% are going to vote.” If these dismissals take place, they will complete the purge of the Board, a process that started four months ago with the forced resignation of Yakiv Smoliy, the governor. In recent days, the G-7 ambassadors, the EU ambassador and the IMF resident representative have spoken against the purge of the Board.

Ukravtodor is terminating its 4-year-old contract with China’s Sinohydro to build a 22 km concrete bypass around Zhytomyr, the state highway agency reported. Ukravtodor charges the company is late, does not answer requests to repaid shoddy work and does not explain its delays. “It’s a shame that cooperation with Sinohydro reached the point of no return,” Alexander Kubrakov, head of Ukravtdor, said. “We cannot afford to hesitate or wait for reciprocal steps – Ukraine needs a road right now.” The €42 million project is partly financed by the EBRD and the European Investment Bank. Sinohydro wasted two years by ignoring the local market and building a camp for its workers and building production facilities for construction materials, writes the Center for Transportation Strategies.

A series of interview videos with CEOs on how they cope with the Covid crisis has won the “Creative Network Award” for the American Chamber of Commerce in Ukraine. Directors of the 43 American chambers in Europe voted to selecte the video series: Leadership in Times of Crisis. Started at the height of the lockdown, the videos feature AmCham President Andrew Hunder interviewing a series of CEOs of local units of multinationals, including GE, Grammarly, Hyatt, Metro, L’Oreal, PWC, Roche, Shell and CMS Cameron McKenna.

Windrose is becoming Ukraine’s air bridge to the Balkans, starting flights from Kyiv Boryspil to Ljubljana, capital of Slovenia, on Oct. 24, to Skopje, capital of North Macedonia, on Dec. 6, and to Belgrade, capital of Serbia, Dec. 7. Last month, Windrose started flying to Zagreb, capital of Croatia. Last summer, Windrose flew its regional jets and turboprops from Kyiv to three Croatian tourist destinations on the Adriatic – Dubrovnik, Pula and Split. On the domestic side, Windrose flies from Kyiv to seven Ukrainian cities.

This winter, Lviv airport may save money by not plowing snow from its 3.3 m runway at night, Tatiana Romanovskaya, airport director general, tells Avianews.Since no night flights are planned, significant resources can be saved by not working during this time and not constantly clearing the strip,” she said. Emerging from quarantine, the airport offered 50% discounts on airport services to returning airlines. With traffic down by ‘only’ 58% through September, to 703,000, Lviv has displaced Kyiv Sikorsky as Ukraine’s second busiest airport. Lviv aims to finish this year with 1 million passengers, the level of 2017. Next year, Romanovskaya hopes to handle 1.5 million passengers, almost the volume of 2018.

After the hottest September in a century, Kyiv continues to set heat records. In the 27th heat temperature record, the Wednesday-Thursday night temperature did not fall below + 14.5°С, reports the Central Geophysical Observatory. This is 2.5°C. above the previous record. Last month the average air temperature was +18.4° C, exceeding the climatic norm by 4.5°. Last summer was Kyiv’s second hottest since record keeping started in 1881. The average air temperature was + 21.7 °C, exceeding the climatic norm by 3°C.

This week, night temperatures are to dip toward freezing.  Mayor Klitschko promised last Friday to turn on the municipal heating system. With 2,700 km of hot water pipes heating 12,000 apartment buildings, it takes one week for the heat to reach all apartments. The Mayor said heating will be important in the fight against coronavirus, the flu, and acute respiratory viral infections.

  • Zelenskiy Flies to Turkey to Sign Military Agreement
  • Two Countries Cooperate on Combat Drones, Missile Engines, Aircraft
  • Dnipro’s Pivdenmash Builds Rocket Engines for NASA and EU
  • Ukraine’s Rocket Man Plans to Launch Alpha From California, Breaking Into Midsize Space Cargo Market

President Zelenskiy visited Turkey to sign a bilateral military cooperation agreement. Reflecting growing arms technology ties, Zelenskiy’s 3-day visit follows the visit of Turkey’s Defense Minister Hulusi Akar to Kyiv in July and the visit to Turkey in late August of a Ukrainian arms industry delegation, led by Oleh Urusky, Deputy Prime Minister and Strategic Industries Minister.

Interested in military drones and missile engines, the Ukrainians toured the production facilities of Turkish Aerospace Industries, Roketsan, ASELSAN, and Baykar Makina, Turkey’s leading drone developer. Back in Kyiv, Urusky told Ukrinform, the state news agency, Turkey and Ukraine are creating “a strategic alliance” for defense production. On Sept. 1, ASELSAN, Turkey’s leading defense industry contractor registered a company in Ukraine for “marketing and business development.”

Ukraine plans to buy 50 Bayraktar TB2 combat drones and set up a large-scale assembly line in Ukraine for the unmanned fixed wing aircraft, reports Defense World, a Virginia-based defense news site. “We have agreed on setting up of a large-scale assembly line for these drones in Ukraine,” Vadym Nozdr, CEO of  Ukrspetsexport, tells LB.ua. “Currently, we are choosing a place for the production of the drones.” Ukraine’s Army has already purchased 12 drones and three ground control stations for a reported $69 million.

Ukraine will eventually export the combat drones under license from Baykar Makina, Nozdr said. Ukrspetsexport, part of the UkrOboronProm conglomerate, will have to right to sell the drones to countries that do not already buy them from Turkey. In the last two years, Bayraktar TB2s have been used in fighting in Libya, Syria and Iraq. Today, Azerbaijan is using them against Armenian forces in Nagorno-Karabakh. As of June 8, at least 19 TB2s are confirmed as destroyed in action, reports Lostarmour website.

Zaporizhia-based engine-maker Ivchenko-Progress is producing 12 AI-35 engines to power Turkey’s new Gezgin cruise missile. Similar to the US Tomahawk, the Gezgin can be fired from ships and has a range of 1,000 km, roughly the east-west length of the Black Sea. “We make AI-35 for the Turks — this is for a cruise missile,” Igor Kravchenko, head of the manufacturing for Ivchenko-Progress, tells Ukraine’s Defense Express news site.

“Turkey-Ukraine work on missile engine could open the door to tech transfer,” Defense World, the US news site headlined. Their Ankara-based reporter, Burak Ege Bekdil, writes: “Engine technology cooperation between Black Sea neighbors Turkey and Ukraine could turn into a longer-term business deal involving aircraft production and technology transfer, Turkish officials and analysts agree.” In mid August, Oleksandr Los, the new head of Antonov, Ukraine’s aircraft manufacturer, visited Turkey.

Kyiv’s Artem Holding, manufacturer of Luch Design Bureau rockets, has completed tests of RS-80, a new unguided aircraft missile, Xinhua, the Chinese news agency,  reported Friday. Designed to destroy tanks, armored personnel carriers, and self-propelled guns, the missile is to be manufactured for Ukraine’s armed forces and for export.

Dnipro-based Pivdenmash, formerly Yuzmash, is building rocket engines with Northrop Grumman for NASA’s Antares project and engines for the European Space Agency’s Vega rocket, Volodymyr Usov, Head of Ukraine’s State Space Agency, said at the conference Doing Space In UA. Ukrinform reports he said Ukraine should focus on the niche of producing engines for rockets that place satellites in orbit.

Powered by Pivdenmash engines, an Antares rocket blasted off from NASA’s Wallops Flight Facility in Virginia on October 2. Three days later, the Cygnus resupply spacecraft docked at the International Space Station. NASA reports the 3,500 kg cargo includes a $23 million experimental space toilet and experimental equipment for removing ammonia from urine, leaving drinking water and creating energy. Volodymyr Yelchenko, Ukraine’s ambassador to the US, attended the launch and wrote later: “The Antares Stage 1 Core Structure was developed by Pivdenne SDO and manufactured by Pivdenmash in cooperation with such Ukrainian enterprises as Hartron-ARKOS (Kharkiv), Kyivprylad (Kyiv), Hartron-Yukom (Zaporizhia), CHeZaRa, Rapid (Chernihiv), and others.”

By December, Ukrainian entrepreneur Max Polyakov hopes to launch from California’s Vandenberg Air Force Base his first rocket, Alpha. Designed to carry a 1,000 kg payload, the 29-meter tall Alpha would place a small satellite into low Earth orbit. Polyakov, a Dnipro native, estimates he has invested $150 million into the project, a figure only topped by Elon Musk with Space X and Jeff Bezos, with Blue Origin.

“A rocket mogul is preparing to launch a union of U.S. and Soviet technology” headlines a 4,000-word feature in Bloomberg Business Week on Polyakov and his Austin-based company Firefly Aerospace. Polyakov believes he can occupy a profitable niche for payload delivery, between the 300 kg of New Zealand’s Rocket Lab and the 8,000 kg of SpaceX, Blue Origin and NASA rockets. For his project, he says he employs 300 people in the US and 4,000 in Ukraine. In three to five years, “we will be at the right time, at the right place, with a product that eats the market,” he tells Bloomberg’s Ashlee Vance.

“If he can join SpaceX and Rocket Lab in regularly launching satellites into orbit, the additional hundred million dollars will have been worth it,” writes Vance, who authored a book on Musk and SpaceX. “Firefly’s value would almost certainly shoot into the billions.”

Much like IT outsourcing companies in Ukraine, Polyakov is tapping into the nation’s Soviet legacy of high level science, technology, engineering and math education for the modern world. “Even after all these years and many advances in rocket science, the Ukrainians still know how to build some critical rocket components, better than anyone else,” Bloomberg writes. Noting Polyakov’s high energy and ambition, the magazine says: “Firefly also has plans for a bigger rocket called Beta, as well as for its own satellites, propulsion systems, a reusable spaceplane, and a lunar lander.”

In a key step toward launching the first Alpha rocket, Firefly reports that on Sept. 20 it successfully performed a simultaneous test of its four Reaver engines at a testing bay in Briggs, Texas. Last January, a test resulted in an accidental kerosene fire. Last year, Dnipro’s Yuzhmash signed a $15 million deal to supply engine rocket parts for Firefly’s Reaver engines.

With new corona infections in the EU running at 10 times the levels of early August, Wizz Air is canceling 24 flights from Ukraine to EU cities, reports Lowcostavia.com.ua. Cancellations include Wizz Air flights from Kyiv Sikorsky to Bratislava, Katowice, Larnaca, Lisbon, Riga, Salzburg, and Tallinn. From Lviv, Kharkiv, Odesa and Zaporizhia, cancellations include flights to Berlin, Budapest, Dortmund, Gdansk, Katowice, Krakow, Milan, Vienna and Wroclaw.

  • Poland Backs Black Sea to Baltic Sea Cargo Shortcut
  • More Chinese Container Trains Cross Ukraine for Central Europe
  • Cabinet Extends Corona Quarantine Through Christmas
  • As Kyiv Hospitals Fill Up, Ze Tells Klitschko to Put Beds in Sports Palace
  • UIA Announces Reduced Winter Flight Schedule

Fresh from winning reelection last July, Polish President Andrzej Duda came to Odesa yesterday and spun a vision of a Gdańsk to Odesa transportation corridor, a highway shortcut that would speed container traffic in the 2020s between the Baltic and the Black Sea. “This new transport corridor between Poland and Ukraine..[will have] the potential to transport goods from Western Europe, Scandinavia, Turkey and East Asia,” he said at the Ukrainian-Polish Economic Forum.

Instead of 18 days by boat, containers would move between Odesa and Gdańsk in 18 hours by truck. The highway distance is 1,570 km. By contrast the shipping distance, through the Strait of Gibraltar, is 8,000 km. Ukrainian officials say they already are rebuilding the 60% of the Gdańsk-Odesa ‘GO Highway’ that is in Ukraine. Infrastructure Minister Vladyslav Krikliy says $175 million is being spent this year to rebuild 100 km. Next year, work starts on rebuilding the 300 km of the GO Highway north of Odesa, largely funded by €900 million loaned by the EBRD and the European Investment Bank.

“We’ll be supporting Ukraine’s ambitions in its development as a logistics transit country in Eastern Europe,” said Duda, whose term in office runs through 2025. A modern highway with a smooth border crossing would draw container cargo from Central Asia, the Caucasus, and Turkey. “I am convinced that Ukrainian sea and land terminals can present to customers an attractive offer for the transportation of goods,” said the Polish president. He came to Odesa with Poland’s Infrastructure Minister Andrzej Adamczyk and Gdańsk Seaport Authority Chairman Alexander Golodnitsky.

Ukrainian officials focused on mechanics: winning more truck transit permits from Poland, creating customs zones designed to speed clearances of trucks crossing the border, and expansion of a EU4Digital pilot program where selected Ukrainian and Polish companies electronically exchange invoices through the Peppol eDelivery network.

Last week, the 10,000th China-Europe container train passed through the Xinjiang border terminal with Kazakhstan. From January to September, 3,243 China-Europe container trains passed through Xinjiang, a 32% increase over the same period last year. Most roll through Belarus, entering the EU at the Polish border.

Two Central European rail companies plan to increase their China-EU trains through Ukraine to once a week. Rail Cargo Group, a subsidiary of Austrian Federal Railways, ÖBB, says its new route through Ukraine is the fastest way to deliver containers from China to Central and Southeastern Europe. Similarly, Martin Kubeck, business development director of Metrans, a Czech company, says the Ukraine route is now the fastest to Central Europe. This is partly due to geography and partly due to congestion at the rail gauge break at the Poland-Belarus border.

With Chinese shipping demand strong for the weekly China-Kyiv freight train, Ukrzaliznytsia predicts the train will soon increase by 50%, to 64 containers.We are planning to establish a return flow of goods to China,” Alexander Polishchuk, UZ executive, tells the Center for Transportation Strategies. “Customers in Ukraine still do not know about this service.” It costs about $3,000 to ship a 40-foot container from Ukraine to China, generally an 18-day trip.

With new coronavirus infections averaging 5,000 a day, the Cabinet met in extraordinary session and decided to extend the “adaptive” quarantine through Dec. 31. University students are to vacate dormitories, go home, and switch to remote learning for one month. Elementary and high schools start their traditional fall break early, returning Oct. 30.  In Kyiv, gyms are to close and restaurants to stop serving after 10 pm. Sporting events are to take place without spectators.

In Kyiv, there are now 2,730 beds in 22 hospitals dedicated to treating Covid patients, Mayor Klitschko told reporters. Despite this increase, the occupancy rate of Covid beds is around 70%. Nationwide, 66% of 52,000 corona unit beds are occupied. President Zelenskiy told Klitschko to prepare the Sports Palace for overflow patients. In response, the Mayor said state medical facilities should open their 11,000 beds in Kyiv to city residents.

 

Corona Updates:

    • Contributing to Ukraine’s 1-7 football loss to France in Paris one week ago, Ukraine’s top three goalkeepers were sidelined by coronavirus, leaving the task of defending the net to retired goalkeeper Oleksandr Shovkovskiy, now 45 years old.
    • 1,800 police officers were infected last week with Covid, Interior Minister Arsen Avakov told the Cabinet.
    • In Russia-controlled Crimea there are 6,806 Covid cases, including 1,253 in the port city of Sevastopol, the Crimean Human Rights Group reported on Facebook. In the Russia-controlled portions of Luhansk and Donetsk, the situation is “critical,” Pavlo Lysianskiy, Ukraine’s Human Rights Commissioner for the two areas, wrote on Facebook.
    •  Stanytsia Luhanska, the only crossing between the Russia-controlled and Ukraine-controlled portions of Luhansk region will be closed through Oct. 31 for quarantine control reasons.
    •  Former President Poroshenko has recovered from coronavirus and returns to work, he wrote on Facebook.
    •  Evghen Dykhne, president of Ukraine International Airlines, is recovering from a 9-day battle with coronavirus. This included almost one week in Kyiv’s Alexander Clinical Hospital, he writes on Facebook from self-isolation.
    • The Dean of the Geography Faculty of Kyiv’s Taras Shevchenko National University died last week of Covid.
    • Concorde Capital’s Zenon Zawada writes: “These are setbacks – hurting the country economically for the year’s remainder – that essentially nullify the success achieved by the Zelensky administration in the first months of the virus.”

Ukraine GDP drop through August eased to 5.8% yoy, down from 6.2% yoy through July, estimates the Economic Development Ministry.

Concorde Capital’s Evgeniya Akhtyrko:  „The economic decline is halting rather quickly amid high consumer demand reflected by retail trade growth and accelerated renewal in construction, which has been prompted by government spending in road building.”

UIA has announced a reduced winter schedule. It will be in effect from Oct. 25 to the end of March. Domestic destinations from Kyiv Boryspil are reduced to Kharkiv, Lviv and Odesa. UIA will fly to 18 foreign airports, largely in Europe and the Caucuses. Frequencies are reduced and there are no longhaul flights to Asia or North America.

Through September, Ukraine’s air traffic was down 63% yoy, hitting 6.9 million passengers. Traffic at Kyiv Sikorsky was down 70%, to 601,000 passengers. Traffic at Lviv was down 58%, to 703,000.

  • IT Co. Wants to Build $1 Billion Data Center Next to Hydro Plant
  • American Quits Naftogaz Board
  • Inflation Down to 2.3%
  • Poland-US JV Forms to Drill for Oil and Gas in Lviv
  • Half a Million Ukrainians Frolic on Turkish Riviera

TECHIIA, a Kyiv-based international IT company, wants to build a $1 billion energy intensive data processing center on 90 hectares next to the Kakhovka Hydroelectric Station in Nova Kakhovka, Kherson. Based on cheap electricity, the 500 MW capacity ‘Ecotechnopark’ would draw power from the power station on the Dnipro, and from Zaporizhia Nuclear Power Station, at Enerhodar, 150 km upriver. Excess heat from the data center would heat greenhouses in Nova Kakhovka to grow fruits and vegetables year around, the company says.

TECHIIA is prepared to invest the first $15 million and is looking for investors for the first $200 million phase. Digital Transformation Minister Mykhailo Fedorov said last week at the project’s announcement, with TECHIIA Managing Partner Yura Lazebnikov: “The construction of such a powerful data center will allow Ukraine to provide high-speed data processing services and create new jobs. I am confident that our country is able to become the most powerful IT hub in Central and Eastern Europe.”

American Amos Hochstein has quit the Naftogaz supervisory board, the second Westerner to resign from a state company board in two weeks. Hochstein, a former ‘energy diplomat’ for the State Department, complained of a “negative trend” of politicians seeking to reinstate corrupt practices. “The company has been forced to spend endless amounts of time combating political pressure and efforts by oligarchs to enrich themselves through questionable transactions,” he wrote in parting essay posted on the Kyiv Post. Two weeks ago, Anders Aslund, the Swedish economist, quit the supervisory board of Ukrzaliznytsia, the state railroad, charging: “The President and his loud MPs don’t believe in good corporate governance.”

In response to Hochstein, Andriy Kobolyev, Naftogaz CEO, thanked him for his help in the successful suit against Gazprom and promised: “[Naftogaz] management will further strive for transparent decision-making and will prevent backsliding towards old corruption schemes.” Clare Spottiswoode, the British energy executive who chairs the Naftogaz supervisory board, said: “In the current state of corporate governance, Naftogaz Group is resilient to outside influence, and the supervisory board will continue to protect the company from political influence and any attempts to roll back anti-corruption steps in the state-owned energy sector.”

Ukrposhta has climbed to the 30th spot in a UN ranking of the world’s 170 national postal operators. Ranking for reliability, availability, relevance and resistance to shocks, the Postal Development Index is maintained by the Universal Postal Union to chart progress toward efficiency. Alluding to a new €30 million European Investment Bank loan to build three new postal sorting centers, Ihor Smeliansky, Ukrposhta general director, wrote on Facebook: “I am confident that after the construction of new sorting centers…and adoption of the law on the postal bank, we will take our place among the leaders.”

Consumer inflation in September fell to 2.3% yoy, down slightly from 2.5% in August, reports the State Statistics Service. The National Bank of Ukraine predicts that energy prices will rise this fall, pulling up inflation to finish the year within bank’s target range of 5%. Last year, Ukraine’s annual inflation was 4.1%, the lowest in six years.

Concorde Capital’s Evgeniya Akhtyrko writes: “The abundant supply of domestic fruits and vegetables drove the food component of inflation downward in helping to eke out relatively low inflation in September….We expect consumer inflation will accelerate in the last quarter of the year amid renewed inflation for food prices. We expect consumer inflation to land at 4.8% year to date in 2020 vs. 4.1% year to date in 2019.”

Andrzej Duda, president of Poland, one of Ukraine’s top foreign investors and trading partners, opened the Ukrainian-Polish Economic Forum with President Zelenskiy. Meeting Zelenskiy, Duda noted the 1,200 Polish companies invest in Ukraine and that bilateral trade is about €7.5 billion a year.

PGNiG, Poland’s state oil and gas company, signed an investment agreement with US-based Energy Resources of Ukraine to jointly explore and produce oil and gas from a license area near Poland’s border with Lviv region. PGNiG President Jerzy Kwieciński noted the block is an extension of Przemyśl geological field. He said: “Our employees have knowledge and expertise gained over 60 years of exploration and production operations in the Rzeszów region.”

Separately, Kwieciński signed a confidentiality agreement with Ukraine’s State Property Fund to gain access to data on state energy properties coming up for sale. He said: “We believe that further energy market integration will contribute to strengthening energy security across the region.”

Busfor, the online bus ticket service, reports that this summer’s most popular international bus route were all to Poland. Alexey CEO of Busfor.ua, said that because of corona restrictions, Bulgaria fell out of summer and the most popular routes were: Kyiv-Warsaw, Kyiv-Wroclaw, Kyiv-Krakow, Poznan-Kyiv and Kyiv-Katowice. Overall, international bus travel was down 70% due to coronavirus controls.

Ukraine will upgrade its consulate in Wroclaw to consulate general, Zelenskiy said. With an estimated 1 million Ukrainians working in Poland, Ukraine has its largest consular network in the world in Poland – the embassy in Warsaw and consulates in 10 Polish cities: BydgoszczChelmGdanskKrakowLublinPrzemyslRzeszowSzczecinWroclaw and Zielona Góra. By contrast, Poland has its embassy in Kyiv consulates in five Ukrainian cities: KharkivLutskLvivOdesa and Vinnytsia.

Over the last four months, 500,000 Ukrainian tourists vacationed in Antalya, the Turkish Mediterranean often called the Turkish Riviera. Responding to the corona pandemic with the Safe Tourism Certificate program, Turkish officials believe they saved the second half of their peak season. Last year, 1.6 million Ukrainians flew to Antalya, Nadir Alpaslan, Turkey’s deputy culture and tourism minister, told a meeting of Turkey-Ukraine Joint Tourism Commission in the Antalya, reports Anadolu Agency.

 

On the Move:

Borys Danevych, a legal expert in life sciences – pharmaceutical, biotech, and medical – joins as partner the firm CMS Cameron McKenna Nabarro Olswang in Kyiv. Formerly, the owner and head of Danevych.Law, a leading life sciences boutique law firm in Ukraine, Danevych brings with him his legal and administrative team: Anastasiya Filipiuk, senior associate; Artem Grudinin, associate; Anastasiya Maistruk, associate; and Iryna Tvardovska, administrative executive. Graham Conlon, managing partner of CMS Cameron McKenna in Kyiv, comments: “With life sciences increasingly attracting the global spotlight, this important expansion of the team demonstrates our ongoing commitment to delivering best-in-class advice for our clients.”

Ilya Timtchenko, former business editor of the Kyiv Post, has been hired to cover Ukraine and the region for REDD, a new, online fixed-income intelligence and analytics platform focused on emerging markets. A graduate of Gordon College in Massachusetts, Timtchenko covered business for five years, from 2014 to 2019. REDD, or Risk Event Driven Distressed Intelligence, is based in New York and has reporters in London, Istanbul, and Cape Town.

  • Covid Upsurge Means More Controls, More Recession
  • Wheat Prices Jump 15%
  • Late Rains Help Farmers
  • EBRD to Loan €450 Million for Kyiv-Odesa Highway, Lviv Bypass
  • World Bank Loans $65 Million for Luhansk Roads
  • Chornobyl Trees Block New $300 million Nuclear Spent Fuel Storage Facility

With Kyiv city recording 500 new Covid-19 infections a day, the city moved to the stricter “orange” quarantine level and adds new hospital beds.  After Kyiv region reported that 152 students and 169 teachers are sick with Covid, acting Education Minister Serhiy Shkarlet asked school authorities around the nation to prepare to shift to distance learning in coming days. In the latest high profile infection, Ihor Smelyansky, CEO of Ukrposhta, the state postal company, wrote on Facebook that he returned from Brussels last week with Covid.

On Friday and Saturday, new infections nationwide averaged 5,766 a day. On Saturday morning, the reported daily death toll hit 108. In Kharkiv Region, hospitals are full, says Oleksiy Kucher, the regional head. With 900 new hospitalizations a day, Health Minister Maksym Stepanov told TSN TV news service: “We are now starting to prepare for deploying makeshift hospitals for coronavirus patients. The situation is more serious than ever since the beginning of the epidemic.”

With local elections taking place in some days, local officials are reluctant to reimpose a severe quarantine.The suspension of enterprises and the closure of the city will finally finish off the economy of Poltava and the country as a whole,” Poltava’s Acting Mayor Oleksandr Shamota said addressing a protest by small business owners. Poltava is not alone as The New York Times reports in an overview of Europe: “As Virus Surges in Europe, Resistance to New Restrictions Also Grows.”

With the Covid-recession extending across Europe, Ukraine is suffering from economic contagion, the EBRD reports in its most recent regional report. The EBRD’s now predicts Ukraine’s GDP will shrink this year by 5.5%, a worse drop than the 4.5% the bank predicted in May.

The pandemic is effecting city finances in Ukraine, warns Fitch Ratings, which rates the bonds of eight Ukrainian cities. “Fitch estimates that the operating revenue of rated Ukrainian cities will be impacted by lower collection of personal income tax – their major revenue source,” the agency wrote. “We believe the pandemic will cause capital market conditions to tighten; this includes impaired access to financing amid undermined growth prospects and high refinancing pressure on the sovereign.”

At the day the Nobel Committee gave the Peace Price to the United Nations World Food Program, the Wall Street Journal reported: Wheat Prices Skyrocket After Dry Weather, Coronavirus Lockdowns.” Chicago wheat futures have risen 15% since Aug.1, to their highest level in 15 years. Tightening world wheat supplies, harvests are down in Argentina, Canada, Ukraine and the U.S, Russia plans to announce an export quota starting January, and China is raising its imports by 7% this marketing year. With prices of corn, Ukraine’s largest export, also ticking up, the United Nations’ gauge of global food prices rose 2.1% in September.

Rising world grain prices are partially fueled by disappointing harvests in Ukraine, one of the world’s top five grain producers. As of 9th of October, Ukraine’s grain exports were 13 million tons, down 12% yoy for the period since the July 1 start of the marketing year. Accounting for 16% of global grain exports, Ukraine exported 57.2 million tons during the last marketing year. With drought cutting this year’s overall grain harvest by 9%, to 68 million tons, the government predicts that exports could decline this marketing year by 17%, to 47.4 million tons.

Thanks to recent rains, autumn sowing has picked up, easing worries about a poor harvest next summer, reports APK-Inform consultancy. “Sufficiently heavy rains in the last days of September and early October ended the long-term air-soil drought in most regions of Ukraine and improved conditions for sowing and the development of winter crops,” APK says. After the slowest start in a decade, farmers have sowed 3.86 million hectares with winter crops, 47% of the planned area, reports the Economic Development, Trade and Agriculture Ministry.

Capping a decade of lobbying by the Ukrainian Seed Association, the European Parliament voted last week to import Ukrainian seeds, agreeing that their quality meets EU standards. Romain Desthieux, chairman of the Seed Association, predicts that exporting seeds to the EU could become a $100 million a year business.

The EBRD is preparing a soft loan of €450 million to Ukravtodor to build a northern bypass highway around Lviv and to help fund the rebuilding the southern two thirds of the 475 km Kyiv-Odesa highway. Ukraine’s highway agency is to contribute €247 million to the two projects, which have a total cost of €1.1 billion. In December, the EBRD Board is to vote on the loan, which is packaged as upgrading two key trade corridors in the Trans-European Transport Network.

The World Bank will loan $65 million to rebuild 183 km of roads in the government-controlled portion of LuhanskUkravtodor reports on Facebook. Three road sections have be chosen to have the maximum impact on the reviving the region’s economy by easing the export of local crops. At the same time, the World Bank will loan $35 million for farming promotion projects – a food safety laboratory and a logistics hub – undertaken by the Ministry of Reintegration of the Temporarily Occupied Territories. Separately, Ukravtodor is negotiating with the European Investment Bank a $100 million loan for additional road projects in Luhansk and Donetsk.

Ukraine’s $300 million, largely US-financed storage facility for spent nuclear fuel will be completed by the end of this year, Petr Kotin, acting head of Energoatom, assured reporters. Scheduled to open next spring, the storage facility is to save Ukraine $150-200 million a year in payments to Russia, the current destination for Ukraine’s spent fuel. Of the total cost, $250 million is financed by a loan from the United States International Development Finance Corporation, formerly known as the Overseas Private Investment Corp.

Using the dry storage technology of Holtec International, a Florida-based firm, the facility near Chornobyl, in northern Kyiv region, to take the fuel by rail from nine commercial reactors in three power plants – Rivne, Khmelnytskyi, and Yuzhnukrainska in Mykolaiv. Zaporizhzhia nuclear power plant, the largest in Europe with six reactors at 5,700 mw capacity, has stored its spent fuel on site with dry storage since 2001.

The one hitch is that 40 km of access railroad track have not been cleared of trees by Severnaya Pushcha (Northern Forest) State Enterprise, a unit of the Chornobyl Exclusion Zone Management Agency. This east-west section runs from Vilcha, Zhytomyr region, to Yaniv, the storage site. The track was abandoned after the 1986 nuclear disaster. Once railbed is cleared, Ukrzaliznytsia will have to lay new rails. Conditions of the abandoned line and its 11 shuttered stations are detailed on this website: Radioactive Railroad.

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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