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  • Roaming Shows Where Ukrainians Travel
  • Airport Hotel Approved for Lviv
  • Starting Monday, Ukraine Bans Imports of Russian Cars, Fertilizers
  • Naftogaz to Tap Eurobond Market in July
  • Poland Wants to Build Gas Connector to Ukraine
  • Donetsksteel Invests $100 million in 2019
  • Lviv To Launch IT Fund
  • 2020 Census in a Smartphone?
  • France and Germany to Duel over Ukraine’s Bus Business
  • UZ Goes for a Eurobond
  • Russia to Allow Ukrainian Cargo Transit by Truck and Train
  • Kyiv Moves To Recycling
  • Kyiv Sikorsky Airport to Close Sept. 2-12
  • Foreign Cos. to Goose Gas from Old Wells

Kyivstar, Ukraine’s largest cellphone company, reports that the number of its subscribers using international roaming in May and June is up 25% over the same period last year. Poland was the most popular country, accounting for 18% of all Kyivstar subscribers outside the country. Tied for second place – with 8% each – were: Germany, Russia, and Turkey. The next group of countries – visited by 5% of Kyivstar subscribers overseas – were: Egypt, Italy, Hungary, and the Czech Republic. The next countries were Romania and Belarus, with 3% each. Kyivstar has 26.4 million subscribers in Ukraine.

Monday’s ban on imports of potash and phosphate fertilizers from Russia will lead to shortages and could affect next year’s crop, Dmitriy Kokhan, advisor to the Ukraine Agrarian Council, tells Interfax-Ukraine. “The government condemns domestic agriculture to a deficit with such a step,” Kokhan said of the ban, part of a wider package announced Wednesday by the Cabinet of Ministers.

Ukraine’s new customs warehouse regime for storing EU gas in western Ukraine has drawn 30 companies, pushing gas injection rate up to 60% above one year ago, Ukrtransgaz tells Bloomberg. Pushing this growth in gas storage is fear that Russia could off gas shipments across Ukraine next winter and ‘amazing’ seasonal price spreads, says Klaus Reinisch, sales director at DTEK’s D.Trading. In the widest spread in five years, traders can buy gas in Germany for €10.50 per megawatt-hour and arrange to sell it this winter at about €19. Ukrtransgaz invites EU companies to store up 4 billion cubic meters in Ukraine’s underground reservoirs, paying only rent, and no duties.

The Cabinet of Ministers has authorized Ukrenergo to receive a €149 million loan from the EBRD to rebuild 12 electricity substations with new transformers and automatic control systems. The work is seen as a key step toward synchronizing Ukraine’s power system with the EU power network, or ENTSO-E.

The central bank has simplified the procedure for a business to open a bank account by abolishing the requirement to issue a sample signature card. The bank says this abolition will save businesses time and money.

With air traffic growing at Lviv airport by 50% this year, a local developer, Galmodern, is negotiating with Hilton Hotels & Resorts to build a Hilton standard hotel near the airport, reports the Lviv City Council. The hotel and office center, with underground parking, would be built at 191 Liublinska St., on a lot facing the airport, adjacent to Sknylivskiy Park.

Hiroshi Mikitani, founder and CEO of Japan’s Rakuten e-commerce company, met with President Zelenskiy on Tuesday in Kyiv. Mikitani, the owner of the Viber messaging service, discussed his plans to expand Rakuten’s office in Odesa and to open an office in Kyiv. Often referred to as ‘the Amazon of Japan,’ Rakuten owns Japan’s largest e-commerce site, largest Internet bank and largest credit card company. After the meeting in Kyiv, Mikitani said of Zelenskiy’s IT plan: “All government services in the smartphone are a very real prospect for Ukraine.” Zelenskiy invited Mikitani, to join the National Investment Council, a group of 16 major multinational companies with investments in Ukraine.

As of Monday, Ukraine’s bans imports from Russia of cars, fertilizer, cement and metal pipes. Covering $510 million worth of 2018 imports, the list constitutes the biggest expansion in three years of Ukraine’s bans on imports from Russia. Ukraine drew up the new list of banned products on May 15 in response to trade bans announced in Russia in April. As of March 1, Ukraine will ban the import of used rail freight cars. With record grain harvests, Ukraine has a shortage of Soviet gauge rail cars.

Commodity trader ED&F Man Holdings Ltd. plans to sell underperforming sugar assets, a list expected to include a sugar beet-processing plant in Ukraine, reports Bloomberg. Sugar traders have struggled to make money after bumper crops in India and Thailand depressed prices and curbed volatility. After world sugar prices hit a 10-year low last August, many Ukrainian farmers cut their sugar beet plantings this spring. Ukraine is the world’s 10th largest sugar producer.

Naftogaz will hold an investor roadshow in July to market a EUR-denominated bond of at least €500 million, Bloomberg reports. Dragon Capital calculates the potential yield of the bond at 8%, far better than the expected 11% yield of an aborted Eurobond launch last November. “Naftogaz needs to increase stocks in its underground reservoirs to at least 20 bcm from current 13 bcm to maintain sufficient pressure in the gas transit system if Russian flows are halted,” Dragon writes. “Given the recent drop in gas prices in Europe, raising $1 billion would sufficiently cover Naftogaz’s import needs.”

With Ukraine’s new Road Fund filling up at the rate of $2 billion a year, managers of waterways and railways want a liberal interpretation of its mandate. In addition to building roads, the Road Fund could help repair shipping locks on the dams of the Dnipro cascade, argues the State Enterprise of Waterways. Similarly, Andriy Ryazantsev, Ukrzaliznytsia’s business development director, says the Road Fund could pay for 15 new 10-car trains for the state railroad. In response, Ukravtodor, the state highway agency, says the purpose of the Road Fund is to build roads.

Poland is ready to build a 2 billion cubic meter pipeline to link the Polish gas transportation system with Ukraine’s network at Hermanowice, a Polish town bordering southern Lviv region. “This is not much, but when Ukrainians need urgent assistance, we are ready to provide it,” Piotr Naimski, Poland’s minister for strategic energy infrastructure, tells Ukraine’s ZN.UA website.

The EBRD may loan €60 million to Naftogaz to increase gas stocks for the next heating season, the development bank reports on its website. In addition, the gas company is expected to launch a Eurobond this summer to raise as much as $1 billion to fill gas reservoirs. As of Sunday, the reservoirs hold 13 billion cubic meters, 65% of the 20 bcm goal.

Donetsksteel is investing $100 million this year to develop its coal mines and coking coal production plant in Pokrovka, government-controlled Donetsk. By 2024, the company plans to increase production by 50%, Ildar Saleyev, the company’s general director, writes on Facebook. The company, 25% owned by Metinvest, is joining the European Association for Coal and Lignite, or EURACOAL.

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Ukraine’s central bank may ease restrictions on how much money in dividends foreign investors can take out of the country, Governor Yakiv Smoliy told reporters on Tuesday. Smoliy did not say whether the central bank would raise or end the limit, which is now €12 million a month.

Ukrainian corporate and municipal bonds should be made available through Clearstream, the international depository, recommends André Küüsvek, director of the EBRD’s local currency and capital markets development initiative. He spoke Monday at ‘Connect Ukraine to Clearstream,’ an ICU-EBRD conference in London. Investments in hryvnia government bonds have increased 8-fold since the start of the year, to the equivalent of $2 billion, Finance Minister Oksana Markarova said at the conference.

ICU managing partner Konstantin Stetsenko predicts Ukraine’s new currency liberalization and cooperation with Clearstream will further boost investments in hryvnia bonds. He said: “Infrastructure changes, along with the favorable situation in global markets, allow us to look at the government bonds with optimism and expect an influx of new investors.”

Ukraine’s first electricity auctions are to took place last week through the website of the Ukrainian Energy Exchange — www.ueex.com.ua/eng/ueex/. “About 200 bidders were trained, including representatives of state-owned manufacturers: Energoatom, Ukrhydroenergo, Centrenergo,” Alexander Kovalenko, director general of the commodity exchange, or UEEX, tells Ukrinform. Auctions are a prerequisite for the new electricity market that is to start Monday.

No longer the preserve of big cities, the ProZorro electronic tender and auction system now operates in all 24 regions and in 238 cities and towns, reports Stepan Kubiv, Economic Development and Trade Minister. Referring to 3,500 auctions in the last 18 months, he says: “At these auctions, local governments sell and lease communal property, conduct small privatizations, provide the right to advertise, hold fairs, provide parking and entertainment services. The vast majority are small privatization auctions.”

Lviv IT Cluster presented a regional investment fund, Lviv Tech Angels on last Friday, the first day of the Leopolis Jazz Fest, an event that draws business leaders from across Ukraine and Central Europe. “Top managers of Lviv IT companies will select the best Ukrainian start-ups for investment, mentoring, and consulting,” reads the launch release. Initiators of the fund are: Mykhailo Puzrakov, co-founder and COO of Intellias; Volodymyr Chyrva, co-founder of Sigma Software; and Andriy Pavlov, CEO of N-iX.

The government is preparing to test technology for conducting the 2020 national census by smartphone, Kubiv, the economic development minister, writes in his column on LIGA.net. Although Kubiv is not expected to be in his post at the time of next year’s census, President Zelenskiy advocates the goal of ‘a state in a smartphone.’ The last census, conducted on Dec. 5, 2001, counted 48,457,100 people living in Ukraine. In the intervening two decades, the population is believed to have fallen to 40 million due to: emigration; the birth rate lower than the death rate; and the loss of Crimea and the most heavily portions of Donetsk and Luhansk regions.

President Zelenskiy wants Ukraine to join the EU’s Digital Single Market during his five-year term in office. Instituted in 2015, this EU policy is credited with freeing EU residents of cellphone roaming charges two years ago. The EU policy seeks to promote e-commerce, to protect personal data, and to build a ‘data-driven economy.’ After calling for “the state in a smartphone,” Zelenskiy told business leaders in Kyiv last week: “Joining the European Digital Single Market is another task of ours over five years.”

This fall, Ukraine will come out with a 1,000 hryvnia banknote, worth $38 at current rates. The bill will end the 500 hryvnia bill’s 13-year run as the highest denomination in the land. Designed for convenience, the new big bill could trigger inflation, some economists tell UNIAN. Price rises are trending downward, expected to reach 6% y-o-y in December.

BlaBlaBus, France’s low cost bus line, plans to expand from Germany to Ukraine, Nicolas Brusson, BlaBlaCar co-founder and CEO, tells Oktobus.Zhurnal website. The announcement comes two weeks after Flixbus, Germany’s largest intercity bus company, unveiled a major Ukraine network expansion, starting bus routes from nine Ukrainian cities to EU destinations.

Ukrzaliznytsia starts an investor roadshow in London and Europe to place dollar-denominated, three to five year Eurobonds, reports Interfax-Ukraine. JP Morgan and Dragon Capital have the mandates for the bond issuances. The international rating agency Fitch is assigning the bonds a “B-” rating, the same as the sovereign. Two weeks ago, investors made €6 billion in bids for Ukraine’s first new Eurobond since October. The Finance Ministry placed the 7-year €1 billion bond at 6.75%.

Due to an unprecedented foreign investor in Ukraine’s hryvnia bonds, the government does not plan to return this year to the Eurobond market, Finance Minister Oksana Markarova tells Bloomberg in Skopje, North Macedonia. “We already see that we are exceeding the budget forecasts in attracting financing from local loans,” said Markarova, who was attending last weekend’s Constituency Meeting of the International Monetary Fund and the World Bank. Since the start of this year, foreign investment in Ukraine government hryvnia bonds has increased 8-fold, hitting the equivalent of $2 billion.

DTEK RES has raised €90 million of foreign funding to build the second stage of the Primorsk Wind Power Plant, in Zaporizhia region. The loans goes for a €150 million, 100 MW project that is be commissioned in September. The money comes from a consortium of three German banks – Bayerische Landesbank, KFW IPEX-Bank, and ODDO BHF Aktiengesellschaft. Guarantees are given by two export credit agencies: Euler Hermes, of Germany; and CESCE, of Spain.

Over the next decade, Ukrzaliznytsia plans to acquire 495 locomotives, renewing about one third of its freight locomotives, Yuriy Lavrenyuk, deputy infrastructure minister wrote on Facebook after meeting Monday in Kyiv with Philippe Delleur, a senior vice president for Alstom, the French rail transport company. Pending finalization of a contract with Alstom, he wrote: “The first 110 Ukrainian-French locomotives with a traction [electric] motor should be on the rails of Ukrainian Railways by 2025.” While Ukraine and France negotiate financing, leading sites for joint production are Zaporizhia Electric Locomotive Repair Plant and Lviv Locomotive Repair Plant.

Ukrzaliznytsia, possibly the nation’s largest real estate owner, has started placing properties up for lease on the ProZorro.Sale electronic platform. Cafes, warehouses, empty station rooms, spaces for ATM machines and rooftop antennas – will all go through “civilized and transparent leases,” Evhen Kravtsov, the railroad’s CEO, writes on Facebook. In a second bid to inject private capital into the state monopoly, two rail stations – Mykolaiv and Zhmerynka, in Vinnytsia region, are being prepared for lease as concessions.

In an olive branch to President Zelenskiy, President Putin decreed Monday that trucks and trains carrying goods to and from Ukraine may cross Russia as long as they carry seals allowing tracking by Russia’s GLONASS satellite navigational system. Effective July 1, the liberalization is billed by Russia as a concession to Kazakhstan and other Central Asia countries. But it may be in response to pressure from China. With China-EU freight trains backing up at the rail gauge break on the Belarus-Poland border, Chinese shippers want to use an alternative rail route – through Ukraine.

The fourth oil and gas block auction in six months will take place on Sept. 16, reports Gosgeonadr, the State Geological and Subsoil Service. Through Prozorro, three lots will be auctioned – in Chernivtsi, Lviv, and Zaporizhia. Foreign drillers largely have stayed away from the auctions this year, saying the lots are too small or too poorly documented. Last week, at the most recent auction, UkrGazVydobuvannya, the Naftogaz unit, won seven of the nine lots, committing to paying $90 million. Sales of the other two lots were canceled for lack of bidders.

Tripling foreign investment into Ukraine is the mission of David Arakhamiya, the new secretary of the National Investment Council. “All preliminary consultations with large investors show that Ukraine can increase the current volume of investments into the country by at least three times — I was charged by the President to make this process as quick as possible,” says Arakhamiya, who co-founded Template Monster, an IT company. With the new president starting a 5-year term, a new cycle of foreign investment is increasingly expected in Ukraine. At the core of the Investment Council is 16 multinational corporations who have major investments in Ukraine.

Starting next month, Kyiv plans to install up to 3,000 containers for collecting plastic and glass, a first step toward building a plant capable of recycling 700,000 tons of garbage a year, Vitali Klitchko said Monday. Kyiv’s Mayor spoke at a signing ceremony with France’s Veolia Group, one of several European companies interested in building a waste management system for Kyiv. Founded as Compagnie Générale des Eaux, Veolia is a multinational specializing in water and waste management.

Kyiv Sikorsky International Airport will close for runway repairs from Monday, Sept. 2 to Thursday, Sept. 12. Kyiv Boryspil, which already handles one million passengers a month, is preparing to cope with an additional 150,000 passengers during the 10-day closure of Sikorsky. Passengers probably will go to Terminal F, which reopened in April to handle Ryanair and other discount air lines. At Sikorsky, a hub for Wizz Air, traffic during the first five months of this year increased by 26.5% y-o-y, to 1.8 million passengers.

Restoration of rail traffic with the Russia-controlled parts of Donetsk and Luhansk would result in big cargo increases for Ukrzaliznytsia — 40% for coal; 30% for iron ore; and 15% for ferrous metals. The estimates are published in the state railroad’s strategy for 2019-2030. Although no concrete moves have been taken, Zelenskiy has said normalized economic relations with the occupied would be a step toward peace and reconciliation.

Ten days before the grain marketing year ends on June 30, Ukraine has exported 48.9 million tons of grain – 22.5% more than during the entire 2017-2018 marketing year. Yevhen Kravtsov, CEO of Ukrzaliznytsia, tells the UBN that the railroad is ready for a repeat of last year’s bumper harvest with 1,750 operational freight locomotives, including 100 standing by in reserve.

After Zelenskiy promised business leaders on Thursday to carry through ‘big privatizations,’ the head of the State Property Fund immediately appealed to the new president to unblock privatizations, saying they have been frozen by “dubious lawsuits” since last December. “Otherwise, it will be too difficult to break the oligarchic system of ‘freezing’ state companies,” Vitaliy Trubarov, head of the Fund, writes on Facebook.

In South Korea’s first solar project in Ukraine, GS Engineering & Construction signed a $24 million deal last week to build two solar plants in Zakarpattia. In the deal with Kyiv’s Helios Strategia, two solar plants – with a combined 24MW capacity — are to be built by April near Mukachevo.

Companies from the US, China, Romania, and Ukraine are finalists for a Naftogaz project to increase gas production from depleted deposits in western Ukraine, Naftogaz CEO Andriy Kobolyev writes on Facebook. The four qualifying companies are Baker Hughes, from the US; a consortium of Xinjiang Bucking Energy Engineering and Zhongshi Shenli Petroleum Engineering, from China; Expert Petroleum Solutions SRL, from Romania; and Poltava Petroleum Company, from Ukraine. Kobolyev said he was happy to see the tender drew “powerful international players.” Under production sharing agreements, winning companies would provide the money and technology and would share gas production with Naftogaz, the owner of the fields.

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