estimated the Ministry of Economic Development and Trade. Except for retail trade, all sectors were down. Consensus forecasts put Ukraine’s 2021 GDP growth at 4%. These forecasts were made before the April coronavirus lockdown in Kyiv and half of the regions. War jitters about Russia’s military threats also may dampen investment.
the Presidential press office has reported. “The main function of the Bureau of Economic Security will be analytical work, not law enforcement. The Bureau will analyze the beneficiaries of financial transactions and determine if there is a violation of the law in the circulation of funds of certain business or government structures,” a government spokesperson said.
Kyiv’s Sikorsky Airport is to add 500 meters to its runway, allowing Wizz Air, its primary user, to use larger jets. By moving to Airbus 321 jets, Wizz Air says it can reduce frequencies and noise in the capital’s Zhuliany neighborhood. Wizz Air has ordered 190 Airbus 321s, which carry 30% more passengers than the Airbus 320s, currently the workhorse of Wizz Air.
Mayor Klitschko signed an order last week for design work to start on a 5-year upgrade of the airport. By expanding the runway to 2,810 meters, upgrading lights and adding an instrument landing system, the airport is to be certified to land jets in bad weather, avoiding diversions to Boryspil. Ukraine’s second busiest airport, after Boryspil, Sikorsky handled 2.6 million passengers in 2019. The City Council is mulling a second expansion: increasing the airport’s territory by 5%, to 278 hectares.
German and Biden Administration officials are discussing a package of measures that would allow the Russia-German gas line to open, but protect Ukraine’s security concerns, according to a Financial Times story headlined: “Germany aims for new deal with Washington on Nord Stream 2.” One proposal would empower Germany – or a German-American commission — to shut down the Nord Stream 2 pipeline if Russia stopped sending minimum gas flows across Ukraine, increasing risk of an all-out Russian military attack.
“As Berlin seeks solutions, early signs from Washington indicate that the Biden administration is seeking to defuse the Nord Stream 2 debate,” the FT writes. “Two knowledgeable sources said [US Secretary of State Antony] Blinken has demonstrated a willingness to minimize sanctions.” Bloomberg later posted a matching story yesterday, headlined: “Germany Seeks Deal With Biden on Controversial Pipeline.” Bloomberg quotes Mark Helfrich, a Bundestag member from the ruling Christian Democratic Union, saying: “German, EU and U.S. officials are in talks about a package of measures which seeks to enhance Ukrainian stability and European energy sovereignty.”
A cold weather spike in electricity consumption, a lack of coal, and power plant breakdowns are forcing Eastern Ukraine to import electricity from Belarus and Russia and Western Ukraine to import electricity from Slovakia, Romania and Hungary, reports Ukrenergo, the national power distribution company. As of Monday, 19 thermal power plants were offline, pulling 6,270 MW out of the system, Volodymyr Kudrytskyi, Ukrenergo’s chairman told a forum in Kyiv yesterday.
Electricity consumption last week was 6.5% more than forecast. But coal reserves fell to one third of required minimums. Thanks to imports, Kudrytskyi does not predict immediate power shortages.
DTEK Group, Ukraine’s largest private power producer, called on the government yesterday “to abolish price caps, which are an obstacle to the liberalization of the electricity market.” The company cited the example of the EU, where the cost of electricity production during peak loads can increase significantly. DTEK said: “We call on the government to intervene in the situation and immediately hold an anti-crisis headquarters with the participation of the Prime Minister.”
Ukraine’s Energoatom will soon stop sending spent nuclear fuel to Russia for processing and storage, Petro Kotin, the company head, said yesterday. In July, the Centralized Spent Fuel Storage Facility will open, he said. At the same, time, Energoatom is completing a 43 km rail connector to the facility, built by Holtec, a US company, near Chornobyl. Nuclear supplies about half of Ukraine’s electricity.
With demand strong for Ukrainian government bonds, the Finance Ministry depressed yields on all five hryvnia bonds sold at yesterday’s auction, the Ministry reported. With yields dropping from six to 44 basis points, the final range was 9.15% for 3-month bonds to 12.05% for 3-year bonds. The government sold hryvnia bonds for the equivalent of $213 million. Also posting results on Facebook, the Ministry says it sold $42 million worth of 2-year dollar bonds at 3.9% and €70.5 million worth of 1-year euro bonds at 2.5%.
Looking beyond the bland public statements surrounding Ukraine’s recent suspension of talks with the IMF, Anders Aslund, a veteran IMF observer, writes in an Atlantic Council blog: “No agreement was concluded between the IMF and the Ukrainian government recently because they fundamentally disagree about pretty much everything.” Offering the only way forward, Aslund writes that President Zelenskiy “urgently needs to refocus on the anti-corruption messages that enabled him to win landslide election victories in the presidential and parliamentary votes of 2019.” Without real actions, he writes, the IMF “has no compulsion to offer credits to the dishonest.”
DiDi, China’s giant online taxi service, plans to launch this year in Ukraine, reports AIN.ua news site. With 550 million users, tens of millions of users and billions of dollars in revenues, DiDi entered Russia last year, a first step in a plan to expand across Eastern Europe. Last week, DiDi posted on the GRC job search website that is looking for a manager to launch in Ukraine.
DiDi will compete with Bolt, Uber and Uklon for Ukraine’s taxi market, estimated by Uklon at $800 million a year. Uber, the first mover in Ukraine, now operates in seven Ukrainian cities and claims that 4.3 million Ukrainians have downloaded its mobile app. Uklon operates in 19 cities and claims nearly 3 million users. Bolt operates in 10 cities and claims 3 million users.
Taxi services got a boost yesterday when the Rada overwhelmingly approved a bill raising the penalty for drunk driving to $608. For repeat offenders, the fine is doubled to $1,216, licenses are suspended for three years and vehicles can be seized. The Rada also tripled the fine – to $60 – for drivers caught breaking the national speed limit of 50km per hour in populated areas.
McDonald’s Ukraine plans to expand a pilot program of restaurant waste recycling to all 96 restaurants in the country by the end of this year, the company announced yesterday. As part of a worldwide McDonald’s drive to switch from plastics to paper by 2025, the restaurants in Ukraine switched last year to paper cups for drinks and paper boxes for salads.
Kyiv’s 11th Regus office work space opens in Podil next month, reports the parent company, Luxembourg-based IWG Plc. Despite last year’s economic recession, total occupancy of the 10 existing Regus work spaces in Kyiv is 78%, Yulia Lytvynenko, Ukraine director of IWG, tells Interfax-Ukraine. Predicting that several large leases will be signed in coming weeks, she predicts that the overall occupancy will rise “to 83% by March.” The new Regus will occupy three floors of the new Volodymyrsky business center on Poshtova Square, near Poshtova Metro station and the Kyiv Funicular. Lytvynenko says: “The highlight, surely, will be beautiful views of the Dnipro River on the one hand and the [Volodymyrska Hill] park on the other.”
Ukraine’s economic activity in the fourth quarter of last year was only down 1% yoy, far better than the forecast drop of 3%, Economy Minister Ihor Petrashko told reporters Tuesday at the Ukraine 30 Coronavirus: Challenges and Responses Forum in Kyiv. “Currently, the conditions for economic recovery, in principle, are quite favorable,” he said. “Our forecast for 2021 – an increase of 4.6% – we retain unchanged and [see as] quite likely.”
Adamant Capital wrote: “The updated terms look significantly better than those disclosed at the end of November…We confirm our ‘Buy’ recommendation.”
Ukraine’s steel production could increase by as much as 6% this year, to 21.8 million tons, according to a study prepared by the GMK Center, a metals industry analytical and consulting group: “Forecast of Steel Production in Ukraine in 2021.” By reorienting exports to China, Turkey and Southeast Asia, Ukraine’s steel sector ended 2020 recording a 1% drop in production, but rising from 13th to 11th place in the ranks of world steel producers. “Ukrainian steelmakers begin 2021 with the best conditions in the markets over the past 12 years,” the report says. “Demand for steel in the EU and MENA region has already fully recovered, while China will maintain low export volumes.”
Concorde Capital wrote: “The updated DTEK’s offer provides more clarity about minimum payments to bondholders…the updated restructuring terms look balanced.”
Ukraine’s full bore coronavirus vaccination campaign may be delayed from March to April because of government paper work delays in China and Ukraine, reports Reuters. Last week, Ukraine’s Lekhim asked Ukrainian authorities’ permission to delay to April imports from China of the first shipments of 1.9 million Sinovac vaccines, according to a letter seen by a Reuters reporter in Kyiv.
Dragon Capital wrote: “The updated restructuring terms mark a significant improvement over the previous version…The new proposed DTEK Energy bond structure is also simpler than the previous variant and likely to have its own dedicated Bloomberg calculator, facilitating bond trading and improving its overall liquidity.”
Vaccinations are scheduled to start Monday, drawing on an expected shipment of 117,000 Pfizer vaccines. President Zelenskiy talked on the phone Monday afternoon with Albert Bourla, CEO of Pfizer Pharmaceutical Corporation, based in New York. “Ensuring vaccination of the population of Ukraine with a safe certified vaccine is one of our priorities,” Zelensky said. The President’s website reported: “The Board Chairman of Pfizer promised to do everything possible to ensure that Ukraine receives the first batches of vaccine under contract as soon as possible.”
All Ukrainians should have access to vaccines by the end of this year, Health Minister Maksym Stepanov told ICTV’s Freedom of Speech program. He vowed: “We want to ensure that 100% of the population have access to a COVID-19 vaccine by the end of 2021.” Separately, President Zelenskiy addressed popular skepticism of the vaccines, saying Monday: “We all need to show vaccination live on TV. There’s no other choice than to lead by example.”
Ukraine’s turn last month to Britain’s Crown Agents to buy coronavirus vaccines illustrates the difficulty in breaking ingrained traditions of drug profiteering at the Health Ministry, Pavlo Kovtoniuk, Head of the Health Economics Center at the Kyiv School of Economics, writes in an Atlantic Council piece: “Ukraine signs vaccine deal, but delays highlight urgent need for healthcare reform.” Noting that Crown Agents temporarily procured drugs for Ukraine 2016-2018, Kovtoniuk, who was Deputy Health Minister at the time, wrote “For the second time in just over five years, the involvement of international partners was necessary to rescue Ukraine’s medical procurement processes from corruption.”
The vaccination of 10 million Ukrainians at risk – about one third of all adults – is a condition for Ukraine receiving a $30 million World Bank loan this spring under its Covid-19 Emergency Response and Vaccination in Ukraine project, the Finance Ministry reported Tuesday. The money is to be part of a $90 million World Bank loan for Covid testing and vaccinations. Deputy Finance Minister Roman Yermolychev said: “We must understand that these are loans, and therefore their disposal must be reasonable and rational. to fulfill all obligations as much as possible in order to improve the investment microclimate in Ukraine.”
US support to Ukraine for combatting the pandemic totals $48 million over the last year, Kristina A. Kvien, US Chargé d’Affaires, told the Coronavirus Forum on Monday. She said the money has gone to bolstering Ukraine’s health system, supporting small businesses, and countering “COVID-related disinformation that threatens our collective ability to get this pandemic under control.”
Germany is proving Ukraine with a €13.1 million medical care grant that includes supplying equipment for outpatient diagnosis and treatment of coronavirus. This grant, and a second one for €23.5 million are largely focused on Ukraine’s war affected southeast where the money is to go for upgrading hospitals and building housing for internal refugees.
Talks with IMF will be delayed to the spring, making a staff level agreement in May the optimistic scenario, Liga.net reported in a lengthy story, citing unnamed Rada members and Central Bank officials.
Dragon writes: “The government has sufficient liquidity buffers to proceed without IMF financing until end-May (assuming full rollover of domestic debt), but faces an increase in fiscal funding needs in 2H21, especially in September, the peak of external debt redemptions ($2.2bn), and December, due to seasonal expansion of the budget deficit (at least half of $8.4bn full-year gap). Thus, authorities would need to secure IMF financing by August at the latest in order to facilitate funding from other sources (IFIs, Eurobond market, foreign inflows into UAH bonds).”
The Finance Ministry increased 2.5-fold its sale of bonds yesterday, but kept yields largely unchanged at the weekly auction, according to results posted on Facebook. Of the total $467 million in dollars and hryvnia equivalent sold, the 16-month hryvnia bond was the big seller, accounting for 31% of all sales and going for a weighted average of 11.15%. Of the six bonds sold, interest rates ranged from 9.89% for 6-month bonds to 12.5% for 6-year bonds. In addition, the Ministry raised $207 million through the sale of 14-month dollar bonds for 3.9%.
With snow and sub-freezing temperatures forecast through Friday, restrictions on trucks entering Kyiv are expected to continue off and on. At a peak, 3,000 trucks were stopped outside the capital, with their drivers waiting for roads to clear. At eight entry points to the city, the State Emergency Service pitched warming tents, offering hot tea and biscuits. Last night, after rush hour traffic jams subsided, trucks were allowed into the city, alleviating fears of shortages in supermarkets.
Due to the cold temperatures, coal reserves at thermal power plants fell sharply during the first week in February, hitting 57% of minimum, required volumes, Ukrenergo reported yesterday. To fill the gap, hydro plants on the Dnipro cascade increased output by 27% during the first week. Energoatom is advancing by several days the scheduled relaunching of reactor No. 2 at Khmelnitskiy Nuclear Power Plant.
DTEK Energy has announced a tentative agreement with bond and bank debt holders to restructure much of its $2 billion bond and bank debt. After 10 months of negotiations, the deal’s center piece is exchanging guarantees from DTEK Oil & Gas Receivables for $425 million of new DTEK Oil & Gas notes. Listed on the Irish Stock Exchange, these bonds would pay 6.75% cash interest semiannually and mature Dec. 31, 2026. As part of the deal, DTEK Energy will appoint an independent supervisory board member, from a list of three candidates offered by creditors, who will have a veto right on M&A and excess capital expenditures.
Analysts generally welcomed the proposed exit from a default that rattled investors last March:
Despite the coronavirus lockdowns, retail trade increased last year by 8.4% yoy in real terms, rep orts the State Statistics Service. Fastest growth regions were: Kyiv – 19%; Zaporizhia – 16%; and Chernihiv -14%.
Ukraine’s economy contracted by 4.4% in 2020 — far less than the estimates of 6-7% made last May, when the country was still in a severe lockdown, reported the National Bank of Ukraine. Despite a slow start to 2021, the Central Bank forecasts 4.2% growth this year. The current 2.5-week lockdown, which ends Monday morning, is having only a ‘restrained’ impact on the economy, Dmytro Sologub, Deputy Governor of the bank, told reporters yesterday.
The Central Bank board decided yesterday to key Ukraine’s prime interest rate at 6%, the level it reached last June. In the 15 months prior to June 2020, the National Bank of Ukraine cut prime by two thirds, from a recent high of 18%.
Eying inflation, the Central Bank warned that if inflation increases, “the National Bank will raise the discount rate. This will curb the acceleration of inflation in 2021 and return it to 5% in 2022.” The Central Bank forecasts that inflation will rise from last year’s 5% to 7% in 2021. Pushing inflation up during the first half of this year will be: strong consumer demand, higher energy prices, higher wages and carryover food inflation from last year’s worse crop yields.
Average borrowing costs for businesses dropped by 45% over the last year, Kyrylo Shevchenko, Governor of the Central Bank, told reporters yesterday. “As for the cost of loans for businesses in the national currency, the rates decreased from 14.8% in December 2019 to 8.2% in December 2020,” he said. “For example, the cost of mortgage loans decreased from 19.6% in December 2019 to 12.1% in December 2020.”
The contract of Petr Krumphanzl, Chairman and CEO of PrivatBank, expires tomorrow. While the Board looks for a successor, leadership of Ukraine’s largest and most profitable bank will go to Anna Samarina, Deputy Board Chair for Finance. During his three years at the helm of PrivatBank, Krumphanzl, a Czech, increased the bank’s profitability and moved strongly into online banking. He also was the target of harassment – legal and physical – by employees of Ihor Kolomoiskyi, who owned the bank until it was nationalized in Dec. 2016.
President Biden should bolster “US support for Ukraine in order to get the country back on the reform track,” Andy Hunder, president of the American Chamber of Commerce in Ukraine, urges in a new essay for the Washington-based Atlantic Council. “Over the next four years, Biden can play an historic role in helping Ukraine eliminate corruption and free itself once and for all from oligarch control,” Hunder writes. Noting that Biden visited Ukraine six times when he was Vice President, Hunder writes: “Throughout this period, he consistently and outspokenly championed the East European nation’s efforts to reform and eradicate corruption.”
“The top priorities of the Biden administration’s Ukraine policy must be to curtail Russian aggression, reduce corruption, and contain the oligarchs…What Ukraine’s shady oligarchs fear most of all is US Justice,” Hunder writes in the piece headlined: “Why Ukraine’s business community has high hopes for the Biden presidency.” He concludes: “The business community is now pinning its hopes on President Biden to back Ukraine during what promises to be a decisive period in the country’s independent history.”
Turkey’s Doğuş İnşaat ve Ticaret A.Ş submitted a winning $402 million bid to win Ukravtodor’s tender build a 1.7 km cable suspension bridge across the Dnipro at Kremenchuk, Poltava oblast, the state highway agency reports. Designed to be the most modern Dnipro bridge within a 500 km radius, the Kremenchuk bridge will have four lanes and approaches suitable for heavy truck traffic moving from cargo the Left Bank to the Black Sea ports. Construction is to start this year and finish in 2024. The city’s current bridge dates back to the Czarist era and was most recently upgraded in 1949. In the 2000s, Doğuş İnşaat took part in the construction of Kyiv’s New Darnytskyi Bridge and Terminal D at Boryspil Airport.
Qatar’s state-owned power development company, Nebras, is buying control of 214 MW of Ukraine solar and wind plants from Vasyl Khmelnytsky and his partners, according to a filing with Ukraine’s Antimonopoly Committee. The sale of these eight operating plants follows the 2019 sale by Khmelnytsky’s UDP Renewables of three solar plants to a Polish unit of Spain’s Acciona Energia Global.
Germany’s shipping giant Hapag-Lloyd AG is launching three container trains from Odesa – to Dnipro, to Kyiv and to Kharkiv. Each ‘block train’ will leave Odesa three times a week with 30-45 containers. A fast-growing segment, container trains grew by 41% last year in Ukraine. Based in Hamburg, Hapag-Lloyd is the world’s fifth largest container carrier in terms of vessel capacity.
Ukrzaliznytsia carried 16 million passengers on long distance trains last year, 30% of the volume of 2019. About 15% of passengers traveled on the elite Intercity and Intercity + high-speed trains, the state railroad reports. For all long-distance trains, the most popular routes last year were: Kyiv – Kharkiv: 712,700 passengers; Kyiv-Lviv – 652,800; Kyiv-Dnipro – 561,800; Kyiv-Vinnytsia – 472,600; and Kyiv-Odesa – 383,500.
Ukraine cut its coal import bill last year by 40% yoy, to $1.7 billion, reports, the State Customs Service. Ukraine cut its volume of imported coal by 22%, to 17 million tons. In dollar terms, the top three suppliers were: Russia – $1 billion, or 62% of the total; US – $480 million, 28%; and Kazakhstan — $126 million, or 7.5%.
After this week’s cold weather, ice breakers started work yesterday in Ukraine’s four most affected ports: Bilhorod-Dnistrovs’kyi, Kherson, Mykolaiv and Olvia.
Coronavirus hospitalizations jumped 25% in November, over October, to 63,958 cases, reports Ukraine’s National Health Service. On Friday, deaths hit a record level — 285. New cases reported are averaging about 13,000 a day, but many cases are never reported. On Friday, Odesa Mayor Hennadiy Trukhanov became the latest politician to be hospitalized for coronavirus. Since September, President Zelenskiy and the mayors of Kyiv, Kharkiv and Lviv have been hit by Covid.
Due to Thursday afternoon’s ice storm, flights in and out of Kyiv’s two airports were disrupted through noon on Friday. With Kyiv Sikorsky closed for several hours, Wizz Air cancelled two flights to Germany. A Wizz Air flight to Vilnius did not return to Kyiv and a Belavia flight from Minsk did a U-turn and returned to it base. The glaze over the city caused numerous traffic accidents and falls by pedestrians. A CCTV video of a woman trying to walk near Andriyivskyy descent went viral drawing millions of viewers worldwide.
Ukraine’s offering of dollar Eurobonds was three times oversubscribed Friday, causing the Finance Ministry to raise the final volume by 20%, to $600 million, and to push the rate down to 6.2%, one full percentage point below the yield for a similar 12-year issue last July. “The estimated yield of 6.20% is the lowest yield on public Eurobonds in US dollars in the history of Ukraine,” Finance Minister Serhiy Marchenko said in a statement posted on the ministry website. Five months ago, the government placed 13-year Eurobonds for $2 billion with a coupon of 7.253%. JP Morgan, Paribas and Goldman Sachs were the organizers of Friday’s placement. The offering started the day with a yield guidance of 6.4% for $500 million.
Tomorrow’s auction of government hryvnia bonds should draw more foreign buyers, analysts predict. Last week saw an uptick of foreign buying — $79 million – breaking a fall in foreign holdings since January. Fueling interest are: high yields – 12.25% for 4-year bonds, and a sense that the hryvnia/dollar exchange rate has stabilized after a 20% drop earlier this year. Since the start of the year, foreign holdings of the bonds dropped 34%, reports the National Bank of Ukraine. On Thursday, Dmytro Sologub, a deputy governor of the central bank, said the government’s need to finance the budget deficit is behind the recent increase in bond rates.
The World Bank approved Friday night a $300 million loan to help “prevent around 1 million Ukrainians from falling into poverty due to the COVID-19 pandemic,” the Bank’s Board of Executive Directors reported from Washington. The loan is designed to get “fast cash transfers to individuals and households who have lost their jobs or income sources because of the pandemic,” the Bank said. “According to World Bank estimates, 60 percent of the Ukrainians who may fall into poverty because of the COVID-19 outbreak do not currently benefit from any existing social protection program.” The money follows a similar $150 million loan approved last April under the Bank’s Covid-19 ‘Social Safety Nets’ project.
The EBRD’s new loans to Ukraine projects will hit €750-850 million this year, a ‘big increase’ over the average of the last four years, Matteo Patrone, EBRD managing director for Eastern Europe and the Caucasus, told the UkraineInvest conference Friday. Separately, the European Investment Bank is extending €1 billion in loans to Ukraine, making it the main loan recipient from the Bank in the ‘Eastern Neighborhood’, EU’s designation for 26 nations surrounding the EU.
Ukraine is to receive $250 million in US military aid under a defense spending bill approved Friday by the U.S. Senate in a 84-13 vote. Earlier in the week, the House of Representatives approved the bill by a similar overwhelming majority. Ten days ago, President Trump threatened to veto the bill over non-Ukraine issues. A Senate summary says the bill “authorizes US$250 million for the Ukraine Security Assistance Initiative, including US$75 million for lethal assistance, and extends the authority to support Ukraine in deterring Russia.” The bill also includes provisions to tighten sanctions on Nord Stream 2, the Russia-Germany gas line.
Ukraine plans to transfer all of the nation’s seaports to concessions or private ownership by 2025, Infrastructure Minister Vladyslav Krikliy told an online international investment conference Friday. Noting that concession contracts with foreign investors were signed this summer for two ports – Olbia and Kherson – he said that next in line for concessions are the rail, ferry and container terminals of Chornomorsk and the passenger terminal at Odesa port. Next will be concessions of Berdyansk, on the Azov, and Izmail, on the Danube. The Ministry is preparing to sell outright three small ports: Belgorod-Dniester, Ust-Dunaisk and Skadovsk.
By 2022, the government plans to reach concession agreements for highways, airports, rail stations and other infrastructure facilities, Prime Minister Shmygal said at the conference, which was organized by UkraineInvest. Speaking to an estimated 1,000 participants from 63 countries, he said: “During 2021-2022, it is planned to conclude concession agreements for seaports, highways, airports, railways and other infrastructure facilities.” He also said that over the next four years, President Zelenskiy wants Ukraine to climb into the top 30 of the World Bank’s Ease of Doing Business Index. After climbing 48 positions during the Poroshenko government, Ukraine now is in 64th place.
In the first half of next year, the State Property Fund plans to start the privatization of the United Mining and Chemical Company, the First Kyiv Machine-Building Plant (formerly Bolshevik), and stakes in six regional power companies, the head of the Fund, Dmytro Sennychenko, said Thursday at the Ukrainian Investment Roadshow. Last spring, the Rada suspended all major privatization auctions after coronavirus restrictions shut down almost all air travel. Sennychenko said he expects the Rada to lift the ban this spring.
Ukraine will receive – free of charge — enough Covid-19 vaccines to vaccination 4 million people this spring, Ukraine’s Chief Sanitary Doctor Viktor Liashko wrote Saturday on Facebook. In addition, Ukraine is budgeting $90 million to buy vaccines to inoculate another 13 million people. This would cover a little less than one half of Ukraine’s current population, estimated at 37 million. In a recent poll by the Rating Group, 40% of respondents said they would not take a vaccine, even if free.
FlightGlobal, a US-based news site, recalls that last year, Ukraine’s Antonov sought to seize five An-124 cargo jets operated by Volga-Dnepr because the Russian air cargo company performed life extension modifications on the planes without Antonov’s permission or participation.
The Black Sea Trade and Development Bank is extending at 9-year, €10 million loan to the Novopechersk School to build a new campus at Kyiv’s UNIT.City, nearly tripling enrolment to 1,200 students. Zoya Litvin, head of Osvitoria, the controlling non-profit association, says the K-12 school “will focus on STEM and IT, sectors that will develop the fastest in the future.” Litvin’s husband, Vasily Khmelnitsky, is developing UNIT.City as Ukraine’s largest hub for IT companies. Built on the 25-hectare grounds of a former motorcycle factory, UNIT.City expects to have 15,000 residents by 2025.
Parents of Kyiv’s French school are voting through Wednesday on an 18-month, €12 million project to build a 6,000 square meter unified campus at Unit.City. The project for Lycée Français Anne de Kiev would bring under one roof 750 K-12 students who now are divided among three buildings in central Kyiv and Podil. French government guarantees could cover bonds or loans raised to finance construction.
Ukrainians’ spending on foreign travel dropped in half this year, to $4.5 billion from $8.7 billion, Dmitry Sologub, a deputy governor of the National Bank of Ukraine, told reporters yesterday. “It was a significant factor in improving our current account,” he said. “Travel companies from March to June did not buy foreign currency at all, then they began to buy, but purchases remained low.” He expects foreign travel spending to rebound slowly next year, probably to $5 billion.
Starting March 28, UIA promises to gradually, but “completely restore” its international route network, the airline says in a note posted on its siteyesterday. Ukraine’s flag carrier plans to restore 43 international routes, including flights from Kyiv Boryspil to: New York, Toronto, Cairo, Delhi, Dubai, Jeddah, London Heathrow and London Gatwick, and 22 EU cities. Domestic flights will be operated from Kyiv Boryspil to: Dnipro, Ivano-Frankivsk, Kharkiv, Kherson, Lviv, Odesa and Zaporizhia. MXP) – Kyiv, and Kyiv – Nice (NCE) – Kyiv.
Windrose Airlines has applied to the US Department of Transportation to fly passengers and cargo between Ukraine and New York, reports the US-based aviation news site, One Mile at a Time. The airline, controlled by Ihor Kolomoisky, recently leased an Airbus A330-200, a wide body, two-aisle plane which can seat 400 passengers in three classes. “The airline will apparently use this A330 for charter services to New York and Hong Kong,” writes the news site, citing the US filing. “Windrose further anticipates directly operating ad hoc charters to and from the United States using its own metal.”
Passenger traffic at Kyiv Sikorsky through November totalled 670,900 passengers – 18% of the level of the first 11 months of last year. In November, Kyiv’s right bank airport handled only 13% the volume of November last year. The airport is on track to finish this year with a passenger volume slightly below 2013.
With its East-West gas pipelines, Ukraine would like to become a major supplier of hydrogen to Germany, Prime Minister Denys Shmyhal said Tuesday at the first German-Ukrainian Energy Day. “The development of hydrogen energy is a priority for Ukraine,” he said, alluding to the fast growing energy source. “It is an opportunity to use the existing potential of green energy and attract investments in the development of a green economy.”
Anka Feldhusen, Germany’s ambassador and host of the event, cautioned that Ukraine should first pay its $1 billion debt to wind and solar producers. One of 11 ambassadors to send a letter last month to Shmyhal about the mounting debt, Feldhusen said diplomatically: “I would not want Ukraine to lose its attractiveness to foreign investors because of this story.”
In Ukraine, DTEK is the pioneer in the hydrogen energy field, becoming Ukraine’s first company to join Hydrogen Europe, an association where European leaders exchange strategies and forge partnerships in hydrogen technologies. Emanuele Volpe, DTEK’s Chief Innovation Officer, said at the conference: “DTEK plans to launch a local hydrogen pilot project that will act as a catalyst for gradual development of the sector and accelerate the introduction of regulatory, technical, commercial, and logistics measures required to give a boost to the industry.”
Ukraine’s central bank decided yesterday to keep the prime interest rate at 6%, the level unchanged since June. Although inflation in November rose to 3.8%, the National Bank of Ukraine does not see it as an immediate threat. “Cooperation with the [IMF] remains fundamental for the recovery of Ukraine’s economy,” wrote a message posted on the bank website. “Financing provided by the IMF and other international partners is crucial for the planned budgetary spending.”
In a housecleaning exercise, the Cabinet of Ministers decided Wednesday to transfer 18 enterprises of the UkrOboronProm defense conglomerate to the State Property Fund for privatisation. With a total value listed at $10 million, the companies are expected to be sold largely for their scrap metal and real estate. Of the 18 companies, 11 no longer function. Five lost a total of $530 million during the first half of this year. A legacy of the Soviet military industrial complex of the 1980s, the list includes such entities as the Vinnytsia Aviation Plant, the Zakarpattia Helicopter Production Association, and the Lviv Radio Engineering Research Institute.
The Russia-Ukraine military divorce deepened last week after Russian Helicopters accused Ukraine’s Motor Sich of performing “illegal” overhauls of Mil Mi-17 helicopters for the Afghan Air Force, reports Moscow’s Ria Novosti. The Russians charge that the helicopters were designed and built in Russia and that any overhaul outside of the Russian manufacturer “endangers the lives of the American and Afghan soldiers that are operating these helicopters.”
Betting that online sales will keep surging, Allo Group, the consumer electronics retailer, is launching its own nationwide delivery service, Allo Express in Ukraine. Citing “today’s realities,” Allo CEO Maksym Raskin said the company decided to “to invest in the creation of our own postal operator.” The package delivery service will have desks in each of Allo’s 140 stores in Ukraine.
Work on laying Nord Stream 2 gas pipeline could resume this weekend in the Baltic Sea waters of Germany, near the Adlergrund shoal, reports Deutsche Welle. The local Stralsund Waterway Authority is advising ships to be careful when navigating the area starting Saturday. Meanwhile, Nord Stream 2 AG, gas pipeline company, says: “We plan to resume pipe-laying work using a vessel with anchor positioning in the exclusive economic zone (EEZ) of Germany this year.” With the US Congress preparing more sanctions against companies working on the $11 billion project, Norway’s DNV GL announced it will stop verifying services for ships and equipment used to build Nord Stream 2.
Canada’s Vermilion Energy has backed out of two production sharing agreements it won last year with Naftogaz, reports OilPoint, citing Ukraine’s state oil and gas company. The Calgary-based company “has decided not to participate in the projects due to significant reductions in gas and oil prices compared to 2019, the coronavirus pandemic and the global economic downturn,” Naftogaz said referring to the two sites, Balaklia and Ivanovo. Instead, Naftogaz will go it alone, investing $125 over the next five years to conduct 3D seismic tests and to drill 12 exploration wells.
Undeterred by this setback, Naftogaz is open to working with a foreign company, particularly Romanian, to develop the Dolphin block, in the Black Sea near the Danube delta and Romania’s maritime border. Working jointly with Romania to develop the shelf may be “more economically attractive” for Ukraine, and would create better security since Romania is a NATO member, Lana Zerkal, adviser to the Naftogaz CEO, said Friday at an online briefing. However, Exxon Mobil has been mulling selling its 50% stake in Romania’s Neptun Deep offshore project. Since 2008, it has shared this Black Sea block with Romania’s OMV Petrom, which is majority-controlled by Austria’s OMV.
But this year’s slump in oil and gas prices makes Ukraine unattractive to oil and gas producers, say experts interviewed by UNIAN. “I honestly think that the chances of attracting serious Western investors are minimal,” Gennadiy Kobal, founder of EXPRO Consulting, told the news agency Friday. “The record decline in gas prices has led to the fact that oil and gas companies have lost a significant part of their capitalization.”
Regarding the Dolphin block, Vitaly Radchenko, partner at CMS Cameron McKenna, said: “We have talked with many normal real, producing, foreign oil and gas investors. We worked with them to get them interested in the Black Sea shelf. The territory is viewed as controversial and dangerous. None of the real investors will come there to drill, because it could end up in a conflict with Russia. Therefore, giving the shelf for research to the state gas company is a logical decision.”
With winter temperatures increasingly mild, the Dnipro River shipping season is being extended for one extra month – to the end of December. Originally, the river’s six locks were to start closing in a north-south sequence in mid-November. But shippers, notably Nibulon, lobbied for an extended season, noting that last year serious ice did not start forming on the river until January. Under the direction of the State Maritime and River Transport Service, closing the river involves pulling out hundreds of buoys.
The $15 billion Istanbul Canal, an artificial alternative to the Bosporus, has reached the tender stage, Turkish President Recep Tayyip Erdogan said Friday. Expected to take a decade to dig, the 500-meter wide canal would allow liquefied natural gas cargo ships to enter the Black Sea for the first time. Further weakening Russia’s position in the Black Sea, the canal would not be subject to the Montreux Convention. This 1936 agreement places limits on the size and number of non-Black Sea navy ships allow to pass through the Bosporus.
Prime Minister Shmygal started a two-day visit to Turkey yesterday with a meeting with Turkish business executives in Istanbul. Appealing for Turkish investment, he said: “We have ambitious plans to build and renovate our infrastructure, including roads, bridges, energy and medical infrastructure, in other areas – water supply, sewerage, garbage recycling. Turkish companies have successful experience in these areas.” Today, he meets with government leaders in Ankara to discuss military and diplomatic cooperation. Leading a delegation of two ministers and two deputy ministers, Shmygal is flying in a Ukrainian An-148 regional jet. Turkey is interested in producing medium range military transports with Antonov.
Ukraine plans to purchase five more Turkish-made Bayraktar Tactical Block 2 unmanned aerial vehicles next year, Turkish media report. Last month, Azerbaijan used these armed drones in its successful war with Russia-backed Armenia. Signaling a closer partnership with Turkey, Ukraine’s Foreign Minister Dmytro Kuleba told Turkey’s Anadolu Agency Friday: “Ukraine, looks at the Nagorno-Karabakh issue from the perspective of international law. Our position is very clear. We are on the same page with Turkey.” In the second half of December, the foreign ministers and the defense ministers of Turkey and Ukraine are to meet in Kyiv in a ‘2+2 format’ – a sign of close bilateral ties.
In December, “the probability of a complete coronavirus lockdown is 90%,” David Arakhamia, head of the ruling Servant of the People Party in the Rada, said on Ukraina TV’s Segodnya show Saturday. In contrast to last spring’s general shutdown, this would be a ‘smart’ lockdown he said, intimating that the Kyiv metro and many public services would work until Dec. 25, the western Christmas, now an official holiday in Ukraine.
In preparation for a lockdown, a law to give financial aid to 2 million salaried workers hit by coronavirus controls goes into effect next week, Arakhamia told reporters on Saturday. These one time payments are to go up to $280 per person. The overall budget will be about $500 million, Yulia Kovaliv, the President’s deputy chief of staff said Thursday night on 1+1 TV’s Right to Power show.
About 10% of Ukraine’s small and medium businesses are on the verge of bankruptcy due to corona controls, Dafina Gercheva, resident representative of the United Nations Development Program, estimates in an interview with Interfax-Ukraine. By the end of December, the corona controls and recession will have put more than 9 million people – one quarter of Ukraine’s population — in financial distress, the UNDP predicts.
New coronavirus infections doubled in November, hitting an average of 16,250 a day on Friday and Saturday. In Kyiv, the number of new cases hit a record 1,739, Mayor Klitschko said Saturday. In Lviv, two patients, one aged 61 and the other 66, died Friday after a power outage knocked out their ventilators for one hour. Over the last eight months, 12,093 deaths are attributed to Covid-19. Immunologist Andrii Volyanskyi predicts on Facebook that another 25,000 Ukrainians will die of Covid over the next four months, the traditional peak flu season.
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 last night 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 yesterday. With the overdue debt approaching $1 billion, the government might launch $400 million worth of green bonds, he said. Later in the day, 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 yesterday 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 yesterday. 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 Tuesday. 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 yesterday. 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 inaugurates tomorrow 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.
arkovy, 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 Yefimov, then an MP with the Petro Poroshenko Bloc, confirmed that 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.
Iran plans to pay €200 million in compensation to families of the 176 victims of the Jan. 8 shootdown of the UIA passenger over Tehran, reports Al-Monitor news site. The money will come from the National Development Fund of Iran, not from the budget of the Iranian Revolutionary Guard Corps. An anti-aircraft unit of the Revolutionary Guards shot down the plane with two land to air missiles.
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.