By Sept. 15, all of Ukraine’s ports are to complete “extraordinary measures for government supervision” of the import, handling and storage of ammonium nitrate, Prime Minister Shmygal has ordered. The explosion of 2,750 tons of ammonium nitrate in Beirut’s port killed 171 people, wounded 6,500, left 250,000 homeless and cause $15 billion to the port alone.
Ukraine, Europe’s largest food exporter, is a major importer of ammonium nitrate, a key component of fertilizers. Last year, Ukraine imported 716,000 tons, at least seven times the volume of 2016, according to the State Statistics Service. Coming from Georgia, Bulgaria, Turkey and Romania, the chemical compound enters through a dozen ports – from Izmail to Mariupol. Inside the country, there are more than 600 warehouses for ammonium nitrate, Andriy Miselyuk, director of Dialogue Institute for Socio-Political Design, writes on
At Pivdennyi, Ukraine’s busiest port, 9,600 tons of ammonium nitrate are stored “in accordance with all norms and standards,” the seaport administration says in a statement. The compound is “packed in big bags” at berths No. 1 and 2. “In this case, it is not explosive,” the port asserts, that bulk handling of the compound is dangerous. During the first six months of production, the chances of explosion are low. Ukraine consumes 1.5-2 million tons a year, an amount that
Behind the devastating Beirut port explosion was a Russian business man who abandoned his ship, his 8-man Ukrainian crew and his cargo of ammonium nitrate in Beirut in 2013, according to a Reuters story, reported by 12 journalists in 11 cities, from Moscow to Panama City. Police questioned the de facto owner, Igor Grechushkin, aged 43, at his home in Cyprus about the cargo. The ship’s captain Boris Prokoshev, told Reuters from his home in Sochi that he sees Grechushkin
Flying the flag of Moldova, a landlocked nation, the ship, the Rhosus, was loaded in Sept. 2013 with 2,750 tons of ammonium nitrate produced by Rustavi Azot, a nitrogen producer in Georgia. The cargo was destined for a commercial explosives factory in Mozambique. En route, it developed a leak and docked in Beirut. Four months earlier, safety inspectors in Seville, Spain detained the Rhosus for a series of safety violations, including a corroded deck. In Beirut, Grechushkin ordered the captain
With the Rhosus disabled by the leak, Grechushkin abandoned the ship and the crew, both news agencies report. Four crew members were forced by Lebanese officials to stay on the ship for 11 months to prevent it from sinking. After a sailors aid group flew them home to Ukraine, the ship sank. According to Prokoshev, the captain, Grechushkin owes at least $150,000 in unpaid salaries. According to 112.ia, Grechushkin lives in Cyprus with his wife Irina, and their son, a
IFC is supplying a $35 million loan to help Galnaftogaz to improve its supply of fertilizer and fuels to small farmers. The Lviv-based company has pioneered allowing farmers to buy fertilizer and seeds in the spring, paying forward with ‘crop receipts,’ or liens on fall harvests. Galnaftogaz, with 357 OKKO-branded filling stations, is Ukraine’s largest fuel retailer. The loan from IFC, a World Bank unit, will also finance installation of fast-charging stations for electric vehicles.
After good weather in eastern and central Ukraine, the USDA has raised its Ukraine harvest forecasts to: 27 million tons of wheat, and 39.5 million tons of corn. “Yields are expected to be the second highest on record, with a previous record of 7.84 tons per hectare in 2018,” writes the US Department of Agriculture.
Ukraine’s Avangard, Europe’s largest egg producer, may close six of its 20 farms, cutting production by 20% by mid-October, reports Poultry World. UkrLandFarming, Avangard’s parent company, may have to lay off 2,500 employees. Avangard owner Oleg Bakhmatyuk says that due to ongoing court cases against him, he is unable to get bank loans. In 2010, Avangard raised $187.5 million in an IPO on the London Stock Exchange. But Russia’s 2014 annexation of Crimea and occupation of half of Ukraine’s Donbas
Next year, Ukraine will create a domestic airline based on a fleet of regional jets produced by Kyiv’s Antonov, Infrastructure Minister Vladyslav Krykliy said yesterday on a visit to Kharkiv State Aircraft Manufacturing Company. “Aircraft manufactured by Antonov will be used for regional transportation,” he said. To boost domestic air travel, Ukraine is abolishing the 20% VAT tax on domestic tickets. Last year, 16 of Ukraine’s 54 civilian airports carried passengers — on scheduled or charter flights. About 5 million
Betting that corona travel restrictions will ease, SkyUp announces seven new international routes for its winter schedule. Starting Oct. 25, Ukraine’s discount carrier will fly from Kyiv Boryspil to Amman, Belgrade, Bratislava, Belgrade, and Stockholm. It will also start Kharkiv-Dubai and Lviv-Dubai. On Sept. 26, it will start Kyiv-Dubai, a route that is to become five times a week.
Starting today, Ukraine’s new electronic visa platform launches at this address: https://evisa.mfa.gov.ua/. Citizens of India, the Philippines and South Africa will be able to get electronic visas for travel to Ukraine for business, tourism, medical treatment, culture, science, education, sports, and journalism. The e-visa should be printed out to show at border control.
After Belarus President Aleksandr Lukashenko cracked down violently in the wake Sunday’s presidential election, U.S. Secretary of State Mike Pompeo said Washington is considering ending oil shipments to Belarus. Most come through Klaipėda, Lithuania, to the Naftan refinery, in northeast Belarus. Several shipments of US oil have come this year through Odesa to Belarus’ southern refinery, in Mazyr, 50 km north of Ukraine. So far this year, Odesa has handled six tanker loads of oil for Belarus, largely from Azerbaijan.
Timur Khromaev, head of the Commission, said of the derivatives law: “It represents a big step forward in creating the conditions in which our economy can move to a more sophisticated stage of development.” Matteo Patrone, EBRD’s regional Managing Director said: “The new law will contribute to the establishment of a derivatives market in Ukraine. This is a major step forward to putting Ukraine on investors’ radar screens.”
Concorde Capital’s Evgeniya Akhtyrko concludes: “There is no improvement in the sentiments of the broader circle of market players regarding the risk level of UAH debt at the moment.”
Planes left Kyiv Sikorsky Airport half full last month. In July, Kyiv’s right bank airport handled 1,314 flights — 48% the number of flights of one year earlier. But the number of passengers was only 52,400 – 20% the level of one year earlier. The most popular international destinations were: Warsaw; Tivat, Montenegro; London Luton; Minsk; Dalaman, Turkey; Wroclaw, Poland; Bodrum. Turkey; and Tirana, Albania.
SkyUp Airlines returned in July to 50% of its pre-coronavirus traffic levels. Operating 704 domestic and international flights from Kyiv Boryspil, the low cost airline carried 96,407 passengers in July. Of its regularly scheduled foreign destinations, Albania was more popular than Bulgaria. For charters, Turkey was more popular than Egypt.
Air Astana resumes flights between Almaty and Kyiv Boryspil next Wednesday. From Almaty, the Kazakh national carrier flies to 26 destinations, including Beijing and Delhi. Air Astana suspended flights to Ukraine five months ago.
About 200 more state companies will be transferred to the State Property Fund for privatization, the Cabinet of Ministers decided yesterday. The companies are either unprofitable or are used “for various shady schemes,” Economy Minister Ihor Petrashko told reporters after the meeting. At the same time, the government is cutting by one third – to 200 – the proposed list of state companies exempted from privatization, Prime Minister Shmygal said during the Cabinet Meeting.
Until the coronavirus pandemic started, several foreign investor groups had planned to come to Ukraine this summer to study state companies scheduled for sale. Dmytro Sennychenko, head of the Property Fund, estimates that about half of Ukraine’s 3,000 state companies are bankrupt and will be liquidated. The others will be sold at public, electronic auctions, largely as is. To help foreign investors, the Fund has set up a bilingual Ukrainian-English website with ‘data rooms’ on each property up for sale. To
Ukravtodor presented yesterday a project to build $3 billion, 150km, three quarter circle Kyiv ring road. Designed to intercept traffic about 40 km outside capital, the bypass would link all major international highways that converge on Kyiv – from Kovel, Lviv, Odesa, Boryspil, Kharkiv and Chernihiv. Designed to carry 300,000 cars a day, the bypass road would include a new, 6 km bridge over the Dnipro, to be built south of Pivdenniy (South) Bridge. At the presentation, the national highway
A US company is negotiating with Mykolaiv regional authorities to build a $250 million waste recycling plant for the entire region, Alexander Stadnik, regional head, tells NikVesti, a local news site. For convenience, the plant would be located in Nova Odesa district, in the center of Mykolaiv oblast, reports Delo.ua. Stadnik did not identify the company, but said it is ready to start investing.
Fighting to preserve a joint venture with a Chinese company to control Ukraine’s aircraft engine maker, Ukraine’s DCH conglomerate told Reuters and NV business news site yesterday that it has signed an agreement to buy “more that 25% of shares” in the company, Motor Sich. Addressing fears that design and production would move to China, DCH, a Kharkiv-based group, told NV: “DCH will have the right to veto key business decisions.” NV speculated that joint venture idea was developed last
President Zelenskiy signed a law creating the legal and regulatory framework for derivatives – the financial instrument that helps to provide hedging opportunities against prices, interest rates or currency rate movements. Scheduled to go into effect next July 1, the law would allow such derivatives as swaps, which will allow Ukrainian banks, farmers and manufacturers, to hedge their foreign exchange exposures. Required under the IMF’s current standby agreement with Ukraine, the law was drawn up by the National Securities and Stock Market
The day after President Zelenkiy signed the law legalizing gambling, Parimatch, the largest betting company in Ukraine, announced that it will bid for hotel casino licenses in Ukraine. Founded in Kyiv in 1994, Parimatch has moves largely online, accepting bets on sporting events, e-sports, elections, show business, Eurovision and the Nobel Prize. With 1,600 employees, the company largely operates in Ukraine, Belarus, Kazakhstan, Russia and Cyprus, where it has its headquarters.
The Finance Ministry raised the equivalent of $366 million in its weekly government bond auction Tuesday – virtually the same amount as one week earlier. To keep, hryvnia rates from rising, the Ministry rejected the equivalent of $75 million worth of bids. Interest rates were little changed with 4-month bonds going for 7% and 2-year bonds going for 10%. By contrast, the Ministry satisfied 26 of 27 bidders for 1.5 month USD-denominated bonds at 3.6%.
The day after President Zelenskiy signed a law giving tax breaks to foreign film productions, Kyiv City officials announced a list of streets to be closed Aug. 12-25 for the filming of a Jean-Claude Van Damme film — ‘The Last Mercenary.’ Since most of this Netflix ‘comedy action movie’ takes place in France, it appears that Kyiv will be dressed up to look like a French city. Van Damme, a Belgian, is known to American fans as ‘The Muscles from
A record 1,232 China-Europe trains rolled in July, a 68% yoy jump, reports Xinhua from Beijing, citing China State Railway Group. With 40 trains plying the route daily, cargo was up 73% yoy, to 113,000 containers. Of the trains 724 went from China to Europe, up 74%. And 508 went from Europe to China, up 60%. Despite the coronavirus pandemic, this traffic has grown by double digits for every month since March.
This fall, Ryanair plans to launch two more Poland-Ukraine flights: from Lviv to Poznan and from Kharkiv to Warsaw. Ryanair, Europe’s largest carrier, also plans to increase frequencies out of Kyiv Boryspil to the seven Polish cities it served before the quarantine restrictions of last spring.
Germany’s FlixBus, the Europe’s bus transport operator, is opening its fourth Ukraine-Poland route: Kyiv-Warsaw, with stops in Zhytomyr, Rivne and Radom (Poland). Aimed at low budget tourists and migrant workers, FlixBus also offers three buses from Ukraine to Germany.
President Zelenskiy signed the gambling law yesterday, ending Ukraine’s decade-long ban on casinos and slot machines. The law restricts casinos to five-star hotels in Kyiv, and to four- and five-star hotels outside of Kyiv. Slot machines will be allowed in three-, four-, and five-star hotels. Billboard advertising is banned. Only people aged 21 or over are allowed to gamble. A portion of house winnings from gambling operations go to a new health, sports and culture fund.
Two days after the Rada passed the gambling law, on July 14, a nationwide poll found that 61% of the 2,000 respondents opposed legalizing gambling. Across the political spectrum, there was more support for legalized gambling among younger voters and among supporters of Golos, European Solidarity and Zelenskiy’s Servant of the People parties.
President Zelenskiy has signed a law dropping Ukraine’s 20% VAT from the production of videos, films, TV programs, cartoons and commercials for export. Zelenskiy, who owns his own production company, predicts foreign productions will boost hotels, restaurants, transport companies and law firms. He says: “It will also have a positive effect on the popularization and improvement of Ukraine’s image in the world, in particular, to improve its investment attractiveness in other sectors of the economy.”
Twelve distilleries of Ukrspirt, the state alcohol producer, may be next in line for privatization, Dmytro Sennychenko, chairman of the State Property Fund, said yesterday at the opening in Kyiv of AgroExpo 2020. Until the state monopoly on alcohol production was abolished earlier this year, Ukraine’s production of ‘cooking’ alcohol had quadrupled during the 2010s. For the Ukrspirt privatization to be successful the government must first approve the Alcohol Reform and Development Program, regulations which will provide for the procedure
Uniper, the Dusseldorf-based energy giant, says it may have to impair a loan to Nord Stream 2 if US sanctions kill the Russia to Germany Baltic gas pipeline. “The worst case would be, of course, if (Nord Stream 2) would never be finished and then, of course, the question is: can we get our money back or not?” Chief Executive Andreas Schierenbeck said on an analyst call yesterday, according to Reuters. Uniper has committed to fund up to €950 million,
Today, the third Chinese container train in three days is to arrive at Kyiv’s left bank Liski train depot. The trains take 15 days to travel 9,000 km from China, through Kazakhstan or Mongolia and Russia, to Ukraine. Noting growing interest from Ukrainian companies exporting to China, Ivan Yuryk, acting CEO of Ukrzaliznytsia said: “A significant number of importers and exporters have become interested in the availability of this service.”
Poland issued 44% fewer visas to Ukrainians during the first half of the this year, compared to the same January-June period last year, reports the Warsaw Business Journal. The drop to 270,000 visas is not as dramatic as it seems because Poland suspended residency rules during the epidemic, meaning that “a large part of Ukrainians simply did not leave Poland.” Krzysztof Inglot, head of Personnel Service, a Polish employment agency, says: “Those who were already in our country had the
Britain’s EasyJet, one of Europe’s largest low-cost airlines, may start flights between Italy and Ukraine by October. In late July, shortly, after Italy and Ukraine fully liberalized air traffic, ENAC, Italy’s Civil Aviation Authority, authorized the Austrian unit of easyJet to operate 12 weekly flights to Ukraine. EasyJet’s Italy bases are in Naples, Milan Malpensa and Venice Marco Polo.
Ernest Airlines is to be reborn this fall as a regional Italian carrier. Until the Milan-based airline went bankrupt last January, it operated 13 routes between Italian and Ukrainian cities. Ukraine’s travel press is welcoming the news that the discount carrier is to emerge from bankruptcy. Italy’s Naviganti site notes that the fleet of the new Ernest will be 16 Franco-Italian-made turboprops. These regional planes seat 70 and have a range of 1,500 km. The flight distance from Milan to
Austria, Georgia, Lithuania, Slovakia, and Canada have returned to Ukraine Health Ministry’s “Green” list. Travelers arriving from these countries do not take Covid-19 tests or self-isolate. Most countries in the world – 105 – are on Ukraine’s “Red” list. This includes: US, Cyprus, Israel, Spain, Poland Romania, Bulgaria, Greece, Estonia and the Netherlands. A 1,300-word article in the Kyiv Post outlines protocols for entering Ukraine.
Through Aug. 30, Ukraine has closed its two road checkpoints for entry into Russia-controlled Crimea, purportedly to control coronavirus. Only Crimean residents with Ukrainian passports are allowed to enter Crimea. Ukrainians who live on the mainland can return home. Although Russia’s annexation of the peninsula in 2014 radically cut Ukrainian tourism to Crimea, several hundred thousand Ukrainians travel to Crimea every summer, largely to visit friends and family and to check on their properties. There are no flights, ferries or
The cross-Danube ferry linking Orlivka, Odesa oblast, and Isaccea, Romania started service this week. Operating hourly, from 8 am to 8 pm, the ferry now carries only trucks. Passenger cars should start at the end of August, Yuri Dimchoglo, a co-investor in the project tells the Center for Transportation Strategies. Fares are: passenger – €1; motorcycle – €2; car – €15; minibus €25; big truck – €50. The ferry cuts out a 2-hour, 100 km drive with two border crossings
Vodafone Ukraine says that within two years its LTE 4G network should reach 90% of Ukraine’s population. By the summer of 2024 Vodaphone high speed network should cover “roads of international and national importance.”
Ukrainian farmers have harvested 33 million tons of grain and legumes, one third of this year’s forecast crop. Farmers have threshed 23 million tons of wheat, 87% of the forecast crop, and 8 million tons of barley, 90% of the forecast crop.
Ukrtelecom, the nation’s largest Internet service provider, plans to invest $110 million to lay 50,000 km of fiber optic cable to bring broad band to 2.6 million rural Ukrainians by the end of 2022. The drive is part of a $200 million effort by Ministry of Digital Transformation to increase rural broadband connectivity from 65% today to 95% in 2024. Yuri Kurmaz, Ukrtelecom’s CEO, says 8,000 rural clinics and 16,000 schools do not have broadband connections, reports Broadband World News.
In a double barreled response, Wang Jing, Board Chairman of Skyrizon, and Alexander Yaroslavsky, the owner president of DCH, issued statements denouncing the government interference in the transaction.
Kyivstar, plans to invest $180 million over the next two years to expand its 4G mobile Internet service to reach 90% of Ukraine’s population, says Kyivstar President Oleksandr Komarov. In the last six week, Kyivstar has connected 765 settlements in western Ukraine, bringing 4G Internet to 400,000 people.
To promote the economic revival of government-controlled Donetsk and Luhansk, the government is drawing up plans for a special status zone that would include major tax breaks and international arbitration for legal disputes. Prime Minister Shmygal tells RFE/RL the biggest incentives would be reserved for the “20-kilometer zone” to the west of the demarcation line. This line runs roughly 400 km northeast arc, from near Mariupol on the Sea of Azov, to the Luhansk border with Russia.
A “Donbas Economic Development Road Map” is to be submitted next month to the Cabinet of Ministers, according to Oleksii Reznikov is deputy Prime Minister for the Reintegration of Temporarily Occupied Territories. In a recent Atlantic Council Ukraine Alert Blog, he wrote “Our objective is to create a special investment regime in the Ukrainian-controlled part of the Donbas.”“We see the extension of international commercial arbitration rules to the region as an integral part of these plans. Additionally, the Ukrainian state
the cost to rebuild the Donbas under Russian control would be $10 billion. Speaking to Radio Donbas.Realii, an RFE/RL unit, he said that this would include donor money. The UN has fell far short in recent years in its campaigns for humanitarian aid to both sides of the line. Increasingly, Western donors funnel money into government controlled Donbas: a €64 million French loan for clean drinking water for Mariupol; a €25 million contract with Germany’s KfW development bank for displaced
As rail freight volumes recover, Ukrzaliznytsia carried 25.2 million tons in July, only 3% less than the tonnage carried in July 2019, reports Rail.Insider news site. Volumes have increased steadily since May, the month when cargo hit “bottom,” says Ivan Yuryk, acting CEO of the state railroad.
Ukraine’s forecast bumper crop for corn may run into geopolitical barriers as the US makes record corn sales – totaling 3.7 million tons — to China, warns AgWeek, the Fargo, North Dakota-based news site. China made the record buys of US corn to comply with a Trump Administration drive for more balanced US-China trade. Although Ukraine traditionally ships 3.8 million tons of corn to China every year, “that might not be the case this year,” warns AgWeek. China already has
Charges of “high treason” and a Presidential investigation surround a Chinese company’s attempt to assert 75% ownership of a Ukrainian company that once was the largest manufacturer of airplane engines in the Soviet Union. Triggering the controversy, Beijing’s Skyrizon announced last week that it has entered into a joint venture DCH Group, a powerful economic holding based Eastern Ukraine, to control Motor Sich. With the US government opposed to the Chinese purchase, Ukraine’s Antimonopoly Committee has started what could be
“We are partners and strive to keep Motor Sich on Ukrainian soil,” wrote Wang, whose company is based in Beijing. “It is Chinese investment that sustains the company’s prosperity, saving thousands of jobs in the historic city…We are very sorry that, after five years, we have experienced only confusion and disappointment.” Adding that “DCH will own more than 25% of the company’s shares, which gives them the right to participate in the management of the Company and maintain its Ukrainian
For his part, Yaroslavsky denounces as “state raiding” the government pressure on the investors in Motor Sich. From his base in Kharkiv, Yaroslavsky refutes press reports that key parts of the factory would be moved to China: “DCH Group is ready to use its experience and knowledge to ensure that Motor Sich develops and works for the benefit of Ukraine.” He warns that if the government stymies the joint venture, the future would be “filing of multimillion-dollar lawsuits by the
Iran will not compensate UIA for its jet Tehran shot down Jan. 8 because the Boeing 737-800 was insured by European firms, the head of Iran’s Central Insurance Organisation said Monday, Reuters reports from Tehran. “The Ukrainian plane is insured by European companies in Ukraine and not by Iranian companies,” said Gholamreza Soleimani, according to the Young Journalists Club news website affiliated with state TV. “Therefore, compensation should be paid by those European companies.” A new Boeing 737-800 costs about
US criminal charges against Ihor Kolomoisky could follow last week’s civil forfeiture complaints by the US Department of Justice, speculate Concorde Capital and the Kyiv Post. “Given that they [Kolomoisky and Gennadiy Bogolyubov] have already been accused by the U.S. Justice Department of money laundering and embezzlement (among other crimes), criminal charges are likely in the pipeline,” writes Concorde’s Zenon Zawada. “Though Kolomoisky can fight the forfeitures without being in court, criminal charges will likely require that he appear. That
The US moves seem to come partly in response to last month’s purge of bank reformers from the National Bank of Ukraine. In 2016, faced with a $5.5 billion hole at Kolomoisky’s bank, PrivatBank, the Central Bank nationalized the bank.
Zawada writes: “These accusations offer added insurance that Kolomoisky will not regain control over Privatbank. We believe they mark the peak of Kolomoisky’s influence in Ukraine, which will wane once criminal charges are filed in the U.S.”
Timothy Ash writes from London: “With recent moves against the reform team at the NBU, the US Government might have reached the conclusion that if they don’t move now, then the risk is the whole domestically driven legal push on Privatbank collapses, and with it I guess hopes for sustaining the 2015-17 bank reforms and bank clean up program…things are now moving so fast in Ukraine from the forces acting against banking reform et al, that the US decided that
Igor Kolomoisky rejects US Justice Department allegations that he and his partners bought office buildings and steel mills in the US property as part of a “conspiracy to launder money embezzled and fraudulently obtained” from PrivatBank, reports the Financial Times. “All investments in the USA were made from personal funds received in 2007-2008” from the sale of Ukraine-based steel industry assets and “from the income of other businesses” with accounts at PrivatBank, he tells the FT. “Everything else is categorically
Oleksiy Shaban has been named a Deputy Governor of the National Bank of Ukraine, giving Kyrylo Shevchenko, the new Governor, a majority on the central bank board. Shaban worked as director of the bank’s payment systems department.
Timothy Ash writes from London: “The new Governor Shevchenko is now fully in charge at the NBU…The IMF is signaling they will want to take some time to assess the changes at the NBU and give Shevchenko some time to prove himself…This likely means delay to IMF reviews and also IMF disbursements…I struggle to see further IMF credit disbursements this year.”
The use of payment cards jumped 17% yoy during the first half of this year in Ukraine, to 2.74 billion transactions, reports the National Bank of Ukraine. The size of the average transaction edged up 7%, to $15.
As Ukrainians shifted rapidly to cashless transactions, the number of cash transactions with cards – largely withdrawals from ATM machines – dropped by 12% during the first half of this year.
During the first half, the number of point of sale terminal increased by 5%. The number of issued cards also increased by 5%, to 71.7 million, or two for every Ukrainian.
Increasingly popular are contactless and tokenized cards. In June, almost 10 million contactless cards were used, up 25.6% since January. In June, 2.7 million tokenized cards were in use, up 22.5% from January.
Ukraine is moving to introduce green finance standards in the country, with a focus on green bonds. The World Bank’s IFC signed a cooperation agreement on green finance Friday with Ukraine’s National Securities and Stock Market Commission. Timur Khromaev, the Commission Chairman, said: “The Ukrainian capital market should become part of the global capital markets and our work aims to help develop this potential. Together with our international partners, we will work on policies to introduce green finance standards in
Jason Pellmar, IFC’s Regional Manager, said: “IFC’s extensive global experience has proven that investments providing environmental benefits are not only more ecologically sustainable but also more commercially sound. The development of green finance is gaining momentum throughout the world.”
Ukraine’s Commission recently joined the Sustainable Banking Network — a group of regulatory agencies and banking associations from 40 emerging markets committed to advancing sustainable finance. The Network represents 40 countries and $43 trillion, or 86% of total banking assets in emerging markets. With Ukraine owing almost $1 billion in unpaid electricity fees to solar and wind producers, green bonds increasingly are seen as a way out.
UIA only plans to return to regularly scheduled flights to New York, Toronto and Delhi in April, according to Evgeny Dykhne, president of Ukraine’s largest airline. He says: “As governmental restrictions begin to ease, UIA plans to return to the hub model in April 2021 and restore the route network by at least 80% and will include long-haul flights to New York, Toronto and Delhi.” UIA has Kyiv Boryspil-Toronto flights scheduled for Aug. 15 and 29, and Kyiv-New York flights
Kyiv Boryspil passenger traffic was down 80% yoy in July, to 328,667, from 1.6 million in July 2019. Hubbing, a key component of UIA’s model, was wiped out. Last month, the airport recorded 3,146 transfer passengers, less than 1% of the 358,746 passengers handled in July 2019. Thanks to a strong first quarter, Boryspil’s air traffic is down by only two thirds for the January-July, to 2.85 million people. Until anti-virus restrictions were imposed worldwide in mid-March, Boryspil was handling
Ukrzaliznytsia is doubling the frequency of Kyiv’s ‘train-to-the-plane’, the Boryspil Express. The train now travels 12 times a day between central Kyiv and Ukraine’s largest airport. The ride takes 40 minutes, with stops at Darnytsia, the left bank commuter rail station, and Vydubychi, the new right bank connection to the Green Line and buses to Odesa. Under the new schedule, trains leave Kyiv-Passenger station at 00:04, 03:00, 05:43, 06:30, 08:23, 10:00, 12:00, 14:00, 16:56, 17: 50, 20:14 and 22:01. As
Short term, Monday’s oil price crash will help Ukraine, a net energy importer. Oil and gas, Ukraine’s top import category, account for one quarter of Ukraine’s imports. In 2018, this import bill was $13 billion. On Monday, Brent fell 24% to $34.50 a barrel, nearly a 20-year low. European gas prices already are at 10-year lows.
This financial hurricane catches Ukraine without an Economy Minister or an Energy Minister. After last week’s Cabinet purge President Zelenskiy has yet to find replacements. Timothy Ash writes from London: “Who advised Zelenskiy to make this move at such a terrible time in global markets with coronavirus?”
Viktor Avdiyenko writes in Apostrophe: “Monday can be called ‘black’ with full confidence. But Russia is most likely waiting for ‘Black Tuesday, when stock markets open there. Russian and foreign analysts predict that oil quotes may continue to fall – up to $20 a barrel, and the dollar will rise to 80 and, possibly, up to 100 rubles.”
Long term, a world recession could drag down prices for Ukraine’s main commodity exports – food and metals. A recession could come about from an economy battered by spreading coronavirus restrictions and the collapse in energy prices. Starting today, all of Italy is under lockdown as the government seeks to contain coronavirus. The Saudi-Russia feud that triggered the oil collapse shows no sign of easing.
Global investors’ flight to safety is returning Ukrainian securities to the levels of last summer. On Monday, the yield on Ukraine’s dollar bond due 2028 hit 8.31%, the highest since June and an increase of 183 basis points since Friday. Similarly, nominal prices of Ukraine’s GDP warrants fell 7.4% Monday to 82 cents, the lowest since August. The hryvnia devalued by 1% against the dollar, hitting 25.
The collapse in oil prices will weaken Russia, Ukraine’s geopolitical adversary. When Moscow trading starts today after the March 9 holiday, the ruble is expected to weaken beyond Monday’s 4% fall. In London trading Monday, several major Russian companies, including Gazprom, saw their share prices fall by one quarter. In contrast to previous Russian recessions, the economies of Russia and Ukraine are increasingly de-linked, a legacy of six years of war.
Meanwhile back in Ukraine’s bricks and mortar economy:
Ukraine resumes poultry exports to the EU this week, ending a 6-week suspension due to the discovery of an avian flu case in Vinnytsia Region in mid-January. After imposing a blanket ban on poultry imports from Ukraine, the European Commission decided to zone the ban to a 10 km radius from the affected farm, Khutor. Ten other countries that imposed a ban — including Japan, South Korea, Azerbaijan, Armenia, and Moldova – are expected to follow the EU lead. “MHP
Last year, Ukraine increased its poultry meat exports by 26%, to a record, 414,000 tons, for $579 million, reports Ukraine’s Institute of Agricultural Economics. About one third of exports – 134,262 tons – went to the EU, making Ukraine the third largest supplier, after Brazil and Thailand, reports the European Commission. Last year, Ukraine was the world’s sixth largest producer — after Brazil, the US, the EU (with the UK), China and Turkey.
Chickens represent Ukraine’s animal husbandry bright spot, increasing by 2% y-o-y, to 211.5 million head on Feb. 1, reports the State Statistical Service. By contrast, the national cattle herd – milk cows and beef cows – were down 7% y-o-y to 3.1 million. Similarly, pigs were down 5.2%, to 5.6 million heads. Sheep and goats were down by 5.7%, to 1.2 million heads.
Residential housing increased by 27% last year y-o-y, to 11 million square meters. Newly commissioned housing was almost evenly split between single family houses – 53% — and apartments – 47%. Of the total, 62% were in urban areas. Kyiv City led the nation, with 1.1 million new square meters.
The schedule for ‘big privatization’ tenders – over $10 million – is: Dnipro Hotel and United Mining and Chemical – May; Odesa Port-Side Chemical Plant – August; President Hotel – October; Electrotyazhmash – November; Centrenergo – December. To prepare for sale, the State Property Fund is installing new managers. It is unclear how much success the Fund is having in annulling ‘poison pill’ management contracts.
One million additional cars may hit Ukraine’s roads this year, if current registration figures hold up. In January and February, 61,000 used imports and 14,000 new imports were registered, reports UkrAvtoProm, the auto industry association. Car sales usually pick up during the course of the year.
With demand for new office space strong in Kyiv, a record 255,000 square meters are to go on the market this year, more than double last year’s amount, according to a new Kyiv office research report by the CBRE Ukraine, the real estate consultancy. Reviewing office buildings under construction, CBRE estimates the same volume of new office space will come on the market in 2021 and 2022.
IT accounted for 44% of the new office space take up in Kyiv last year. This was followed by industry and energy with 25% and by co-working and temporary offices at 12%. With IT growing at 20% a year in Kyiv, CBRE predicts that the current office vacancy rate of 8.5% will stay roughly same through 2022. “If in the next two to three years, demand will correspond to the supply, then significant fluctuations in rental rates are not expected,”
Ukraine’s first concrete highway – a 160 km road used by Poltava grain trucks going to Dnipro – must be completed by the end of this year, President Zelenskiy vowed Thursday on a site visit. The north-south N-31 highway runs from Reshetilovka, Poltava Oblast to Dnipro, where there are road, rail and river connections to the Black Sea.
4G mobile service could be in all 52 stations of the Kyiv Metro by this time next year — if the Kyiv City Council sets tariffs as a meeting on Thursday, Alexander Komarov, Kyivstar CEO, said at a 4G test launch last week at Akademistechko station, the western terminus of the Red Line. With 4G, the total investment in the Metro by Ukraine’s big three mobile operators – Kyivstar, Vodaphone Ukraine, and lifecell – will total $20 million, estimated Oleksander
Thanks to Ukraine’s mild winter, highway workers fired up their bulldozers last week and started work on 34 projects in 14 regions, reports the press service of Ukravtodor. “A record early start was caused by favorable weather conditions,” reports the national highways agency. Working through November, Ukravtodor plans to spend a record $3.5 billion this year to upgrade 4,000 km of national roads and 2,500 km of local roads.
Turkish construction company Onur submitted a winning $488 million bid to complete the long unfinished bridge across the Dnipro at Zaporizhia, Ukravtodor reports on Facebook. The ProZorro tender called for building a 9 km highway with six interchanges and two major bridges — the highway connects Khortytsia island with the right and left banks of the river. The unfinished bridge has been a city landmark since construction first started 16 years ago. The Zelenskiy Administration wants the project completed by
Turkish construction company Cengiz has signed a memorandum of cooperation to upgrade the M14 road between Mariupol and Nova Kakhkova to the level of an international highway. Planner see upgrading this 350 km east-west route as key to easing the isolation of Berdyansk and Mariupol, Ukraine’s main ports on the Azov.
Russia has detained 2,249 ships since Kerch Strait naval clash of November 2018, Andriy Klimenko, editor in chief of the BlackSeaNews portal. With each detention for ‘inspections’ lasting an average of four days, shippers have lost $45 million, Klymenko told a European Parliamentary delegation last week in Brussels. He said: “More than half of the ships subjected to unreasonable detentions in the Kerch Strait are related to the EU — having a European flag, shipowner, or port of destination.”
Confounding stereotypes, the Kyiv metro area has 50% more ‘high quality retail space’ per capita than the Moscow metro area, according to new statistics by UTG, the Ukraine real estate consultancy. Kyiv’s metro population of 3.7 million people has 1.8 million square meters of shopping space, or two people per square meter. Moscow’s metro population of 12.5 million people has 4 million square meters of shopping space, or three people per square meter.
With Russia’s economy stagnant, the gap may grow. Without counting 21 Kyiv region malls in ‘concept’ stage, Kyiv is to add 550,000 new square meters – a 30% increase from today’s levels — by the end of next year. This would raise Kyiv’s retail saturation to 1.6 people per square meter, about double Moscow’s.
In Kyiv, 241,000 square meters of new retail space went on the market last year. This is 50% more than the 159,000 square meters of gross leasable area that went on the market in 2018. With the new supply, Kyiv’s overall retail vacancy rate is creeping up, hitting 7.8% in December. For regional malls, the vacancy rate is twice as high – 15.4%, reports UTG.
Ukraine’s retail sales are expected to grow by 10% this year, matching last’s growth. Growing three times as fast as GDP growth, retail is fueled by $1 billion a month in remittances from workers outside the country and the large portion of Ukraine’s economy – as much as 50% — that is off the books.
Supermarket chain Novus plans to open 10 new stores in Kyiv by the end of 2021, Ihor Landa, CEO of BT Invest Ukraine, the company that runs Novus, tells Interfax-Ukraine. He says the chain plans to expand because purchasing power is growing in greater Kyiv, now home to 10% of Ukraine’s population. Novus has 750 unfilled job vacancies.
For the first time, Ukrainian regional real estate projects will have their own stand at MIPIM, the leading European investment exhibition for the international real estate market. On show will be Ivano-Frankivsk’s Promrylad, a $25 million project to convert a Soviet era factory into modern multiuse space, says Anna Nestuly, Ukraine organizer of Ukraine’s delegation to the March 10-13 fair in Cannes. Counting the Kyiv city stand and the Ukraine regions stand, Ukraine’s delegation is to number 100, double the
Ukraine should aim to triple IT workers, to 650,000, and nearly triple IT export revenue, to $13 billion a year, Kira Rudik, a leader of the Rada’s Digital Transformation Committee, said in Zaporizhia. “The IT industry is growing fast,” said Rudik, former CEO of Ring Ukraine, now owned by Amazon. “We are an agrarian country. We have every chance to become a technological country. What we need to do to achieve this is increase export revenue to $13 billion a
With talks over the green tariffs adrift for the last six months, Prime Minister Alexei Goncharuk said Friday: “We anticipate serious problems for our energy sector to serve such high obligations…We also do not stand and do not support a retrospective change in the rules.” With investments frozen for many new projects, investors say the government is not showing adequate political will to forge a consensus with industry on tariffs.
Ukraine’s import price of gas may drop in half this summer – to $80 per 1,000 cubic meters – predicts Oleksiy Orzhel, Energy and Environmental Protection Minister. In January, Ukraine’s average price of imported natural gas was $175.26, already a 10-year low. With production sharing agreements coming up for auction in coming months, Orzhel warns ultra-low prices will turn off investment. He said Friday: “It will be very difficult to make decisions to invest in production…many companies have frozen their
The government plans to close most of Ukraine’s coal mines during this decade, Minister Orzhel said Friday at a presentation of a revised draft Concept for a Green Energy Transition To 2050. The cutoff level for production will be $40 a ton. “Very few facilities will be competitive,” Orzhel said, outlining a policy that he predicts will outlast the five-year Zelenskiy Administration. Referring to the social impact, he said: “It will not be shock therapy, but gradual closures.”
Russian health officials took a Chinese woman with symptoms of a respiratory illness off a Kyiv-Moscow train in Bryansk, Russia. The woman was hospitalized in quarantine. She and five Ukrainian passengers in the rail car later tested negative for coronavirus. The rail car was decoupled from the Ukrzaliznytsia train, sanitized., and isolated.