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  • As part of Ukraines foreign currency liberalization, the central bank may either reduce the share of foreign exchange revenue that has to be sold to 30%, from 50% -- or may cancel it outright, Oleh Churiy, deputy governor of the National Bank of Ukraine, told reporters on Friday.
    Liberalization of foreign exchange market in Ukraine does not mean legalizing transactions in dollars or euros, Churiy said. He explained: We believe that if we continue to continue the policy of macro-stabilization and lower inflation, we will return confidence in the national currency. It is gradually returning.
    As part of Ukraines drive to adopt EU rules, EU standards now apply for timber and lumber. In the EU, logs are graded for size and quality, in four classes A-D. Ukraine has dropped its earlier system, which assessed wood for its intended purpose.
    Lviv displaced Odesa as Ukraines busiest regional airport last year, coming in behind Kyivs two airports. Compared to the national average of 25% growth last year, Odesas passenger traffic grew last year by only 18%, to 1,446,521 passengers. By contrast, Lvivs passenger traffic by 48%, to 1,598,700.
    Lviv is not resting on its laurels. Airport director Tatyana Romanovskaya, the is negotiating with KLM for a flight to Amsterdam Schiphol and with LOT Polish for a weekly Lviv-Toronto flight. Ukrainian legislation does not allow a foreign carrier to carry passengers between two cities outside their home country. The airport director tells Lvivs Uvidpustku site that Delta Airlines executives tell her strong passenger numbers through Amsterdam would make a good argument for a New York Lviv flight. By April 1, Lvivs confirmed new destinations are: Copenhagen on Wizz Air and Riga on airBaltic.
    The regional rivalry heats up this summer when Odesas new runway is to draw European discount airlines Ryanair and Wizz Air, Infrastructure Minister Volodymyr Omelyan tells Radio Svoboda. Ukraines own discount airline, SkyUp, plans to launch flights June 2 to Odesa from Lviv, Kharkiv, and Kyiv Sikorsky. By June, SkyUp plans to have 10 Boeings in service, company CEO Yevgeny Khaynatsky tells the Center for Transportation Strategies news site. In one year, the new airline has gone from 17 employees to 250.
    A four lane Polish expressway will be knocking on Ukraines door by 2025, reports Polands Leftlane news site. The S17 divided highway will allow drivers to travel from Warsaw to Ukraines Rava Ruska border check point in 2h30min. From the border, it is a 70 km drive southeast to Lviv on the M09. Half built on the Polish side, the highway is to be part of the Gdansk-Odesa GO highway project, designed to allow trucks to travel from the Baltic to the Black Sea in 16 hours.
    President Poroshenko will meet with CEO members of the National Investment Council when he is in Davos, Switzerland, for the World Economic Forum next week. Speaking Thursday in Rivne, he described the Council as companies that invest in Ukraine and have a total capitalization of a trillion dollars. The Councils membership list speaks of who wants a seat at Ukraines table in the 2020s: Huawei, Posco Daewoo, Sumitomo, Marubeni, Citibank, Cargill, Bunge, Louis Dreyfus, Socar, Germanys Metro, Frances Engie and Dubais DP World.


    UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow Bureau Chief
    For comments and story tips, Brooke is reachable at: jbrooke@ubn.news
    Read More News on www.ubn.news

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    • UKRAINE BUSINESS NEWS
      Washingtons sanctions threat against European companies building Nord Stream 2 is hitting the Achilles heel of the Russia-Germany gas line, according to two Ukrainian energy experts interviewed by UNIAN. If the US imposes sanctions, then the probability of Allseas abandoning the project is 99.5%, Oleksandr Kharchenko, director of Kyivs Energy Industry Research Center, says of the Swiss-based offshore pipeline and platform company. Referring to the 3,000-employee multinational, he said: If Allseas falls into the sanction list, then for the organization it is a disaster, since most of the world's oil industry workers will not work with it.
      Sanction threats made to pipeline companies last week by US Ambassador Richard Grenell mark a turning point, Mykhaylo Honchar, president of Kyivs Center for Globalization Strategy XXI, tells UNIAN. Without their participation, neither Gazprom nor its European partners will be able to build a pipeline, he said, noting that neither Russia nor China have the underwater pipeline laying technology. Not many companies in the world do this. You do not need to hit on Gazprom. You need to hit on contractors. And this is a clear and correct action by the United States.
      Bundestag deputies angrily attacked the threat Monday, with several accusing the U.S. Ambassador of acting like a postwar Allied High Commissioner. German Foreign Minister Haiko Maas said: Questions of European energy policy should be decided in Europe, not in the United States. In reality, Germany worked to block implementation of EU resolutions against the gas line. Seeing the sanctions threat as real, UNIANs Nana Black puts them in the same league of the shoulder held missiles the Trump Administration now provides Ukraine, writing: This is more serious than the Javelins.
      Cadbury owner Mondelez is suing Zurich Insurance for its refusal to pay a $100 million claim relating to the NotPetya virus outbreak in 2017, reports the Financial Times. Spreading largely from malware on a Ukrainian accounting firm server, NotPetya rendered 1,700 company servers and 24,000 laptops "permanently dysfunctional" around the world, Mondelez says in a suit filed in Illinois. Zurich has refused to pay, citing an exclusion clause for a "hostile or warlike action" by a sovereign power, or people acting on their behalf. Reportedly emanating from Russia, the virus caused Danish shipping giant Maersk $300 million in losses and British consumer goods company $130 million.
      KPMG nearly doubled its Ukraine head count last year, adding 289 employees. Revenue increased by 39% to UAH 473 million, or $17 million. The Kyiv office attributes the growth to demand for advisory services by companies moving to EU standards.
      Ukrainian banks continue restructuring, cutting the number of branches last year by 10%. Of the net loss of 980 branches, most were closed by three banks: Oschadbank -- 575 branches; PrivatBank 222; and Ukrsotsbank -- 178. The National Bank of Ukraine lists the three banks, all private, that most increased branches: Alfa-Bank -- 65 branches; TASkombank 32; and Ukrbudinvestbank -- 20 branches. The banks with the largest branch networks in Ukraine are: Oschadbank 2,630; PrivatBank 2,021; and Raiffeisen Bank Aval -- 503.
      Ukraines state company Vazhmashimpex wants to revive Nigerias largest steel mill, Ajaokuta Steel Company Ltd., located midway between Abuja, the capital, and Warri, a major port on the Gulf of Guinea. Chinas Civil Engineering Construction Corp. is rebuilding the railroad to the coast. Yevhen M. Kozik, chief director of Vazhmashimpex, recently talked with political leaders in Abuja about reviving the nationalized mill and then met with Ukrainian engineers working at the site. Referring to the Soviet project from the 1980s, Valerii Aleksandruk, Ukraines Ambassador in Abuja, assures Leadership, a Nigerian news site: The plant was designed and built by Ukrainian engineers.
      The ranking of Ukraines biggest ports emerges from statistics for 2018 cargo volumes released by the Seaports Administration. The top five are: Yuzhne (Odesa region) 43 million tons; Mykolayiv - 29 million; Odesa - 21.7 million; Chernomorsk (Odesa region) - 21.5 million; and Mariupol (Donetsk region) - 5.9 million. With Odesas volumes down 10% last year, the Pearl of the Black Sea now plagued by corruption allegations seems fated to fall this year to fourth place.
      Russia can cut off Mariupol, Ukraines fifth busiest port, by rail as easily as by sea, Andriy Klymenko, chief editor of blackseanews.net news, warns in an interview with apostrophe.ua. The rail line from Mariupol travels 75 km northeast to Volnovakha, which is almost the frontlines, he says. Lumping Ukraines two Azov ports together, he says: Losing the production of Mariupol and Berdyansk [would be] a huge loss in GDP. We send 30%-40% of our metal exports from there. This is a loss of 1-2% of the nations GDP. We need to consider this very seriously. The Berdyansk rail line, departing 80 km to the west of Mariupol, travels northwest to Zaporizhia.
      VARAMAR, the Odesa-based shipper, is offering a new service a monthly sailing between Odesa and the Middle East and Asia of a ship capable of handing such oversized cargo as oil and gas rigs. Probable destinations include: Jebel Ali (UAE), Dammam (Saudi Arabia), Jeddah (Dubai), Sohar (Oman), Mumbai, Karachi, Singapore, Shanghai and Musan (South Korea). Well positioned for the forecast rise in oil and gas investment in Ukraine this year, the new shipping line already has brought oil rigs from the Middle East and UAE.
      In a bright spot for Odesa, seaport passenger terminal, one of the largest on the Black Sea, returned to life last year. Passenger numbers jumped to 321,647 last year, from 1,750 in 2017. Overall, Ukraines boat passenger traffic jumped by 170% last year to 515,593. Domestic traffic largely on the Dnipro and along the Black Sea coast tripled to 464,503. Foreign traffic increased by 9%, to 51,090. Sixty of all boat passengers used Odesa port.
      With river traffic returning to fashion, the volume of cargo moving on the Dnipro increased by 22% yoy, to 10 million tons in 2018.
      For the Gdansk-Odesa GO Highway project, Ukraine will spend $143 million this year to build, repair and expand highways running north and west from Odesa and Mykolayiv, Prime Minister Groysman writes on Facebook. The spending is part of Ukraines larger $2 billion road budget this year, a post-Independence record.
      Road crashes dropped 8% last year to 150,120, due to tougher laws and penalties, Olexiy Bilo****sky, the first deputy head of Ukraines patrol police, writes on Facebook. The highway death toll dropped by 2.4%, to 3,350, and injuries dropped by 11%, to 31,000. Last year, Ukraine introduced stricter speed limits in cities and higher fines for speeding, drunk driving and other moving violations.


      UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow Bureau Chief
      For comments and story tips, Brooke is reachable at: jbrooke@ubn.news
      Read More News on www.ubn.news

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      • UKRAINE BUSINESS NEWS
        ArcelorMittal Kryvyi Rih, Ukraines largest steel company and largest private company by revenue, plans to increase its capital investments this year by 30%, to over $450 million, reports the Dnirpopetrovsk-based company. Next month, it plans to hot test one of its big 2018 investments: two new continuous casting machines worth about $144 million.
        President Poroshenko says GDP growth hit 3.4% in 2018. This would be Ukraines highest growth rate in seven years, he told a business meeting in Volyn on Tuesday.
        At least $1 billion in investment is needed to complete Ukraines equivalent of Brazils Itaipu Dam, Igor Sirota, director general of Ukrhydroenerho, tells Ukrinform. At buildout, Dniester Pumped Storage Power Station, in Chernivtsi, will have the installed capacity of 2,268 MW the largest hydro project in Europe. By the middle of 2020, the fourth turbine of seven is to be commissioned. Through 2026, the state company needs $2.7 billion to complete its projects. We do not have such funds, he says. That is why we need to find other sources of financing.
        Ukrhydroenerho, the company that administers the nations largest power plants, produced 10.5% of the nations electricity in 2018. Energoatom, the state company that operates Ukraines four nuclear power stations, produced 53% of the nations electricity.
        Ukraine earned 41% more from electricity exports last year, sending $332 million worth to its western neighbors, reports the State Fiscal Service. The top three customers were: Hungary -- $190 million; Poland -- $79 million; and Moldova - $53 million. Exports are estimated at 6 billion kwh, up 15% from last year.
        Moldova should buy more electricity from Ukraine, which has the regions cheapest power,Moldovan power experts tell Ukrinform. Ukraines price is about 50 per megawatt hour. Comparative prices in Czech are 62, in Slovakia 64 and in Romania 83.
        With Norways energy projects growing in Ukraine, Prime Minister Groysman plans to open in Oslo on January 28 the Norwegian Ukrainian Business Forum 2019. Meeting Tuesday in Kyiv with a visiting Norwegian business delegation, Groysman cited two Norwegian companies: Scatec Solar, which has contracts to build 300 million of solar farms in Ukraine, and NBT, which plans to develop nearly 2 billion worth of wind farms. At the Oslo forum, Felix Cherny, chief procurement officer at state gas producer UkrGasVydobuvannya will talk about this years opening of Ukraines oil and gas business.
        Lower world dairy prices pushed Ukraines milk export revenues down 6% last year, to $264 million, reports the Milk Producers Association. The top three buyers are: Morocco, Kazakhstan and Moldova. Milk trends will be debated March 5-6 in Kyiv at the 12th International Dairy Congress.
        Chornomorsk was Ukraines fastest growing Black Sea port last year, handing 25% more cargo,far above the 2% average for Ukraines ports. Opened 50 years ago as a southern satellite of Odesa, Chornomorsk is to overtake Odesa this year, becoming Ukraines third busiest port, after Yuzhne and Mykolaviv. Last year, Chornomorsk handled 21.5 million tons of cargo. OdesaPort opened in 1794.
        The EU and the World Bank have drawn up a 12-year, 13 billion Eastern Partnership infrastructure investment plan that is to help fund 630 million worth of Ukraine projects, reports Deutsche Welle, drawing on a European Commission document approved Tuesday. Three Ukraine projects listed are: repairing the Cherkasy section of the Kyiv-Odesa E-95 highway -- 210 million; building a northern bypass highway around Lviv city -- 120 million; and, at Boryspil airport, building a new cargo terminal and rebuilding the second runway -- 300 million.
        By the end of this year, Antonov plans to resume production in Kyiv of the An-124 Ruslan, the worlds largest military transport aircraft. From 1982-2004, 55 Ruslans were built. Plans to resume production were suspended after Russias military attacks on Ukraine in 2014. Now, Antonov engineers believe they have crafted Ukrainian substitutes for all Russian parts, Sergey Omelchenko, first deputy general director of Ukroboronprom, tells TV channel Direct. Capable of carrying 230 metric tons of cargo, these four engine workhorses are carry military and civilian air cargo around the world.
        Ukraine International Airlines, the nations largest carrier, boosted its passenger traffic last year by 15%, to 8 million passengers. On its scheduled flights, 53% of seats were occupied by transfer passengers. By developing its Boryspil base as an international transfer hub, UIA gives Kyiv residents more destinations and more frequencies than the local market can support. With a largely Boeing fleet of 42 jets, UIA has 88 destinations, including four cities added last year: Cairo, Copenhagen, Delhi and Toronto.
        A Chinese company has designed a new terminal for Minsk Airport, reports TUT.BY, the Belarussian news agency. According to mockups unveiled by Chinese Aviation Industrial Corporation, a sleek new, 36,000 square meter terminal would replace the existing Soviet-era terminal. The airport is located 15 km from China-Belarus Industrial Park, an 80 square km site where construction has started on what is billed as Chinas largest industrial park in Europe.
        Investment in Minsk Airport is a bet on continuation of the Ukraine-Russia freeze on direct flights. In 2016-2017, the first full two years of the ban, passengers handled by Minsk jumped by 48%. Most of the 1.3 million new passengers a year fly to or from Ukraine. Specializing in the sanctions busting trade, Belavia flies to Ukraines five largest airports and to eight Russian cities. Kyiv-Minsk is a one-hour hop.
        Russias ban on Ukrainian overflights boosts prices of tickets on flights from Kyiv to Central Asia, China, India, Thailand and the Caucasus, Pavel Ryabikin, Boryspil Airports General Director, tells Interfax-Ukraine. For example, UIAs flight to Beijing must fly around Russian airspace, taking an extra four hours and costing the airline an extra $120,000 for each flight. UIA recently suspended flights to Astana because Air Astana can fly two hours faster to Kazakhstans capital, saving passengers time and money.
        Discount airlines plan to launch 25 new flights from Ukraine to the EU this year. But fine tuning is starting. On Monday, Italian-Albanian airline Ernest stops flights from Lviv to Venice and Milan Malpensa. It will also reduce -- to two times a week -- the frequencies of flights from Lviv to Naples, Rome and Milan Bergamo. On Feb. 9, Wizz Air drops its Kharkiv-London Luton flight, three months after it started.


        UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow Bureau Chief
        For comments and story tips, Brooke is reachable at: jbrooke@ubn.news
        Read More News on www.ubn.news

        Comment


        • UKRAINE BUSINESS NEWS
          With Romania to double natural gas production by 2025, Moldova is building a 100 km, $140 million gas pipeline to improve gas connections with Romania, Ukrinform reports. Romanias Transgaz is building a pipeline with an annual capacity of 1.5 billion cubic meters, more than Moldovas annual consumption. Designed to bring gas from Romanias new Black Sea fields, under development by Exxon Mobil and OMV Petrom, the new pipeline will run from Ungheni, a Moldovan border city, east to Chisinau, the capital. The new pipeline could be ready by the end of this year, when Ukraines gas transit contract with Gazprom expires. Currently, most of Moldovas gas comes from Russia.
          In a new threat to the Russia-Germany Nord Stream 2 pipeline, Romania has won the support of half of the EUs 28 member states for a bill that would require European Commission approval of new gas lines to Europe, reports Polish Radio. In 2018, such legislation was blocked by Bulgaria and then Austria, the two countries that rotated through the presidency of the Council of the European Union. On Jan. 1, Romania took over. Two weeks later, on Tuesday, it presided over discussions of a pipeline permission bill. On July 1, Finland, another Russia skeptic country, takes over presidency for the second half of 2019. Gazprom plans to finish the Ukraine bypass pipeline by the end of this year.
          Ukraines GDP growth and inflation are the best since 2013, says Yakiv Smoly, governor of the National Bank of Ukraine. The 2018 inflation of 9.8% is the lowest in five years. The forecast 2018 GDP growth of 3.4% would be the best in seven years.
          The Cabinet of Ministers re-approved the listing of 16 large state companies for privatization.The list is part of a larger group of 23 approved for privatization last summer. None were sold. For five companies, proceeding were held up in December by court challenges made by companies that lost tenders for advisory work. In an election year, analysts are skeptical that big companies will be sold. However, ProZorro auctions continue weekly for state owned properties under $9 million.
          Exports of eggs in shell increased in value by 37% last year, to $94 million. With new markets, like Singapore, opening up, exports increased by 21%, to 107,000 tons.
          To go with the eggs, state salt producer Artyomsol increased salt production last year by 22.4%, to 2.1 million tons. Salt exports rose 25% to 952,000 tons, or almost half of production. Top buyers from Artyomsol are: Hungary, Poland, Slovakia, Romania, and Serbia. The company is based in Soledar, Donetsk region, where salt has been mined since 1881.
          To add the bacon, the EBRD and the World Banks IFC are loaning a total of $25 million to a leading Kyiv region company to expand pig breeding capacity and to build a meat processing plant capable of processing 240 pigs an hour. Based 65 km east of Kyivs Boryspil airport, Niva Pereyaslavshchyna grows feed corn on 23,000 hectares. The group fattens pigs, slaughters them, and then markets the meat under the Pyatachok brand. To follow modern practices, Niva imported equipment from Denmarks Maskinfabrikken Faust ApS to move from natural gas to straw and from Austrias Schneider Abwassertechnik GmbH to treat industrial sewage effluent. Due to African Swine Flu outbreaks and a steady decline in household pigs, Ukraines pig population has dropped by one quarter in seven years, to six million today.
          Danish engineering company BIIR was named "Conscientious Taxpayer of 2018" by the Ukrainian Taxpayers Association. Last year, BIIR won international attention for its determined defense against a raider attempt to seize the site of its future Ukraine headquarters, a site overlooking Odesa ort. On winning the award, Thomas Sillesen, BIIR Group chairman, says: Its funny, but in Denmark we 100% follow all the rules as well, but nobody gives us any awards for this. Started in Luhansk in 2013, BIIRs Ukraine operation works on engineering projects for Danish companies, many in the wind and renewable energy sector. With 130 employees now, BIIR plans to have 500 employees working in its Odesa headquarters in 2022.
          Drivers may legalize 250,000 illegally imported cars by the Feb. 25 deadline, predicts Sergey Verlanov, deputy finance minister. This would be more than the 200,000 new and used cars legally imported last year. So far 30,000 cars have been legalized, earning the state $71 million in duties for the Pension Fund. Partly because of the flood of illegal imports, new car sales were flat last year, at 81,800.
          Kyivs Boryspil airport attracted 10 new airlines, 25 new destinations, and 62 more weekly flights last year, the airport reports on its website. Strengthening Boryspils role as an international hub, the number of transfer passengers increased by 17%. Overall, the airport increased its passenger flow by 19.4%, to 12.6 million.
          While rail passenger volumes to the EU doubled last year, passenger volumes to Russia fell by 15%, Infrastructure Minister Volodymyr Omelyan tells Pryamiy TV. After launching 20 new trains to the EU last year, Ukrzaliznytsia now plans to launch dedicated express service to Slovakia and the Czech Republic. Omelyan wants to end rail passenger trains to Russia, a break unlikely to take place in an election year.
          German and Czech moves to welcome more Ukrainian workers could undermine economic growth in Ukraine, the National Bank of Ukraine warns in a list of external and internal risks to Ukraines economy in 2019. Further wage growth and a local shortage of skilled workersholds back potential economic growth, and also exerts pressure on the level of prices in the economy, the central bank warns in its 2019 Action Plan.


          UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow Bureau Chief
          For comments and story tips, Brooke is reachable at: jbrooke@ubn.news
          Read More News on www.ubn.news

          Comment


          • UKRAINE BUSINESS NEWS
            Naftogaz is very optimistic that it will soon recover from Gazprom last years $2.6 billion settlement imposed by the Stockholm arbitration court, Andriy Kobolyev, Naftogaz CEO tells Novoye Vremya magazine. Noting that Naftogaz has filed law suits in six countries, he said: In three of them - in the Netherlands, Switzerland and the UK - we will soon have a hearing on forced sales. He added: Gazprom has overseas assets worth tens of billions of dollars. We have already arrested them for an amount in excess of the amount of Gazproms debt to us. I think its realistic to do this in about a year.
            Facing possible US sanctions on European companies building Nord Stream 2, President Putin said Thursday that given the volumes currently shipped to European customers, [Russian gas] transit via Ukraine remains feasible. He said that European demand for Russian gas will not be met by the two Nord Stream and Turkstream pipelines. He said Gazprom managers will discuss cooperation next week in Brussels. Speaking in Belgrade, he added: By the way, this includes transit via Ukraine, given the increase in current quantities of natural gas shipped to Europe, which last year set a new record above 200 billion cubic meters and continues to grow.
            President Poroshenko arrives in Jerusalem Sunday afternoon to sign the Israel-Ukraine free trade pact. In Jerusalem for one day, he will meet with Prime Minister Benjamin Netanyahu, President Reuven Rivlin, and Knesset Speaker Yuli Edelstein, reports the Jerusalem Post.
            Bottlenecks in a key road through Central Ukraine the E-50 running east from Lviv to Uman will be repaired and rebuilt this year summer, Slawomir Novak, head of Ukravtodor, the nations highways agency, posts on Facebook. Instead of a tortuous, 12-hour, 60 km/hour drive over 765 km, the rebuild should allow a 7.5-hour drive at 100 km/hour. The project will bring to EU standards 90% of Ukraines Gdansk to Odesa GO Highway. In 2020, work is to be done on the final two sections: the 276 km from Odesa Port to Uman; and the 75 km west from Lviv to Krakovets, on the Polish border.
            An international tender is to be opened this year for a toll road on the heavily trafficked Lviv-Polish border highway, writes Nowak. From 2011-2013, Slowak oversaw construction of toll roads in Poland when he served as Minister of Transport and Construction. Last month, his boss, Infrastructure Minister Volodymyr Omelyan, said that at least four Chinese and European companies are ready to participate in the tender for what would be Ukraines first toll road by concession.
            Recovering from the loss of Crimea, Ukrainian winemakers produced 5.5% more wine last year,hitting almost 20 million decaliters. Vineyards in sunny southern Ukraine accounted for almost all the grapes: Odesa 52%; Mykolayiv 36%; and Kherson 11%.
            Inflation will fall this year to 6.9%, from 9.8% last year, Yakiv Smoliy, governor of the National Bank of Ukraine predicted Thursday in a speech to the Rada.
            Ukraines banking system is profitable for the first time since 2013, Smoliy told the Rada. He said there are now 77 banks operating in Ukraine 4 state-owned and 22 with foreign capital. After the big shakeout of 2014-2017, only one bank was declared insolvent last year Russias VTB Ukraine unit. This year, one bank has until April 1 to meet capital requirements or restructure its debt.
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            • One third of Ukrainian CEOs predict their production will grow this year and one half say it will remain stable, according to survey conducted in Q4 2018 by the National Bank of Ukraine. The biggest optimists are in the processing sector and in Ternopol and Lviv regions. Optimism prevailed in all of the 24 regions, but for Kirovohrad.
              In a poll of multinationals, 74% of executives polled by the American Chamber of Commerce said they plan to expand operations in 2019. Polled at the Chambers annual general meeting last month, 22% said they plan to keep production level, and 4% plan reductions. Asked about salaries, 75% plan pay hikes for 2019. Chamber President Andy Hunder said later: Our members are very bullish.
              With Apple Pay and Google Pay increasing popular, the use of cashless payment technologies could increase by 25-50% this year, estimates the European Business Association. By the end of this year, as many as 20% of payments in Ukraine could be cashless, the Association says in a press release, citing Evgeny Veremiychenko, coordinator of the EBAs electronics payments committee. There is big room for growth. In Europe, the average penetration of point of sale terminals is 26,100 per 1 million people, four times Ukraines rate of 6,300 per 1 million.
              Two Kyiv-based hackers broke into Edgar, the database of the US Securities and Exchange Commission, and used confidential earnings reports to rack up $4.1 million in illegal trading profits in 2016, according to criminal charges filed in New Jersey. Artem Radchenko, 27, and Oleksandr Yeremenko, 27, were charged with securities fraud conspiracy, wire fraud conspiracy and other crimes. According to prosecutors, Yeremenko was the mastermind of a criminal group that included three more Ukrainians -- Igor Sabodakha, Victoria Vorochek and Ivan Olefir; one Russian Andrei Sarafanov; and two residents of Los Angeles -- Sungjin Cho and David Kwon. Reuters reports Ukrainian police have been unable to find Ieremenko since he was charged three years ago with stealing 150,000 non-public corporate press releases from Business Wire, Marketwired and PR Newswire.
              Next weeks World Economic Forum in Davos will be dominated this year by economic issues: anxiety over trade disputes, Brexit and a growth slowdown that could push the world economy into recession, Reuters reports in advance analysis. Of the Group of Seven countries, only the leaders of Germany and Italy Switzerlands neighbors and of Japan are to attend. Central bankers and economic ministers will dominate as government seek to reassure corporate leaders.
              Designed to promote networking and investor interest in Ukraine, next weeks Ukraine House in Davos will offer a high powered mix of eminent foreign experts and leading Ukrainian entrepreneurs. On Tuesday, foreigners talking about artificial intelligence are: Imtiaz Adam, founder and CEO of Deep Learn Strategies, Alexandra Johnson, founder and managing Director of Global Technology Capital, and Joe Landon, vice president, Advanced Programs Development, Lockheed Martin.


              UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow Bureau Chief
              For comments and story tips, Brooke is reachable at: jbrooke@ubn.news
              Read More News on www.ubn.news

              Comment


              • UKRAINE BUSINESS NEWS
                US-based Westinghouse has authorized Energoatom to use its technology to build a nuclear fuel plant in Ukraine, Igor Nasalik, Minister of Energy and Coal Industry, told the Rada Friday. At present, a Westinghouse plant in Sweden supplies 46% of nuclear fuel used in Ukraines 15 VVER reactors. Russias state-owned TVEL Fuel Company supplies the other 54%. Nuclear power supplies about one half of Ukraines electricity.
                China Nuclear Fuel Corporation has expressed interest in buying out Russias half ownership of Ukraines frozen fuel fabrication project. Half built in Smolin, Kirovhrad region, the plant was started by TVEL and Energoatoms Nuclear Fuel unit before Russias 2014 annexation of Crimea. , Pressured to cut nuclear ties with Russia, Nasalik said Friday that, with Westinghouse technology, Ukraine could make its own fuel within three years.
                Three-way Russia-Ukraine-EU talks take place today in Brussels to work on replacing Gazproms gas transit contract. The 10-year contract expires at the end of this year. In the first meeting in six months, talks are to be attended by Russias Energy Minister Alexander Novak and Deputy Head of Gazprom Alexander Medvedev and by Ukraines Foreign Minister Pavel Klimkin and Naftogaz CEO Andriy Kobolyev. The European Commission will be represented by Maro efovi. He takes leave from talks in February and March to run for president of his native Slovakia.
                In the first half of January, only eight ships docked at Ukraines Sea of Azov ports half the average of the same period 2016-2018, Andriy Klymenko, chairman of the Maidan of Foreign Affairs, tells Ukrinform. There are now [shipping] companies that indicate on their sites that they are not sending their vessels to Libya, Iran and the Sea of Azov, he says, referring Mariupol and Berdyansk ports. He cites research by BlackSeaNews, that shows average waiting times for Ukraine-bound ships to traverse the Kerch Strait from the Black Sea quadrupled from 28.4 hours in July to 124.2 hours in November.
                Cargo handled by Berdyansk port dropped by 24% last year, to 1.8 million tons, reports the Center for Transportation Strategies. Grain dropped by 12% and metals by 43%. Last year, cargo handled by Mariupol, Ukraines 5th busiest port, dropped by 10%.
                Germany and France are willing to monitor ship traffic through the Kerch Strait, Germanys Foreign Minister Heiko Maas said Friday in Kyiv. Fresh from meetings in Moscow, he said that Russia "must permanently ensure freedom of passage" through the Kerch Strait to the Azov, a binational sea. In Moscow, Russias Foreign Minister Lavrov told reporters that President Putin had agreed last month to a proposal by German Chancellor Angela Merkel for German experts to monitor the strait.
                Russia raises shipping costs in the Black Sea by closing waters off Crimea for drills, Ukraines Defense Minister Stepan Poltorak tells Priamiy TV Channel. Unfortunately, Russia continues its creeping offensive not only in the Azov Sea, but also in the Black Sea, he says. Every day, they close a huge territory of the sea coast under the pretext of conducting drills, under the pretext of testing weapons and equipment. And this happens in order to maximally obstruct the movement of merchant shipswhen they bypass the training area, the cost of the products they transport is much higher.
                Containers were the fastest growing segment of cargo handled by Ukrainian ports last year,according to analysis by the Center for Transportation Strategies. While overall cargo was up 2%, container cargo grew by 19%, to 846,500 units. The two big ports were: Odesa, up 15%, to almost 600,00 containers; Yuzhne up 78%, to 125,000 containers.
                Medical clinic chain Dobrobut wants to buy Boris Hospital, a rival private clinic group in Kyiv.Next month, Ukraines Antimonopoly Committee will review the planned purchase. Largely owned by Concorde Capital owner Igor Mazepa. Last year, Dobrobut opened a $3 million clinic in Kyiv. It now plans to open two more clinics in Kyiv and a maternity hospital. In 2014, it lost access to its clinics in Crimea and Donetsk.
                Once the target of shelling from secessionist Donetsk, Avdiivka Coke and Chemical Plant, now is running at full capacity, producing almost twice as much coke as in 2017, RFE/RL reports from the plant. Production now is 9,300 tons a day, compared to 5,000 a day in 2017. A purified form of coal, coke from Avdiivka fuels steelmaking furnaces across eastern Ukraine. Employing 4,000 workers, the plant is one of the largest in Europe. Many workers commute from Russian-controlled Donetsk, a factor that may have prompted local authorities to suspend shelling.
                Agro-businesses are the locomotive of Ukraines agricultural growth, according to new numbers from the State Statistics Service. Behind last years 8% overall farm production growth, production from agro-businesses grew by 12%, while production from family farms grew by only 2%. In a similar picture for livestock, agro-businesses increased livestock production by 2.8%, while family holdings of livestock decreased by 1.9%
                Kherson airport, a candidate for Ryanair and Wizz Air service this summer, increased its passenger flow by 42% last year, to 150,000, reports the Center for Transportation Strategies. Southern Ukraines closest airport to Crimea, Kherson hopes to win travelers from the occupied peninsula which, due to sanctions, only offers flights to Russia. Last year, almost two thirds of Khersons travelers flew international.
                Ukraine is negotiating visa-free access to 22 new countries, Foreign Minister Pavlo Klimkin tells reporters. If successful, this would give Ukrainian passport holders visa-free access to 150 nations, 78% of the 193 member states of the United Nations. Klimkin also says he backs allowing Ukrainians to hold dual citizenship, with the exception of Russian passport holders. Klimkin backs continuing current restrictions on Russian men visiting Ukraine for as long as the hostilities last.
                The Ukraine House opens today alongside the World Economic Forum in Davos to showcase Ukraines brains, hands and grains. Through Friday, forums will held to attract investors in artificial intelligence, emerging markets, renewable energy and fashion. Alexa Chopivsky, executive director of the Ukraine House, said in advance: We are delighted to amplify Ukraines voice on the global stage and substantial progress made, resulting in a paradigm shift in investors perception of Ukraine and its talented people.

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                • UKRAINE BUSINESS NEWS
                  Israel and Ukraine signed a free trade agreement Monday. The deal is expected to boost bilateral trade from the current level of $800 million to $1 billion in the early 2020s. Mostly beneficial for industry, the pact abolishes duties on 80% of Ukrainian industrial exports to Israel and on 70% of Israeli industrial exports to Ukraine. By contrast, Israel will cancel import duties for 9.2% of Ukraines agricultural products, and Ukraine will abolish import duties for 6.8% of Israels agricultural products.
                  Growth is expected for Ukraines exports to Israel of grain and cereals (except wheat), dairy products, vegetable oils, oilseeds, and cigarettes. If trade grows as hoped, a Odesa-Haifa shipping route could be opened. Prime Minister Groysman noted on Facebook that Israel is one of the top 20 prospective markets for our exports and is one of the main trading partners in the Middle East. President Poroshenko, who flew to Jerusalem to oversee the signing, said: It will make goods of our countries cheaper - Ukrainian goods in Israel, and Israeli goods in Ukraine. Next, we launch a new agreement on trade services -- and this is a great idea.
                  Food exports increased by 5% in dollar terms last year, hitting a record $18.8 billion, reports the Institute of Agrarian Economics. Farm products accounted for 40% of Ukraines total exports. The largest share of food exports went to Asia 43%. The EU took 33.5%. CIS countries took 10%.
                  The top 10 importers of Ukrainian food were: India $1.8 billion; China -- $1.1 billion; the Netherlands -- $1.1 billion; Spain -- $1 billion; Egypt -- $890 million; Turkey -- $801 million; Italy -- $738 million; Germany $667 million; Poland -- $657 million; and Saudi Arabia -- $589 million.
                  A new Russia gas contract with Ukraine should be for more than 10 years, with commercially viable volumes to attract a European company with high reputation, Maro efovi, European Commision vice president for Energy, said after Russia-Ukraine-EU gas talks in Brussels on Monday. He gave Russian and Ukrainian negotiators a proposal with specific volumes, tariffs and investment levels and asked both sides to return to talks in May. Ten European companies and one US company are interested in operating the pipeline. None want to buy it.
                  With the existing 10-year contract due to expire at the end of this year, Ukrainian negotiators say Russias strategy is to spin talks out as long possible. Ukraines presidential elections in April and European Commission elections in May could win Russia allies. Gazprom is delaying real talks in terms of transit in order to build Nord Stream 2 and then to have a different negotiating position, Yuriy Vitrenko, Naftogaz deputy CEO, tells Reuters. Then they will say, We are okay without any Ukrainian transits at all.
                  Without a contract, there will be no transit of gas through Ukraine," Vitrenko said. Unlike the Russian gas shutoffs of 2006 and 2009, Ukraine will be able to meet its gas needs from other sources, he said. This, first of all, an economic problem, he said. There will be no income from transit, which is about $3 billion a year.
                  A massive gas fire on board two merchant ships anchored near the Kerch Strait killed at least 11 sailors Monday afternoon, Interfax reports from Moscow. One vessel, a liquefied gas tanker, was reportedly fueling the other ship when fire broke out. A safety lapse on the two Tanzanian-flagged ships was cited by Russian official as the probable cause of the fire, the agency reports. The two ships were about 16 miles from Crimeas southeastern tip, an area where ships have been backed up since Russian border control forces started inspecting ships last sring. The Kremlin alleges there are bomb threats to its new $3.7 billion bridge.
                  This spring, construction starts on Kyiv Boryspils first airport hotel, Pavlo Riabikin, the airport director general, tells Interfax-Ukraine. He says permission has been granted for two hotels, with a near term goal of a total of 200 rooms. Two more companies are interested, he adds. Therefore, we consider four potential hotels. Construction work at one of them will start this spring.
                  The number of Ukrainians living in Lithuania jumped by 42 percent last year, outstripping Russians and Belarussians to become the largest group of foreigners living in the Baltic nation,according to Lithuanias Migration Department. The top three nationalities of foreign workers now are: Ukrainians -- 16,873; Russians -- 12,433; and Belarussians 12,162. Similarly, Lithuanias Social Security and Labor Ministry reports that last year Ukrainians received most Lithuanias multi-entry labor visas and its temporarily work permits about 60% in both cases.
                  With Baltic travel demand growing, Ukrzaliznytsia is doubling the frequency of its "Four Capitals" Kiev-Minsk-Vilnius-Riga train. Starting Jan. 30, the train will run twice a week. By air, Wizz Air flies from Kyiv Sikorsky and Lviv to Vilnius. Ryanair and UIA fly from Boryspil to Vilnius.
                  Kyivs Central Passenger Station, a rundown landmark used by 100,000 people a day, may join Mykolayiv Station as a candidate to be managed by a private concession, Infrastructure Minister Volodymyr Omelyan writes on Facebook. Noting diplomatically that the station and its surroundings do not correspond to the honorary title of a Kiev business card," Omelyan says an interagency meeting will be held next month to discuss proposals to turn this object into a modern, tidy, comfortable and safe public space. This year, Ukrzaliznytsya plans to create a station management operator and to offer tenders for transferring rail stations to concessions. With the new Boryspil Express train to Kyivs main airport, commercial real estate values in the immediate vicinity are expected to rise.
                  The Ukraine House in Davos opened with Alexa Chopivsky, the executive director, urging investors Monday to look at Europes last substantial emerging market. With Chopivsky leading an organizing committee of five women professionals, the House started with an evening panel dedicated to Female Profiles in Courage. Moderator, Elliot Gerson, executive vice president of the Aspen Institute, urged attendees to avoid manels, or all-male panels, a common conference curse in Kyiv.
                  Olga Kudinenko, founder of Tabletochki, a foundation supporting a childrens cancer hospital in Ukraine, said that attitudes toward charities are modernizing in Ukraine. But, recalling backbiting comments by other women about her initiative, she said Ukrainian professional women need to learn to support each other more. She also said Ukrainian men can be emotional cripples, citing awful statistics of men who abandon their families when a child falls ill.
                  Alaa Murabit, a Libyan-born peace worker, said that solutions to international conflicts have far better chances of survival if women are involved in core roles. Admitting that peace work failed in her native Libya, she said traditional forces pushed women out, often violently. Libya, now in its eighth year of civil war, highlights how there are often short windows of opportunity to settle conflicts -- before battle lines become entrenched.


                  UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow Bureau Chief
                  For comments and story tips, Brooke is reachable at: jbrooke@ubn.news
                  Read More News on www.ubn.news

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                  • UKRAINE BUSINESS NEWS Ukraines unicorns, or IT companies valued over $1 billion, will increase from two today -- GitLab and Bitfury -- to seven in 2020, predicts Andriy Kolodyuk, chairman of the Ukraine Venture Capital and Private Equity Association. Saying that 80 venture capital companies came to Ukraine since 2014, he said his association increased its membership last year by one quarter, to 57. In the next five years, Ukraine will be -- along with the UK and Germany in the top three venture capital and tech hubs of Europe, he predicted Tuesday before a standing room only audience at the Ukraine House in Davos. Michael Collins, CEO of Invest Europe, cautioned: Ukraine has a lot competition. But under questioning at the Emerging Markets panel, he conceded that in the last 25 years, all of Europe has only produced 35 to 40 unicorns. International score cards are useful for foreign investors trying to position Ukraine, Lenna Koszarny, Horizon Capital CEO, said at the panel, which was sponsored by EBS, the Kyiv business services company. Citing the World Banks Ease of Doing Business Index, she said Ukraine has improved from 152nd place in 2012 to 71st place last year. We have risen 81 spots and now are ahead of India, Brazil and Argentina, she said. On the Global Innovation Index, Ukraine is at 43, above India at 53. Recalling talks about Ukraine with investors already in India or South America, she said: Investors do compare. The five-year-old conflict in Ukraines southeast corner is often the top obstacle to first time potential investors considering Ukraine, said Daniel Bilak, chairman of UkraineInvest. He noted that investors have learned to live with the risk in Israel, which is in a perpetual conflict zone. Kolodyuk said: Maybe Ukraine is the new Israel. Koszarny urged the international audience to ignore the headlines and build the business. She said: I have not had an investor who came to Ukraine and then did not invest in Ukraine. Earlier, on a leadership panel, Jaroslawa Johnson, CEO of Western NIS Enterprise Fund, said she models the Ukraine Leadership Academy on a similar Israeli program designed to inculcate high school graduates with civic values and entrepreneurial skills. Started in 2015 and funded by Western NIS investment profits, the Academy has 246 students at six campuses across Ukraine. To build an endowment, a $50 million fundraising campaign is starting in the US. Young Ukrainians look at business free of the baggage of Ukraines post-Independence oligarchs, argues Sophia Opatska, founding dean Ukrainian Catholic Universitys business school in Lviv. Talking to a recent class, she was struck that the students had never heard of Dmytro Firtash, the fugitive Ukrainian oligarch who gained fabulous wealth as a middleman for Gazprom. Speaking at the panel sponsored by First Generation Capital Inc. of Toronto, she said: Students today do not follow the 1990s oligarchs. They are much more fascinated by Ukraine startups that have gone global. Mixed praise for Ukrainian IT talent came during an Artificial Intelligence panel, sponsored by ICU investment bank. Great computer skills are not matched by marketing skills, said Alexandra Johnson, a northern California venture capitalist who runs Global Technology Capital. If you do not teach entrepreneurship, how to get to the market, your idea will remain dormant, she said. Giles Farley, co-head of ICUs Venture and Tech Investments, said: I am told again and again that Ukrainian software engineers are incredibly creative, brilliant, but hard to manage. Imtiaz Adam, CEO of Londons Deep Learn Strategies, said he has hired software engineers in Lviv and Kharkiv and may open an office in Kyiv. Today, President Poroshenko meets at the Ukraine House with the National Investment Council CEOs of European, American and Asian firms with major investments in Ukraine. Also at the meeting will be Finance Minister Oksana Markarova and Christine Lagarde, managing director of the IMF. The EU proposal for a new, 10-year Russia-Ukraine gas transit contract calls for guaranteed minimum annual flows at 60 billion cubic meters, 31% below 87 bcm handled by the Ukraine pipelines last year, according to Reuters report from Brussels. On Monday, Russian and Ukrainian negotiators took home to study a proposal by Maro efovi, European Commission vice president for Energy. The three sides are to meet in May to see if they can agree on a contract to replace the 10-year contract that expires Dec. 31. Two contracts will be needed for Russian gas to flow through Ukraine next year, Elena Zerkal, deputy foreign minister for European Integration writes on Facebook. One would be a Russian-Ukraine interconnection under EU energy law. The second contract would be a Naftogaz-Gazprom contract for gas transit services. Gazprom proposes simply rolling over the existing agreement for 10 years. Ukraine officials reject this, saying the current contract does not comply with EU law and does not set minimum flows. Concorde Capitals Alexander Paraschiy writes: The chance that the Ukrainian and Russian gas monopolies will be able to reach any agreement by the end of 2019 looks negligiblethe only way for the Ukrainian side to secure transit of Russian gas in 2020 is to make EU-based traders purchase natural gas from Russia at the Russian-Ukrainian border. In this way, Naftogaz will not have to deal with Gazprom at allSo far, we see a high chance that volumes of Russian gas transit through Ukraine will plummet as of 2020, depriving Ukraine of more than $1 billion in export revenue. Construction of the Nord Stream 2 pipeline is far advanced and Germany wont be bullied into dropping it, Peter Altmaier, Germanys Economy and Energy Minister tells Handelsblatt, the business newspaper. In face of US sanctions threats, Altmaier said there is no legal basis for Berlin to stop the $11 billion, 1,220 km undersea pipeline from Russia to Germany. Separately, 73% of Germans surveyed by Forsa back building the pipeline under the Baltic. Two third rejected as false President Trumps assertion that the pipeline will render Germany dependent on Moscow. And 77% told pollsters from the sociological center that the Trump administration is using the sanctions threat to blackmail Germany. The two gas tankers that caught fire in the Black Sea off the coast of Crimea Monday were probably trying to evade U.S. sanctions and run liquefied petroleum gas from Temryuk, a Russian Sea of Azov port, to Syria, Reuters reports from Moscow. In the blaze, 20 of the combined crew of 32 are believed dead and both ships sank. In the scheme, Reuters sources say, one sanctioned ship changed its name from Candy to Venice, picked up gas at Temryuk, then tried to transfer the gas in stormy weather to a second sanctioned ship, the Maestro. The fire took place south of the Kerch bridge, in international waters UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow Bureau Chief For comments and story tips, Brooke is reachable at: jbrooke@ubn.news Read More News on www.ubn.news

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                    • UKRAINE BUSINESS NEWS
                      Horizon Capital, the US-based private equity fund management company, has raised $200 million for its third Ukraine fund, exceeding the original goal of $150 million. It is sending a message to the market that there are companies who want to invest long term capital in Ukraine, Lenna Koszarny, Horizons CEO, said of the 10-year fund. There is so much demand we are turning investors away.
                      In what Horizon calls the largest private equity fund raised for Ukraine in a decade, the fund has already invested $75 million in five export-oriented Ukrainian companies IT, light manufacturing and processed food. Over the next three years, the fund will also make $5-20 million investments in domestically oriented companies e-commerce, healthcare, pharma, consumer goods and financial services.
                      Norways NBT, Frances Total Eren, and the EBRD signed documents for 150 million in financing to build the first phase of one of the largest wind power plants in Europe. Planned for the north shore of Khersons Lake Sivash, facing Crimea, the wind farm at 400 million build out is to have 67 turbines producing 250 mw of power. Present at the signing at the Ukraine House in Davos, EBRD President Suma Chakrabarti said: Foreign investors are returning to Ukraine.
                      NBT could build an additional 750 MW of wind capacity in Ukraine, says Joar Viken, CEO of the Oslo company. At current construction prices, this would be a $1.3 billion investment. The 250 MW Sivash wind power plant is just the beginning, because over the next two to three years we plan new substantial investments in a number of wind power projects in Ukraine, Viken says in a press release of Ukraines National Investment Council. Later this year, NBT plans to start building a second wind power farm in Zaporizhia.
                      After dramatic jumps in the efficiency of wind turbines and solar panels, the next frontier is the technological challenge of storing power for use during peak demand hours, David Corchia, CEO of TOTAL Eren, told a Renewable Energy panel of the Ukraine Huse . Of concern to foreign investors, who are spending a total of $1 billions in wind and solar investments in Ukraine this year, the French CEO said: The cost of storage is reducing dramaticallySolar and wind electricity storage is going to be enormously cheaper in 10 years.
                      Backed by Europes largest deposits of lithium, Ukraines Infrastructure Minister Volodymyr Omelyan has talked to Chinese companies about building battery plants in Ukraine. Corchia said he does not know of concrete plans, adding: South Korea and China have decided to invest in this business, building factories that are very large, very competitive. As he spoke, Polands Prime Minister, Mateusz Moravetsky, announced in Warsaw that Mercedes Benz will build a 200 million battery plant in western Poland. At the plant, workers will assemble battery cells into blocks. By 2022, Mercedes plans to electrify all its models, and, by 2030 to spend 20 billion on batteries.
                      Carl Sturen, a former food processing investor and now CEO of Windcraft Ukraine said Ukraine, a major food producer should burn crop detritus for energy. If you could burn one ton of biomass per cultivated hectare, you could replace all imported gas -- 10 billion cubic meters, the Swedish wind power executive said. He said Ukraine has been living off nuclear power plants, largely installed during the Soviet era. The real price of electricity will come in 15 years, when most nuclear plants reach the end of their useful lives.
                      This spring, the Rada is expected to approve a law that substitute energy auction for Ukraines green tariff often considered the highest in Europe. At the Ukraine Houe, approval came from Janez Kopa, Vienna-based director of European Energy Community Secretariat. He said: There would be no investment if you continue with this feed in tariff it is so high no one trusts it.
                      Corchia warned about auctions with liars. Saying there are rarely big penalties against auction winners who do not build, he said some companies bid low, intending to resell. Michael Yurkovich, CEO of TIU Canada and sponsor of the panel, noted that his company is building a second solar plant in southern Ukraine, this one for 13.5 mw in Mikolayiv. He said: My market call is that after the election, after the change in the regulation from green tariffs to auctions, you will see a country that will be one of the greatest investment stories around.
                      Ukraine is well positioned to benefit from the fast growing demand for cyber security against attacks that wipe our corporate data, said Eugene Roman, former cyber security advisor to Canadian Tire Corporation. The unique advantage of Ukraine is creative engineers, Roman told a Data Security panel. Ukraine is a major force for change in that some of the best cyber defense and strategies came out of Kharkiv, Dnipro, Kyiv. Three years ago, he helped a Canada-based cyber security company move to Ukraine because they could not find the expertise at home. He said: They are very pleased with the results.
                      Ukraines outsourcing business is benefiting from a spreading loss of trust in Russian companies,Roman told the panel, which was sponsored by the IT Ukraine Association. Referring to a price paid for the revelations about Russian military intelligence hacking and troll factories in St. Petersburg, he said: This is crippling outsourcing work to RussiaIf you are a Western tech company, why move your work to St. Petersburg? With Ukraine and Belarus benefiting, he said: Russia is not winning international business.
                      Head, the American-Dutch sports company, makes tennis rackets in China. Yet when they decided to open a new ski boots, skis and ski bindings factory, they chose Vinnytsia, the central Ukrainian region. Chinas labor rates have gone up, Johan Eliasch, Head CEO, told the 21st Century Economy panel. You could have a nice property, and then you get a knock on the door, and they say you have to go in two years. Expand in China, forget it! Instead, Eliasch is building a 80 million factory preparing to move units from Czech, Hungary and Austria into a new industrial park in Vinnytsia.
                      IMF Managing Director met with President Poroshenko in Davos on Wednesday evening to discuss the Stand-By Arrangement approved last month by the IMF Executive Board and Ukraines reform progress. In one unscripted move, the IMF pulled the post-meeting statement from its website. Lagardes comment evidently was seen as too partisan, coming three months before the Presidential vote: I reiterated that the IMF stands ready to continue to support Ukraine, along with other international partners, in its reform efforts under President Poroshenkos leadership.
                      EBRD President Chakrabarti urged Ukraine to keep adopting free market reforms, despite the distractions of two elections this year. "We have reasonable confidence that the government will work stably and reforms will continue," he said Wednesday at a meeting of Ukraines National Investment Council in Davos. Pouring cold water on populist demands, he said: Many reforms have begun, and it will be difficult to remake them -- even if someone wants it.
                      For comments and story tips, Brooke is reachable at: jbrooke@ubn.news
                      Read More News on www.ubn.news

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                      • UKRAINE BUSINESS NEWS
                        Norways NBT plans to invest $1.5 billion over five years to create 1,000 MW capacity in wind farms in southern Ukraine, Joar Viken, CEO of the Oslo-based renewable energy company, tells UBN in Davos. We hope what we are doing will open the eyes of other private investors to Ukraine, he says. In February, construction starts on a first phase: construction of 64 Norwegian-made turbines for a $430 million, 250 mw wind farm on Lake Sivash, facing Crimea. This phase is to be complete by May, 2020.
                        Canadas TIU is acquiring two new solar projects in Odesa region, part of its strategy to invest $100 million to build 100 MW of solar power capacity in Ukraine by the end of this year, Michael Yurkovich, company CEO, tells UBN in Davos. The projects are spread through southern Ukraine: a solar plant inaugurated last year in Nikopol, Dnipropetrovsk; a plant under construction in Kalynivka, Mykolayiv; and four more to be built this year in Odesa and Mykolayiv. Solar is one of the best things you can do in Ukraine, he said earlier at the Ukraine House. And we want to be in on the ground floor.
                        Addressing a Davos audience of foreign and Ukrainian investors President Poroshenko vowed Thursday: We will stick to the course of the reform, and I as a president do my best to make this progress irreversible. Speaking at Victor Pinchuks annual Ukrainian Breakfast he said: We want to building a healthy, Western-style economy, base on small and medium enterprises. We dont want to back to a Soviet-style economy.
                        Poroshenko is to announce in coming days that he will run for a second term. Thursday, he spoke in English, while his main political rival, Yulia Tymoshenko, a populist, sat four meters away, listening to a translation through a headset. "We now have a very big danger of populism, the President said. And for those who do not understand what that means, I will say: That's what Chavez and Maduro did in Caracas, Venezuela, and you can see the standard of living of people in this country on TV.
                        The night before in Davos, the President said that since 2014 foreign investments have financed 238 new businesses in Ukraine. He spoke to foreign business leaders gathered at Ukraine House for a meeting of Ukraines National Investment Council.
                        Business conditions have improved in Ukraine, an American investor, a Canadian diplomat, and a Ukrainian reformer said at the Ukraine House in Davos. There is a huge cadre of people who are doing the right thing, said John C. Patton, managing director of Argentem Creek Partners. If you listened to the press and the compliance depts of banks, you would think Ukraine is a black hole. And Ukrainians themselves dont recognize the world class companies in their own midst.
                        On the investment panel, Roman Waschuk, Canadas Ambassador to Ukraine, said: The space and opportunity for corporate misdeeds has shrunk. Noting that his experience with Kyiv stretches back to the 1980s, he said: Ukraine is leaving the oligarchic, post-Soviet economic space, and is playing by world rules.
                        Since 2015, the government has canceled thousands of post-soviet regulations, said Oleksiy Honcharuk, head of the Better Regulation elivery Office. Funded by the EU and other foreign donors, this advisory body works to cut red tape and move Ukraine towards EU standards. Our main goal is to create a friendly environment for companies.
                        The panel was sponsored by Hillmont Partners law firm and Business 100, a new association of Ukrainian companies committed to Western business practices. Lenna Koszarny, a leader ofBusiness 100, described the first 50 members as business leaders who care about their reputations and are defining a new set of values for business in Ukraine.
                        With costs soaring for clinical trials of new drugs, Ukraine could join India, Israel and Thailand as a major site for this fast growing industry, James Peyer, managing partner of American biotech company Apollo Ventures told a Ukraine House Davos health panel sponsored by TA Ventures. There is a good opportunity for a country like Ukraine, which is very European, but not under the auspices of the European Medicines Agency. Running a company dedicated to finding drugs to combat age-related diseases, he said: Clinical trials could be done [in Ukraine] with the same level professionalism, with the same level of efficiency of the the US and Europe -- but without the cost.
                        After an unplanned 2-week Christmas shutdown of air cargo at Kyiv Boryspil airport, Infrastructure Minister Volodymyr Omelyan tells the UBN that construction is to start this year on a air cargo terminal capable of handling 100,000 tons a year, seven times more than the current terminal. The current terminal was built to handle 40 tons a day, Omelyan said. We got more than 300 tons a day during Christmas time.
                        Last year, Ukraines air cargo and mail rose 12% hitting 21,350 tons, well above the 14,600-ton capacity of Boryspil. The Dec. 24 to Jan. 4 shutdown infuriated air cargo carriers, with one writing a foreign business association about major damage that was done to the image of Ukraine because of this unprecedented event by Boryspil Airport. On Thursday the European Business Association reported that the cargo backlog is starting to settle. Last week, the EU and World Bank approved 300 million in aid to Boryspil for a new runway and a new cargo terminal.
                        A $450 million order for 13 new Antonov transport airplanes is being prepared, Internal Affairs Minister Minister Arsen Avakov writes on Facebook. The order would restart production of three models. This year, the Ministry wants to receive from Antonov one An-32b turboprop cargo, a plane that stopped production in 2012. Also from Antonov, the government wants 10 An-178 aircraft. Only one An-178 was made, in 2015, largely for promotional purposes.
                        From the Kharkiv Aircraft Plant, the National Guard wants to take delivery by 2021 of two An-74 jet transports, $30 million planes capable of carrying 52 passengers or 7.5 tons. This would mean upgrading and then restarting production of a plane that has not been made since 1994. A contract has not been signed with UkrOboronProm, the state defense conglomerate that controls both airplane manufacturers.
                        Air traffic at Dnipro rose by only 8% last year, the worst performance of Ukraines top eight airports. With 299,250 passengers, Dnipros traffic was one fifth the volume of Odesas. Both cities have 1 million inhabitants. Dnipro residents have lobbied Kyiv for the money to repave the airports bumpy, Soviet-era, concrete runway.
                        Instead, Infrastructure Minister Volodymyr Omelyan tells the UBN that construction starts this summer on a hub airport project in Dnipropetrovsk region. Roughly midway between Dnipro and Zaporizhia, the site is three kilometers from the newly rebuilt, four lane, 85 km Dnipro-Zaporizhia highway.Ukraines first airport built since Independence in 1991, the regional airport is to be ready by 2021. Foreign participation is expected. Today, experts from Airport Consulting Vienna are in Dnipro, studying the existing airport. Last month, the Infrastructure Ministry signed a memorandum of understanding with China Airport Construction Group Corporation.


                        UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow Bureau Chief
                        For comments and story tips, Brooke is reachable at: jbrooke@ubn.news
                        Read More News on www.ubn.news

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                        • UKRAINE BUSINESS NEWS
                          A Norway-Ukraine business forum takes place in Oslo today, with the expected participation of about 100 Norwegian companies. Norway is emerging as a leading foreign investor in renewable energy in Ukraine. NBT starts construction next month on what is to be a 5-year, $1.5 billion investment in wind power. Scatec Solar has contracts to build $350 million of solar farms in southern Ukraine. Mondays forum will be opened by Prime Minister Groysman and Norways Prime Minister Erna Solberg. With 60 Norwegian companies operating in Ukraine, bilateral trade last year was about $250 million.
                          Russian hackers are emailing Ukraines election workers virus-infected greeting cards, shopping invitations, offers for software updates and other "phishing" materials intended to steal passwords and personal information, Reuters reports, citing Seryhiy Demedyuk, head Ukraines cyber police. Hackers also are buying personal details of election officials, paying from cryptocurrency wallets used earlier by Russian agencies. Concentrating on civil servants who keep the election commission's equipment running, the virus-laden New Year's greetings on behalf of government bodies or the governments have become so widespread that they are just overwhelming, Demedyuk says. The spam contains malware to control the election officials computers.
                          Russias distribution of the NotPetya ransomware in the summer of 2017 was an act of war, Zurich American Insurance says in its defense against a $100 million damage claim by Mondelez. At Mondelez, NotPetya triggered shutdowns of 1,700 servers ad 24,000 laptops, creating chaos at factories and halting production, according to an Illinois lawsuit, cited by Toolboxtech news site. Mondelez filed a $100 million claim with Zurich for losses under a clause in its policy covering physical loss or damage to electronic data, programs or software caused by the malicious introduction of a machine code or instruction. Zurich bases its rejection an exclusion clause against losses caused by hostile or warlike action in time of peace or war by any government or sovereign power.
                          Through Saturday, a high level EU delegation is touring Ukraines Sea of Azov cities, studying highway building and railroad electrification projects. Led by Thomas Mayr-Harting, regional managing director for the EUs foreign service, and by Peter Wagner, director of the European Commission's Ukraine Support Group, the mission will visit Mariupol, Berdyansk and Melitopol, giving press conferences in each city. With an eye to increasing EU aid to land routes in face of Russias strangulation of Ukraines Azov ports, the EU mission will meet Infrastructure Minister Volodymyr Omelyan and Slawomir Novak, head of Ukravtodor, the highways agency. This spring, German aid is to rebuild the 226 km Zaporozhia Mariupol highway.
                          Brazils conservative new president, Jair Bolsonaro, met with President Poroshenko in Davos, aiming to expand trade and revive energy and military technology projects that languished during the previous government. The earlier, Workers Party government was seen as tilting toward Moscow. After Canada and the United States, Brazil has the third largest Ukrainian diaspora outside the former Soviet Union 500,000 people. In southern Brazil, this close knit, rural community supports five Ukrainian language radio stations, 23 Ukrainian dance troupes and an increasing number of state schools where Ukrainian language is taught.
                          Turkeys free trade pact with Ukraine will be completed later this year, well after the year end 2018 deadline announced last November in Istanbul by President Poroshenko and Turkish President Recep Tayyip Erdogan. Stepan Kubiv, Minister of Economic Development and Trade, said at a government meeting last week that the deal is 95% complete. Still to be hammered out are 1,200 points -- out of a total of 21,000. Ukraines farm exports are a big sticking point for Turkey.
                          Construction last year grew by 4.4%, to nearly $5 billion, the State Statistics Service reports. Residential construction was down slightly. But the largest segment, infrastructure was up 9%, to $2.6 billion. Overall, the 2018 growth represented a cooling after 2017, when construction shot up by 26%. As usual, Kyiv region led the ****ry, with $1 billion, followed by Odessa region, with $550 million; then Dnipropetrovsk region nearly $500 million; and Kharkiv region -- $455 million. The trend is down, with housing construction down 25% in December y-o-y.
                          A 6-story business center has opened at UNIT.City, effectively doubling the constructed area of this Kyiv IT hub to 30,000 square meters. Designed for 1,000 workers, the new business center has two large corporate tenants: Metinvest Digital and DTEK Academy. Vasyl Khmelnytsky, the founder of UFuture investment group, said last week of UNIT.City: We have already invested $50 million, and in the next year and a half we want to invest the same amount. Next month, his KAN Development starts construction of residences. At build out, this 46-hectare development, located between Dorohozhychi and Lukianivska stations on the Green Line, is to be 300,000 square meters 10 times the size of today.
                          With walnuts leading the way, Ukraines exports of fruits and berries rose by 17% last year,hitting $229 million, reports Ukrsadprom, the industry association. Walnut exports jumped by one third to 41,000 tons. With walnut plantings expanding in southern Ukraine, peeled walnuts fetch 10 times apples -- $3,670 per ton, versus $350 per ton. In the middle, frozen berries earn $1,640 per ton. The biggest buyers of Ukraines fruits and berries are: Poland -- $40 million; Turkey -- $20.4 million; France -- $16 million; Belarus -- $14 million; Greece -- $13 million; the Netherlands -- $11.2 million; and Italy -- $10.2 million.
                          Wine exports increased last year by 20% to $38 million, Olha Trofimtseva, deputy minister of Agrarian Policy and Food of Ukraine on European Integration, writes on Facebook. Still recovering from the loss of vineyards in Crimea, Ukraine imported $113 million worth of wine last year.
                          Wine producer Bayadera Group plans to invest $3 million in wine production this year, matching last years level. Bayadera plans to plant vineyards on 200 hectares in Mykolayiv and to invest in moving from corks to screw caps, Anatoliy Korchynsky, Bayadera director general, tells Interfax-Ukraine.
                          In the first three weeks of January, Ukraine used up its entire 2019 quotas for duty-free exports to the EU for corn, honey, grapes and apple juice, reports, the Ukrainian Agricultural Business Association. Other quotas are going fast: starch 17%; sugar 38%; and wheat fiber --44%. Last year, Ukraine tied Argentina as the fourth largest food supplier to the EU.


                          UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow Bureau Chief
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                          • UKRAINE BUSINESS NEWS
                            Ukraine cut its gas imports by one quarter last year, Naftogaz reports. Imports fell from 14.1 billion cubic meters in 2017 to 10.6 bcm. Domestic production overwhelmingly in the hands of state-owned Naftogaz increased last year by only 2.5%, to 21 bcm. At the same time, Ukraines GDP grew last year by an estimated 3.4%. In this context, the most likely causes for the import drop were increased energy efficiency and shifts to other energy sources.
                            Foreign investment can renew Ukraines small scale hydro power, Arne Jakobsen, CEO of AICE Hydro A.S., said Monday at the Norway-Ukraine Business Forum in Oslo. This year, AICE plans to bid in the privatization auction of the 90-year-old hydro plant in Pervomaisk, Mykolayiv. Inaugurated in 1929 with two German generators, the 2MW power station on the Southern Bug is the first of several small hydro plants up for privatization by the State Property Fund.
                            Ukraine has 64 operating small scale hydro plants and 100 more that can be restored, AICE says.Dedicated to reviving and modernizing existing plants, AICE aims at combining Norwegian and Ukrainian competence within hydro energy. Norway is the largest user of hydropower in Europe, getting 98% of its electricity from hydro dams.
                            Europes stampede toward electric cars is likely to increase the flow of good quality used cars for sale in Ukraine. Sweden has just joined Denmark, Ireland, the Netherlands, and Paris in promising to stop registration of gasoline and diesel powered cars in 2030. Norway starts such a ban in 2025. In the last two years, over 200,000 used cars came to Ukraine, stalling new car sales.
                            About 90 IT companies already are located in UNIT.City, Maksym Bakhmatov, managing partner of UNIT.City Innovation Park, writes in an Atlantic Council report titled: Heres How to Nurture Risk-Taking Among Ukraines IT Sector. Stressing the synergies and concrete benefits for entrepreneurs of working in the IT hub, he writes that 60% of the companies are engaged in joint projects at the crossroads of fintech, agritech, blockchain, and artificial intelligence.
                            Spinbackup, a San-Francisco-based cloud security solution provider with Ukrainian roots, has raised $1.5 million in a round led by bValue, a Polish venture capital firm, reports Ukraine Digital News. The deal was announced by AVentures Capital, a Kyiv-based venture fund which invested $500,000 in Spinbackup in 2017. Some of the new money will be used to hire high-level IT engineers for Spinbackups R&D offices in Kyiv and Odesa.
                            Work at the Kherson and Mykolayiv shipyards doubled last year, to $22 million, reports Smart Maritime Group, owner of the yards. For a Dutch company, VEKA Shipbuilding WT BV, the yards are building hulls for two chemical tankers, the Nevada and the Nebraska. In addition to repairing 76 ships, the yards repaired an 80-ton crane, and manufactured 2,000 tons of steel structures for Southern Mining and Beneficiation Plant, or YuGOK.
                            Nibulon, the grain producing and exporting giant, moved 24% more cargo by river yoy, the company reports. Nibulon vessels made 660 trips, moving 2.8 million tons of grain and oilseeds. From Black Sea ports, the company aims to export a record 6 million tons this marketing year. Exporting for the first time to Finland, Denmark, Norway, Nibulon tripled the EU share of exports to 35%. Nibulon is building a Black Sea port complex in Ochakiv, Mykolayiv; a river transshipment terminal in Ternivka, Zaporizhia; and plans to build its latest Dnipro river port in Bilozerka, Kherson.
                            Kernel, the agriculture holding company, boosted its grain and oilseed exports by two thirds, to 3.1 million tons, in the first half of the current July 2018 June 2019 marketing season, the company reports. The company increased its sunflower oil exports by 8%, to 777,000 tons, shipping largely to Iraq, India and China.
                            Salaries grew at more than twice the inflation rate last year, Stepan Kubiv, Minister of Economic Development and Trade, told the Rada. The average wage increased by 22.5%, compared to 9.8% inflation, he said.
                            A Czech company agreed to pay four cents on the dollar for $285 million of bad corporate loans held by the Deposit Guarantee Fund. Through an auction on ProZorro.sale, APS Holding is to pay $11 million for the paper from shuttered banks. Based in Prague, APS boasts on its website of 14 years of experience on the distressed debt market.
                            Czech koda JS may have been chosen for a $2.5 billion contract to build two nuclear reactors at Khmelnytskyi Nuclear Power Plant, reports Schemes, the RFE/RL investigative reporting program. However, koda is ultimately controlled by Russias Gazprom, a fact that may prompt the government to veto the choice.
                            The EU backs construction of the two 1,000 MW reactors. To connect with the EU grid, power lines could be built either 250 km west to Poland, or 250 km southwest to Ukraines Burshtyn energy island In 1990, in the wake of the 1986 Chernobyl disaster, construction stopped on the two reactors, leaving one 75% complete and the other 28% complete. Two years ago, Korea Hydro & Nuclear Power signed an agreement to work on the project. More recently, Energoatom prepared a feasibility study with China National Nuclear Corporation, a state-owned company familiar with Soviet-era nuclear power designs.
                            Facing a labor shortage, the Czech Republic is considering doubling its Ukraine quota of work permits to 40,000, Tom Petek, the Czech Foreigh Minister, tells Ukrinform prior to his visit to Ukraine this week.
                            Today, Petek visits Mariupol as part of a EU delegation beefed up with European Investment Bank officials. We are discussing EU financial assistance for road, rail and port projects, Viktor Dovhan, Deputy Infrastructure Minister, writes on Facebook of the Azov ports tour.
                            In December, Leo Express, a private Czech rail carrier, plans to launch a Prague-Krakow-Przemysl-Lviv train, according to Rynek Kolejowy, a Polish news site. Trains would run four times a day on the seven hour route. Asked about the train, Infrastructure Minister Volodymyr Omelyan tells the UBN: We are ready to accept it. Separately, Czech Airlines plans to restore on May 30 its direct flights between Prague and Odesa.
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                            Starting in April, Kyiv will have the power to tow cars from sidewalks, Mayor Klitschko tells Interfax-Ukraine. Police will be equipped with cameras to record violations, allowing towing. Cars that block pedestrians and baby carriages on sidewalks can be towed. With tourism growing from the EU, cars parked on sidewalks gives the capital a tawdry post-Soviet air. Enforcement of the new laws is expected to encourage drivers to use existing parking garages and to encourage investors to build new ones.


                            UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow Bureau Chief
                            For comments and story tips, Brooke is reachable at: jbrooke@ubn.news
                            Read More News on www.ubn.news

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                            • UKRAINE BUSINESS NEWS
                              Norways NBT plans to start building this year a $1.1 billion, 742 MW wind power plant on Zaporizhias Azov coast, according to an agreement signed Monday in Oslo with Ukraine partners Andriy Zhovner and Yuriy Kizilov. If financing comes as planned, the project should be fully operational in 2022. Located in the Yakymivka district, the plant is to be 100 km east of a separate NBT wind power project: a $460 million, 250 MW plant on the north shore of Khersons Lake Sivash. That project is to be completed next year.
                              Norwegian wind and solar projects in Ukraine add up to $1.5 billion in coming years, Prime Minister Groysman said Monday at the Norwegian-Ukrainian Business Forum in Oslo. By contrast, bilateral trade last year was $255 million, an 8% increase over 2017.
                              Farming, IT, engineering, infrastructure and logistics, and tourism are the five economic sectors where Ukraine can lead in the 2020s, President Poroshenko said Tuesday, announcing his bid for a second 5-year term. Advocating a free market economy, he said: "Responsible economic strategy dictates us the need to clearly define priorities and focus on those sectors of the economy where we can take leadership positions. For IT, he called for more R & D. For agriculture, he called for more investment in processed products for export.
                              For tourism, he hailed the recent surge in direct flights from the EU to Ukraine. He said decentralization provides local mayors with the money to improve roads, unlocking sea, mountains, and unique historical sights to visitors. He said: Tourism is a colossal market for small and medium businesses.
                              On the macro side, he noted 12 successive quarters of economic growth, saying: Statistical data, although not in line with the mood and feeling of people, convincingly testify: the worst thing behind us. Sketching out a social aspect to a second term, he said: Poverty is our enemy, perhaps even no less than the aggressor country of the Russian Federation.
                              Staking a firm pro-Western stance, Poroshenko said his second term would be capped in 2024 with a formal petition to join the EU. Addressing thousands of supporters, he asked voters for a mandate to ensure the irreversibility of the country's European and Euro-Atlantic integration and our independence.
                              In the latest investment in Mariupol, Ukraines Azov seaport besieged by Russia, France agreed Tuesday to provide 64 million in concessionary loans to provide drinking water to the city of 500,000. The city population has grown with the migration of Ukrainians who do not want to live in the Russia-controlled zone, 20 km to the east. The EBRD is loaning the city 20 million to rebuild the citys trolley bus system. With Russian forces restricting ship traffic to Mariupol port, Prime Minister Groysman seeks EU aid to complement $35 million the government is spending on upgrading road and rail lines out of Mariupol. On Tuesday, Mariupol hosted the foreign ministers of Denmark and the Czech Republic and representatives of the EU and of the European Investment Bank.
                              With US sanctions hanging over the Nord Stream 2 gas pipeline, talks continue to attract 6 billion, or 63% of the total project cost, according to Russian news reports citing Paul Corcoran, financial director of Nord Stream 2 AG. Speaking Monday at the European Gas Conference in Vienna, Corcoran said 500 km of the 1,222 km or 41% -- of Russia-Germany Baltic gas line has been laid. Corcoran asserted that construction is on schedule for completion by the end of this year, TASS reports.
                              Ukraine has 110 R & D centers, 4,000 IT companies and 184,700 software designers, according to an X-ray of the fast growing IT industry, prepared by App Annie, a multinational data research company. Already 20% of world companies working on software development for mobile platforms have offices in Ukraine, according to the overview presented by Kyivs UNIT.City innovation park and Western NIS Enterprise Fund. Every fifth Fortune 500 company uses Ukrainian IT services, said Max Yakover, UNIT.City CEO. Of the R & D offices, 45% are American companies, followed by EU and Israeli companies. Western NIS CEO Jaroslawa Z. Johnson said: The technology sector is of strategic importance for the Ukrainian economy and can change how Ukraine is perceived in the world during the digital transformation.
                              Backed by a Kyiv R& D center, Israels Verbit has raised $34 million in two rounds. Dedicated to creating transcriptions and subtitles, Verbits two-year-old Kyiv center is staffed by machine learning professionals who work on automatic speech recognition technology.
                              For TransferGo, a London-based money transfer company, Ukraine was its fastest growing market last year. After launching service for Ukraine in 2017, the company recorded 350,000 Ukraine transactions for 70 million, an average of 200 per remittance. Today, the service is used by 110,000 Ukrainians, or 12% of the companys global customer base. Investing in the Ukraine market, TransferGo temporarily suspended commissions for Ukraine transfers last summer and then launched a mobile app in Ukrainian.
                              Frances largest container shipping company, CMA CGM Group, plans to invest 20 million to double the container handling capacity of Odesas Brooklyn-Kiev Port. In a five-year project, capacity would grow to 500,000 standard 20-foot containers a year the equivalent of 60% of all containers handled by Ukraines Black Sea ports last year. The Center for Transportation Strategies quotes Jan Odin, a financial director for CMA CGM, saying: Our company believes in the future of Ukraine. We are interested in increasing the freight traffic through the terminal in the port of Odesa and have the intention to invest in this.
                              Starch from Ukraines massive corn and wheat harvests may soon have a new use: shopping bags. More than 50 Rada members are sponsoring a bill to restrict plastic bags. Under the bill, starting Jan. 1, 2021, stores could no longer give out plastic shopping bags for free and stores could no longer distribute thick plastic bag. ReThink, a Ukrainian NGO, says: The production of starch packages is possible on the existing equipment of Ukrainian bag manufacturersgiven the potential of Ukraine as an agrarian country, we can become the leading producer of biodegradable starch bags in the world.
                              New hotels will have to provide internet in each room, according to design rules to be promulgated by Ukraines Regional Development Ministry. Deputy Minister Lev Partshaladze writes on Facebook: Life without the Internet in the 21st century is impossibletherefore, the hotels also need Internet access.


                              UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow Bureau Chief
                              For comments and story tips, Brooke is reachable at: jbrooke@ubn.news
                              Read More News on www.ubn.news

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                              • UKRAINE BUSINESS NEWS
                                Ukraines IT exports should double by 2025, to $8.5 billion, according to a forecast prepared by App Annie, a multinational data research company. Last year, exports grew by 25% yoy, to $4.5 billion, estimates the report, commissioned by Kyivs UNIT.City innovation park and Western NIS Enterprise Fund. Barely visible a decade ago, IT now is Ukraines fourth largest export after agriculture, labor remittances, and metals. About 70% of the exports are computer outsourcing jobs performed in Ukraine for foreign companies.
                                In a step toward closer integration with the EU gas market, a test export of 5,000 cubic meters of Ukrainian gas has been made to Slovakia, reports the Kyiv Post. In the 1970s, Soviet Ukraine was the largest gas producing region of the Soviet Union. Although the country now imports about one third of its gas needs, new production sharing agreements are designed to jump start stagnant production, returning Ukraine to gas self sufficiency in the 2020s.
                                Londons Geological Society was crowded Tuesday with multinational energy company representatives seeking to learn about Ukraine opening its oil and gas market. The draw was information about 30 onshore oil and gas blocks going up for online auction this year and about production sharing agreements for 12 onshore blocks, covering 21,000 square kilometers. Attending the Ukrainian Gas Exploration & Production Forum were: Shell, ExxonMobil, Croatias INA, Ukraines Arawak Energy, Anglo-French Perenco, Hungarys MOL, Hollands Sand Hill Petroleum, Houstons Viking Energy Group, and New Yorks Trident Acquisitions. The new production sharing agreements will provide the foreign investor with the highest level of investment protection available in Ukraine, said Natalia Boyko, deputy minister for European Integration of Ukraines Energy and Coal Industry Ministry.
                                In a move toward becoming a gas trading hub in the 2020s, tariffs on entry into Ukraines gas transportation system were halved on Jan. 1, to $6.28 per thousand cubic meters per day. Western Ukraine has the largest underground gas storage caverns in Eastern Europe.
                                Food exports increased by 5% last year, to a record $18.8 billion, reports the Agrarian Policy and Food Ministry. In volume terms, Ukraines farm production rose by 7.8%. For exports, the top three categories were: crops -- 38%; oils 23%; and oilseeds 10%. The top five buyers were: India -- $1.8 billion; China -- $1.2 billion; the Netherlands -- $1.2 billion; Spain -- $1 billion; and Egypt -- $890 million.
                                Grain moving by trucks increased by 12% last year, the Center for Transportation Strategies reports drawing on data from Zernovoz, the online logistics platform. A bumper grain harvest, a shortage of working locomotives, increased diesel prices, and a highway police crackdown on overweight trucks added up to high freight costs in the peak September-November period.
                                With last years 70 million ton bumper harvest overflowing silos, the government plans to spend $30 million this year to subsidize construction of 2 million tons of additional storage. In a first step, Grain Alliance, a large farming company in central Ukraine, intends to increase its elevator capacity by 40%, adding 100,000 tons, the company tells Interfax-Ukraine. Ukrzaliznytsia says it lost $18 million last year due to elevators not working on weekends.
                                Container rail cargo increased by 13% last year, to 334,963 units. After Ukrzaliznytsya started container trains from Odesa last year, Yevgen Kravtsov, chairman of the state railroad, says: The container transportation market in Ukraine has tremendous opportunities, and our primary task is to create new services for our clients and partner to realize these opportunities. Each container on a rail car means one less truck trip on the roads.
                                Testing of electric locomotives from Frances Alstom and Chinas CRRC will start in coming weeks, Infrastructure Minister Volodymyr Omelyan tells Delo news site. Last fall, Ukrzaliznytsya started receiving diesel locomotives from a General Electric plant in Pennsylvania. In addition to performance, price and durability, the state railroad will look for supplier financing. Financing will be external - there really is no money inside the company," Anton Sabolevsky, UZs director for strategic development, tells the Center for Transportation Studies.
                                Pumping cooking oil like fuel oil, the new oilseed processing complex of Allseeds Group proved capable this month of loading ships with sunflower oil at 750 tons an hour. At Yuzhne port, Allseeds loaded two tankers, the Arionas and the Maersk Trenton, with 35,000 tons of sunflower oil each. With Ukraine the worlds largest sunflower oil exporter, Yuzhnes goal is to become a Black Sea hub for vegetable oil.
                                Recovering from a 2014 slump, port dredging doubled last year by the Seaports Administrations Delta-Pilot branch. One third of the 1.3 million cubic meters of silt was dredged from Mariupol and Berdyansk, Ukraines two major ports on the Sea of Azov. In recent months, ship visits at both ports are down due to Russias policy of detaining Ukraine-bound vessels for inspections.
                                Ukraines cross-Black Sea trade with Turkey increased last year by 11%, tweets Andriy Sibig, Ukraines Ambassador to Turkey. Negotiations for a bilateral free trade pact are 95% complete, Ukraines government says.
                                Swiss-based gas station chain Avia Association is expanding east, opening Avia stations this year in Ukraine. Polands Unimot, owner of the license for Ukraine, will work here with the Wexler Group.
                                Minsk Airport, which has grown through sanctions busting, declines to say how many of its passengers travel between Ukraine and Russia, reports the Center for Transportation Strategies. In October, 2015, Russia and Ukraine ended direct flights. Since then, over all traffic at Minsk Airport has grown by one third, to 4.5 million last year. The airport declined to tell the Center how many passengers fly to Minsk on the new direct flights from Lviv, Kharkiv, Odesa and Kyivs two airports. It does say that half of its passengers fly to Moscow and that Kyiv is the airports second busiest destination.
                                Tourist visitors to Kyiv increased by 20% last year, to 4.9 million, Andrei Strannikov, head of the city tourism commission, tells the City Council, basing his numbers on tourism tax receipts. Of the recorded tourists, 1.9 million were foreigners and 3 million were Ukrainians. This spring and summer, foreign tourism is expected to further increase with the expansion of discount airlines flying from the EU to Kyiv.
                                For comments and story tips, Brooke is reachable at: jbrooke@ubn.news
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