No announcement yet.

Extracts from Ukraine Business Journal

  • Filter
  • Time
  • Show
Clear All
new posts

    DTEK Renewables is starting work on a 200, 240MW solar polar plant near Nikopol, only a few kilometers from a site where the company inaugurated a 200 MW solar station last month. Construction this summer is to create 1,000 jobs.
    The new solar station is part of a plan by Rinat Akhmetovs DTEK to invest 1 billion in renewables in Ukraine by the end of this year. Already Ukraines largest wind power producer, DTEK is building an additional 300 MW of wind power generating capacity at two sites on the coast of the Sea of Azov. To get Ukraines high feed in tariffs, renewable projects have to be commissioned by Dec. 31.
    Philipp Leckebusch, DTEK Renewables new CEO, signed a contract with Siemens to build the new solar plant on the site of a former manganese mine, in Pokrov, Dnipropetrovsk. Leckebusch flew to China, to sign a contract with Risen Energy Co. for supply of 874,000 solar modules, or panels. Hailing the deal, Zhao Zelin, Risens vice president for sales, said: Risen Energy plans to continuously drive the transformation of the Ukrainian energy market. Leckebusch, a German, said the new plant, called Pokrovskaya, will produce enough power for 200,000 households.
    Canadas Black Iron Inc has signed a memorandum of understanding with Glencore, the Anglo-Swiss mining giant, to finance and develop Shymanivske iron ore deposite in Dnipropetrovsk. One of the worlds largest iron deposits, Shymanivske has an estimated 833 million tons of reserves, with ore grading at 32% iron. The nonbinding memorandum contemplates Glencore funding all or part of construction in return for iron. A first phase envisages $436 million investment to produce 4 million tons of iron a year. Black Irons CEO Matt Simpson says: I am pleased to welcome Glencore as an external investor for the construction of the Shimanivske project, as well as their agreement to work with us to provide additional funding.
    After Wednesdays announcement, the Canadian juniors shares jumped on the Toronto Stock Exchange by over 35%, prompting news site to headline: Black Iron's shares skyrocket after inking MOU with Glencore on Ukraine iron ore project. In Kyiv, Concorde Capitals Dmytro Khoroshun writes: If the Shymanivske project is realized, even after many years of uncertainties, it would be positive for Ukraines investment image, especially if one of the equity partners is Glencore. Nevertheless, we are cautious because one of the main reasons for the long uncertainty with Shymanivske was the situation on the iron ore market, and the iron ore price volatility is unlikely to go away.
    Washington sees Poland as a future hub for re-export of American liquefied natural gas to Ukraine and Eastern Europe, Georgette Mosbacher, US Ambassador to Poland, told a conference in Warsaw on LNG and the countries of the EUs Eastern Partnership. She said next year the US will export 120 billion cubic meters a year, about 30% of world LNG. Poland is expanding its three-year-old LNG terminal at winoujcie, on the German-Polish border. In four years, Poland plans to stop importing gas from Russia. Referring to Polands plan to become a regional gas hub, Mosbacher said: I support this fantastic initiative of Poland and Ukraine.
    In the Russia-controlled sections of Donetsk and Luhansk, 27% of the Donbas industrial potential has been illegally moved to Russia, including the equipment of 33 local industrial giants, President Poroshenko said Wednesday at a speech at the United Nations General Assembly. He said that over the last five years UN agencies have spent $460 million to alleviate the human impact. But the control line area according to the UN, has already become the most mine-contaminated stretches of land in the world.
    Ukraines food exports to the United Arab Emirates hit almost $200 million last year, Olha Trofimtseva, Acting Agrarian Policy and Food Minister, said in Dubai at the Gulfood exhibition. The number of Ukrainian companies participating in the fair more than doubled this year, to 69, she tells Ukrinform. Ukraine largely exports sunflower oil, milk, honey, and eggs to the UAE. With a population of 9.5 million people and a per capita income of $42,000, the Emirates import almost all their food. After signing an agricultural cooperation deal, Trofimtseva said: Ukraine intends to become a strategic partner of the UAE to ensure food security of this country."
    Next month, Ukraine will mount a pavilion for the first time at Asias leading food exhibition, FOODEX Japan, in Tokyo. The pavilion will display products of 13 manufacturers, reports Ukraines Agrarian Policy ministry.
    In the last five years, the volume trade handled by Mariupol port dropped by almost two thirds, to 5.3 million tons. The number of countries receiving cargo from the Sea of Azov port dropped by more than half, to 24, reports the Center for Transportation Strategies. Metals accounted for 90% of last years exports, going to 21 nations. On the import side, the biggest shipper was the United States, sending coal, followed by Turkey. Because Russia built the Kerch Strait bridge too low, Port Director Oleksandr Oleinik says, Mariupol lost an annual contract to ship 1 million tons of pig iron to the US and to ship up to 500,000 tons to Southeast Asia.
    EuroMoney Magazine speculates in a lengthy article about PrivatBank and Ukraines presidential elections that Ihor Kolomoiskyis post-election strategy might not be to retake control of the bank, but to have the government stop suing him to recover bank assets. They couldnt give Privat back to him, author Lucy Fitzgeorge-Parker quotes a senior banker saying. There would be an international outcry. It would be tantamount to branding Ukraine as a rogue state.
    PrivatBank had to be nationalized in Dec. 2016, because it was insolvent, Kateryna Rozhkova, first deputy chairman of the National Bank of Ukraine, tells Novoe Vremya. It was impossible to shut down, because then we would have crippled the entire financial system of the country, she said. Since the government takeover, the central bank has won 22 lawsuits, stipulating the return of $43 million in mortgaged property. After the government intervention, a forensic audit by concluded that PrivatBank was subjected to a large scale and coordinated fraud over at least a 10-year period ending December 2016, which resulted in the Bank suffering a loss of at least USD 5.5 billion. The report stated that 95% of corporate lending had been to bank shareholders.
    For comments and story tips, Brooke is reachable at:
    Read More News on


      Kyiv office rents will rise for the next two years, until a huge amount new [office] projects open in 2020-2021, Ihor Zabolotsky, a commercial real estate analyst for Colliers International (Ukraine), said at Kyivs recent Open Mind conference. Making up for the post 2014 slump, developers plans to commission 406,000 square meters in 2020-2021 -- about two thirds more than the pre-2013 annual rate of 140,000 square meters. With office vacancies hitting 5%, IT companies are driving almost half of the new space demand.
      DTEK Academy has become a major tenant of Kyivs UNIT.City, occupying two floors, or 12,000 square meters, of the six story main building. DTEK moved six kilometers from their old office in the Eurasia Business Center on Zhilyanska Street to work with start ups and to focus training on innovation and digitalization. Max Yakover, CEO of UNIT.City, says the Academy plans a four fold increase of students nationwide, from 30,000 this year to 120,000 in the 2020s.
      Real estate purchase transactions increased last year by 8% y-o-y, to 277,230, reports real estate portal Drawing on statistics from public and private notaries, the news site reported that the two two regions were: Kyiv 35,000; and Dnipropetrovsk 28,500.
      Kyiv risks seeing Dead Malls this year, NAI Ukraine, the consulting company, writes in a new report on the citys shopping mall scene. After 101,500 square meters in retail space opened last year, an additional 400,000 square meters are to open this year. NAI writes: "Such a large number of offers on the market may lead to the appearance of "Dead Malls" - empty, uninteresting for buyers and tenants of the mall. The concept that is common in America may appear in Kyiv due to the fact that such a large number of offers is not needed by the consumer.
      In a Kyiv poll, NAI found that more than half of respondents like to visit a mall every weekend. About 30% go to malls on weekdays. The average cost per visit is: food court -- $5.20; restaurant - $22; jeans - $26; and shoes - $48. Mall goers are 54% women and 46% men.
      Britains Marks & Spencer reopened in Kharkiv two weeks ago, returning to a market it abandoned during the 2014-2015 crisis. With the 500 square meter store in Kharkivs French Boulevard shopping center, the chain now has nine stores in Ukraine five in Kyiv and one each in Dnipro, Kharkiv, Lviv and Odesa, and Lviv.
      Cashless purchases using bank cards jumped by 55% last year, hitting $48 billion. The number of transactions rose by one third, to 3.1 billion, reports the National Bank of Ukraine. The portion of all non-cash transactions made with cards hit 45%. As Ukraine increasingly goes cashless, the number of point of sale terminals rose by 20% last year, hitting 279,000.
      As contactless also becomes popular, the number of contactless cards jumped last year by 44%, to 4 million. Today almost 80% of point of sale terminals allow contactless transactions. Starting April 12, Mastercard increases the limit of contactless payments on cards without a PIN code to UAH 500, or $18.50, up from the current level of UAH100. Mastercard accounts for 70% of purchases by card in Ukraine.
      Ukraines average monthly wage, as measured in dollars, has doubled in three years, to $380,Prime Minister Groysman said. The minimum wage, received by a minority of workers, has tripled, from $50 in 2016 to $150 today. He said: The current size is not big, but we are moving forward.
      Less than one year after Beskidy railway tunnel opened, the tunnel through the Carpathians is carrying 60% of Ukraines exports to the EU, President Poroshenko said on a visit to Lviv. Opened in May, the double track, Lviv-Zakarpattia tunnel can carry 100 trains a day. Hailing the Lviv locomotive, he said that Lvivs exports to the EU jumped by 22% last year. Last year, 79% of Lvivs exports went to the EU, almost double the national average of 43%
      Ukrainian loggers last year cut 22 million cubic meters, or about 1% of the national forest,reports Volodymyr Bondar, deputy head of Forest Resources Agency. Forest growth is about 1.5% a year, or 33 million cubic meters. The Agency controls 73% of Ukraines 10.4 million hectares, or 15.9% of the nation. Due to an Electronic Wood Accounting System, Bondar says that illegal logging has been reduced to 17,700 cubic meters.
      Wood exports dropped 40% y-o-y to only 527,000 cubic meters, a tiny portion of the national cut.The EU is pressuring Ukraine to export more wood to feed its wood products industries. Ukraine restricts exports of raw logs in an attempt to rebuild the furniture and milling industries at home.
      ProZorro, the electronic procurement system, has saved almost $2.8 billion since its introduction four years ago, reports the Economic Development and Trade Ministry. About 215,000 companies, 80% of them small businesses, have used the platform, the ministry reports Facebook. Mandatory for most government procurements since 2016, the system posts information on tenders and conducts competitive bidding sales. Foreign companies are eligible to participate.
      Ukraine wants to sell to Egypt an upgrade of its anti-aircraft missile defense systems. Pavlo Bukin, head of UkrOboronProm, agreed at a defense show in Abu Dhabi, to provide proposals for the modernization of anti-aircraft missile systems and other air defense systems used by the Egyptian Armed Forces. Bukin met at IDEX 2019 with Hassan Ahmed Abdel-Mageed, director of Egypts Ministry of Military Production.
      Faced with Russias ban on sale of locomotive engines to Ukraine, ArcelorMittal Kryviy Rih is solving the problem by pulling out old Russian engines and replacing them with new American-made Cummins diesel engines, reports the Center for Transportation Technologies. Arcelor, Ukraine's largest integrated steel company, is upgrading five locomotives this way, buying the endings from Comtek, the representative of Cummins in Ukraine. Arcelor, which has 125 locomotives, plans to open a tender soon to repair five more.
      Tourists visiting Ukraine by plane rather than train jumped last year, according to the Border Service. As a result of this higher spending influx, tax money generated by tourism rose by 21% last year to $155 million, reports the Economic Development and Trade Ministry. EU growth champions were: Spain + 68%; Great Britain + 47%; Lithuania + 23%; Italy + 15%; Germany + 13%; and France + 9%. From the rest of the world, growth countries were: India + by 57%; China + 39%; Japan +38%; Israel + 22%; and the US +19%. Entries by citizens of border countries declined.
      For comments and story tips, Brooke is reachable at:
      Read More News on


        A $500 million windfall in duty payments on illegally imported cars will help fund an election month bonus for the nations 10 million pensioners.
        On Friday night, a 90-day window closed for 50% duty discounts on cars illegally imported from the EU. Instead of a forecast $37 million in duties, owners of 218,000 cars paid the hryvnia equivalent of half a billion dollars. The State Fiscal Service says the top paying areas were Kyiv and the four westernmost regions: Volyn, Lviv, Zakarpattia and Chernivtsi. Owners of cars in violation now have until May 23 to pay the full duty. After that, they face a $6,000 fine. The Finance Ministry suggests remaining violators drive their cars back to the EU, or sell them here for parts.
        The $500 million windfall, Social Policy Minister Andrei Reva announced Monday, will be channeled to the nations 1.9 million pensioners who receive the smallest pensions. Before the March 31 presidential election, each is to receive a $90 bonus. The remaining $339 million will help fund across board pension hikes to be received by all 10 million pensioners, also in early March.
        President Poroshenko responded hotly to critics who call this cash infusion to elderly voters a bribe. Yes, we will, over the next five years, as part of our fight against poverty, bribe pensioners, increase their pensions, for working people, increase their wages, for large families, increase their benefits - this is our strategy to fight poverty, he said Monday at a televised meeting of the Pension Fund.
        Chickens to Ghana, eggs to Singapore, milk to Macedonia, and sheep to the Emirates these are some of the 85 new markets developed last year for Ukraines food exports. Last year, our country expanded the geography of our products exports and the number of enterprises that received the right to export food of animal origin increased as well," said Volodymyr Lapa, Head of Ukraines Food Safety and Consumer Protection agency. This allowed to level the economic impact of the loss of the market of the Russian Federation and contributed to raising the level of Ukraine as reliable trading partner. Last year, Ukraines food exports to the EU grew by 8.7% y-o-y to $6.3 billion.
        Ukraines grain exports should be up 23% this marketing year over 2017-2018 levels, Elena Kovaleva, deputy minister of Agrarian Policy and Food, said Monday in Geneva at the annual meeting of the Rapid Response Forum of the Agricultural Marketing Information System. Encompassing producing and consuming countries of corn, rice, soybeans and wheat, the forum promotes policy coordination for a food crises. Ukraine remains a stable, reliable partner and exporter of agricultural products, Kovaleva said. Raising her ministrys forecast by 4%, she said: In this marketing year, we expect that grain exports from Ukraine will reach 49 million tons.
        Ukrainian wheat exporters could see an opening this year in Indonesia, the northern neighbor of Australia, reports UkrAgroConsult. During the last half of 2018, Australia, Indonesias traditional source, saw its wheat exports drop by 41% y-o-y. Due to a drought, Australias wheat harvest may be down 20% in the marketing year ending in June. The latest forecast is 17 million tons, the lowest in a decade.
        Corteva Agriscience, the agricultural division of DowDuPont Inc., has achieved a 21% market share of Ukraines corn seed market and 16% of its sunflower seed market, says Serhiy Kharin, head of Cortevas Eastern Europe division. He cited a survey of Ukrainian farmers conducted last year for the Kleffman Group, a Germany-based agricultural market research company. Over the last five years, Corteva has invested heavily in its Ukraine production comple , attaining full capacity in 2017: 500,000 corn seeds per year, and 250,000 sunflower seeds per year.
        In a step toward food processing, Mover Mill LLC has opened a $4 million mill capable of producing 350 tons of flour, semolina or bran a day. The mill is located in the village of Kryvi Kolina, Cherkasy region, 250 km south of Kyiv. Despite the governments push to add value to agricultural exports through processing, exports of Ukrainian flour were down 54% July-November, compared to the same period in 2017. According to UkrAgroConsult, Ukraine exported 94,300 tons of flour during that period, the lowest in five years.
        Individual entrepreneurs, a low-tax status enjoyed by about 130,000 Ukrainian IT workers is threatened by a draft law prepared by the Social Policy ministry, according to a report by OpenDataBot. Since 2015, the number of IT individual entrepreneurs increased by 45%. They generally pay a 5% income tax rate, a rate credited with cutting Ukraines IT brain drain to the EU. This years elections may decide the future of this low tax rate.
        High speed internet should be provided across Ukraine, wherever there is electricity, President Poroshenko said in Lviv. Campaigning for a second, five-year term, he said: The internet over the next five years should be everywhere where there is electricity. Broadband in every village...How will we train IT specialists if there is no internet in rural areas?" In Lviv, IT companies are growing so fast they recruit software engineers from Belarus and Moldova.
        Chinese investors plan to work with Ukraines government in a $100 million plan to develop Motor Sich air engine factory and its design affiliate, Ivchenko-Progress, both in Zaporizhia, reports, citing Yuriy Brovchenko, deputy minister of Economic Development and Trade. Last September, citing national security concerns, the State Security Service, or SBU, blocked a $100 million bid by Beijings Skyrizon Aviation to take a controlling state in Motor Sich. In a move opposed by the US and Japan, China wants to learn how to make Motor Sich turbo fan engines for its own military helicopter, cargo and trainer aircraft. Anatoly Malysh, head of the Motor Sich Supervisory Board, later told Interfax-Ukraine that he does not know of any state investment plans.
        Dragon Capital writes: Confirmation of a budget to finance the company and a firm statement by a government official about joint investment with the Chinese could mean that legal pressure on Motor Sich from [Ukrainian] state authorities may ease soon.
        For comments and story tips, Brooke is reachable at:
        Read More News on


          A 90-day clock has started running for energy companies to bid on nine oil and gas blocks put up for tender under 50-year production sharing agreements. By May 25, bids should be made to Ukraines Interagency Commission accompanied by a non-refundable bid fee of $11,100. Tenders require minimum commitments to invest $16-35 million during a five-year exploration period. The production sharing agreements also stipulate percentages of produced oil and gas to be handed over to the state.
          Concern is mounting that green energy auction bill is stuck in the Rada, threatening new investments in Ukraines booming renewable energy sector.
          The law should be be adopted before the elections -- because otherwise we will lose at least six months, Torsten Wllert, energy director for the European Commissions Ukraine Support Group, told the Ukrainian Energy Forum in Kyiv on Tuesday. As approved Dec. 20 on first reading, the bill provides for moving next Jan. 1 to competitive auctions for most solar and wind projects. Noting that Ukraine can benefit from the experiences of other European countries, Wllert said: I very much hope that Ukraine will have a very advanced law.
          The EBRD, the largest lender to Ukraine, will resume lending for solar and wind projects only after the Rada passes the green energy auction bill, Olga Yeromina, EBRD Ukraines senior banker for electricity, said Tuesday at a Rada energy conference. As reported by ExPro Consulting, she said: As soon as the law introducing the new renewable energy support system through the mechanism of auctions is adopted, we will be ready to actively start the preparation of new framework financing for the continued support of projects in the field of renewable energy." She said the EBRD hopes the bill will be approved by the Rada and signed by President Poroshenko in coming weeks.
          Deputies under the control of energy oligarchs are sabotaging the auction bill by submitting extraneous amendments and blocking Rada consideration, Yuriy Chyzhmar, a Radical Party deputy tells UNIAN. The news agency reports: A number of People's Deputies are blocking the approval and approval of amendments, so the fate of the bill being submitted to the session hall remains unknown.
          Auctions are designed to lower Ukraines green tariffs, among the worlds highest. Last year renewable power sources provided 2% of the nations electricity, but accounted for 8% of the nations power bill, according to Olga Buslavets, director of energy markets for the Energy and Coal Industry Ministry. Reviewing solar and wind projects under way, she predicted at a Kyiv round table that the nations installed renewable energy capacity will increase by 50% this year, to three gigawatts. In Ukraines electricity pie, nuclear supplies 53%, coal, gas and oil power plant supply 37%, and largely scale hydro dams 7%.
          Worldwide investments in renewable energy hit $332 billion last year, the fifth year in a row the figure was over $300 billion, reports Bloomberg. Solar energy investment dropped by 24%, to $131 billion. Technological improvements cut the average cost of installing 1MW of solar capacity by 12%. Investment in wind energy increased by 3% to $129 billion. Investment in biomass and waste-to-energy increased by 18% to $6.3 billion.
          Bloomberg calculates that Ukraine attracted $2.4 billion in renewable projects last year. China remained the world leader investing $100 billion. But this was one third below 2017 due to a cut in the number of new solar projects. The US came in second, with $64 billion, 12% more than in 2017. In the EU, investment jumped by 27%, to $74.5 billion, largely due to five massive offshore wind projectsand a big expansion of solar in Spain.
          With office space tight and tourism rising, the Rada rejected a bill that would restrict the use of apartment buildings to private residences. While office vacancies have fallen to 5%, Kyiv has an estimated 70,000 unsold apartments. Similarly, the arrival this spring of discount airlines from Europe Ernest, Ryanair and Wizz Air demand for hostels and two-star lodgings are expected to increase sharply.
          Warehouse vacancies fell to 2.8%, pushing rents up last year by 20-25% in dollar terms, Property Times reports in a lengthy analysis of the warehouse sector, largely in Kyiv. Rents are to increase more this year as only two projects, with a total of 31,000 square meters, are to be commissioned this year. In face of the space shortage, many companies are responding with build to suit premises that do not go on the open market. Over the next three years, developers have announced projects totaling 190,000 square meters. But, Property Times reports, several developers are waiting to learn the outcome of the presidential elections before starting construction.
          Uzhgorod will regain flights to Kyiv on March 15, Valerii Lunchenko, a Rada member from Zakarpattia, tells Almost three year ago, Ukraines westernmost airport lost air service, leaving Kyiv-bound residents with a stark choice: 10 hours by car, or 12-14 hours by train. The 627 km flight will be the nations longest domestic flight, probably taking one hour.
          Foreign investors propose expanding Uzhgorod airport into a Slovak-Ukrainian enterprise, with a free trade area and bonded warehouses for cargo on both sides of the international border, Eduard Maliar, infrastructure director of the Zakarpattia regional administration, writes on Facebook. To handle cargo planes from Asia, the runway would be extended 1,500 meters into Slovakia. After studying the airport, he writes, investors propose building terminals both in Ukraine and Slovak territory that will serve both passenger and freight transport, including transportation of goods from China and South Korea to Europe."
          To better connect Slovakia and Zakarpattia, test passenger trains are to start in April on the standard gauge track between Koice, Slovakias second largest city, and Mukachevo, Zakapattias rail hub. With Slovakias ZSSK trains plying the 175 km route in four hours, service is start in June, in time for the summer tourism season. The new route will make this region more attractive for tourists, Arpd rsek, Slovakias Transport and Regional Development Minister, said after meeting with his Ukrainian counterpart, Volodymyr Omelyan.
          Reflecting pent up demand for this east-west connection, two Czech private rail companies, Leo Express and RegioJet, recently started bus service between Mukachevo and Koice, the eastern rail terminus for both rail companies. Separately, in December, Hungarian Railways and Ukrzaliznytsia launched daily direct Mukachevo-Budapest trains. They use standard gauge tracks first laid in Zakarpattia during the Austro-Hungarian empire.
          The average daily price for a hotel room in Kyiv hit 89 euros last year, 6.3% increase over 2017,according to a report by STR Global, an American company that tracks hotel supply and demand. Kyivs occupancy rate inched up 3%, to 52.5% -- well below the EU average of 72.4%.
          Read More News on


            To attract foreign investment into oil and gas exploration and production, the State Geology Service is doubling the number of blocks prepared for electronic auction by June. More than 30 oil and gas sites are to be auctioned, Oleg Kirilyuk, head of the service, told the Cabinet of Ministers on Wednesday. The current schedule for auctions is: March 6 -- 10 fields; April 29 7 fields. The Geology Service says these 17 sites have projected resources of 92 billion cubic meters of gas and 16 million tons of oil.
            The oil and gas auctions are designed to attract the maximum quantity of not only Ukrainian companies but also foreign companies to the market, said Ostap Semerak, Minister of Ecology and Natural Resources, the Ministry that controls the Geology Service. Ukrinform reports Semerak told the Cabinet of Ministers on Wednesday: I am convinced that the Service will show a good result, because the new conditions are very liberal and comfortable. I want this to be a new impetus for the Ukrainian economy.
            President Poroshenko pushed a button starting a GE wind turbine Wednesday, but did not publicly talk about the fate of the green energy auction bill in the Rada. The new energy industry is one of the most important, primary issues for moving our state forward, the President said. Hailing the Primorsk project by DTEK Renewables to build 52 towers with 3.8 MW turbines on Zaporizhias Azov coast, the President said: It is through such projects that we turn Ukraine into a regional leader. Back in Kyiv, 700 km to the north, analysts noted that the President did not use the press event to throw his weight in the Rada behind passage of the auctions bill, a step designed to unlock more wind and solar investment.
            German commercial banks will loan 90 million for construction of the second phase of the Primorsk Wind Power Plant, Philipp Leckebusch, DTEK Renewables CEO, said at the inauguration. This project is financed by two loans of German commercial banks for a total of EUR180 million, he said. This will be one of the largest commercial loans in Ukraine in recent years. Expected to cost 300 million in total, the plant is to have the capacity to generate 200 MW.
            Almost 900 MW in wind power projects are under construction in Ukraine today, says Andriy Konechenkov, chairman of the Ukrainian Wind Energy Association. Of these about 300 MW will be commissioned this year, he predicts. The projects are largely in southern Ukraine, along the coasts of the Black and Azov seas, where winds are the strongest. Last year, 68 MW of wind power capacity was commissioned.
            If Ukraine does not move from Europes highest green tariffs to an auction system, consumers will pay $1.5 billion a year for renewable energy by 2021, warns Olha Buslavets, director of energy markets for the Ministry of Energy and Coal Industry. This sum is equal to what consumers paid last year for electricity generated by nuclear power plants, source of 56% Ukraines power, she said in a press statement on Wednesday.
            DTEK Naftogaz, one of the nations largest private gas producers, plans to nearly double natural gas production to 3 billion cubic meters by 2024, Igor Shchurov, the companys general director, said Wednesday at the Ukrainian Energy Forum in Kyiv. Praising regulatory changes and cuts in royalties, Shchurov said the company plans to double investment, to $110 million, and to increase drilling depths, possibly to below 7 km. Responsible for about one third of Ukraines privately produced gas, DTEK Naftogaz produced 1.65 billion cubic meters last year, the same amount as in 2017.
            Russias plan to bypass Ukraine to supply gas to southeast Europe is advancing. Russian ppe maker TMK plans to bid on a Bulgartransgaz tender to build a pipeline north from Turkey, Reuters reports from Moscow. Last November, work was completed on the 1,090 km TurkStream pipeline, which runs from Anapa, Russia, to Kyky, a Black Sea town in Turkeys European section. Now Russias Gazprom must choose from two possible routes for TurkStream: via Bulgaria, 50 km to the north, or through Greece, 150 km east. Next week, Russias Prime Minister Dmitry Medvedev flies to Sofia to sign energy documents.
            Ukraine exported half a billion dollars worth of chicken meat last year four times the combined total of beef, pork and sausage exports. According to the Food Export Council, meat exports were: chicken -- $507 million, 326,000 tons; beef $125 million, 42,000 tons; pork -- $3.7 million, 1,700 tons; and sausages 439 tons , $1.3 million.
            Ukraine is expected to displace Russia this year as the largest Black Sea grain exporter. Russia is to export 42 million tons this year, 20% below last years record 52.4 million tons. By contrast, Ukraine is to export 49 million tons in the year that ends in June. Kommersant reports from Moscow that Russian Agriculture Ministry officials are calling exporters asking them to slow sales. Concerned about meeting domestic demand, Rosselkhoznadzor, the state food safety agency, is in go slow mode. stretching quality checks at ports from one day to five days or more. Yulia Melano, a food safety agency representative, is quoted saying longer checks respond to quality complaints from Indonesia, Vietnam and African countries.
            Ukraines central bank has completed a pilot project on a blockchain-based e-hrynia. We are not talking about cryptocurrency, we are talking about digital currency of the central bank, says Alexander Yablunivsky, director of payment systems at the National Bank of Ukraine. Ruling out the e-hryvnia becoming a crypto currency, a central bank must have more control over its issued currency than crypto currencys immutable ledgers offer.
            Ukraine should allow dual citizenship, partly to inject new talent into the country, Foreign Minister Pavlo Klimkin told UNIAN In Odesa on Wednesday. [Imagine] how many great professionals could come from other countries to help us with reforms, he said. However, he cautions, dual citizenship with Russians, will be discussed only after they return Donbas and Crimea back to us.
            This summer, a 2,000 square meter shopping and entertainment center will open 50 meters from the southern exit of Kyivs Central Rail Station, reports Informator news site. With about 100,000 people passing through the Southern Station a day, the exit area already has a KFC, a Papa John Pizza and a Puzzata Hata. According to Colliers International, the new center will offer stores and two restaurants with summer verandas on the roof. Ukrzaliznytsia is drawing up plans to privatize management of the commercial spaces inside the Central Station, which opened in 1932.
            For comments and story tips, Brooke is reachable at:
            Read More News on


              Israeli-Ukrainian City Capital Group plans to invest more than $50 million over the next four years to convert old industrial spaces in Kyiv into offices. The office real estate market is coming to life, Maria Kazantseva, a CCG board member, tells Interfax-Ukraine. All experts predict an increase in the demand in this segment. IT companies are declaring a shortage of quality space. Founded a decade ago by Israeli businessman Ofer Kerzner, CCG manages Platforma Art Factory, on the left bank, near Lisova metro station.
              Degraded industrial land around the shipyard on Kyivs Rybalski peninsula will be transformed into a residential complex, a shopping center and offices, Sergey Tigipko, the new owner, tells Novoe Vremya magazine. We are planning to start a large-scale construction project in the near future, Tigipko says. Most likely, it will be a residential area - with schools, kindergartens, commercial real estate. As for the 9-hectare site near the railway station, we are planning to build a large shopping and office center. Adjacent to the Obolon commuter rail station, the peninsula also offers views of the Dnipro River. Tigipko promised to keep open the shipyard, a fabricator of assault boats for Ukraines Navy.
              Kernel, one of the nations largest farming groups, saw its net profit jump 83% to $164 million in the last half of 2018, compared to the same period in 2017. In Kernels fiscal year, ending next June, the company plans to process 3.1 million tons of sunflower seeds and and export 6 million tons of grain. Concorde Capitals Andriy Perederey writes that the results were higher than our estimates due to due to stronger sunflower oil segment EBITDA and better results in silo storage and farming.
              President Poroshenko has proposed fresh legislation to fight corruption, a day after the Constitutional Court threw out an illicit enrichment law. The original law was passed in 2015 as a condition of receiving bailout loans from the IMF and for the EU to grant visa-free travel to Ukrainians. Although no one was ever charged under the old law, the National Anti-Corruption Bureau was investigating 65 officials on suspicion of stealing a total of $20 million.
              Concorde Capitals Zenon Zawada writes: In one fell swoop, the Constitutional Court rescued dozens of high-ranking officials from corruption investigations and possible prosecutions under a new president.
              Timothy Ash writes from London: This is a disaster in terms of future of anti corruption effort and raises a huge question mark about future cooperation with the IMF.
              Dragon Capital writes: It is not clear if this ruling has any immediate implications for Ukraines ongoing aid programs with the IMF and the EU, but it is obviously not passing unnoticed and, if not rectified, may at least entail stricter lending conditionality going forward.
              Volodomyr Zelenskiy, the frontrunner in presidential opinion polls, tells Reuters that he would keep Ukraine in compliance with its IMF program, saying he would not allow Ukraine to default and spoil the image of our country. Asked if he would return PrivatBank to Ihor Kolomoisky, owner of the TV channel that has hosted his comedy shows for the last decade, Zelenskiy responded: Am I that crazy? Do I want to lose my life, reputation?
              Ukraine imported from Russia 61% percent of its nuclear power plant fuel last year -- and only 39% from Westinghouses plant in Sweden. Given that half Ukraines electricity comes from nuclear power plants, critics call continued reliance on nuclear fuel from Russia a major national security risk. One year ago, Igor Nasalyk, Ukraines Minister of Energy and Coal Industry, promised that Russian fuel imports would fall in 2018 to 45% of Ukraines needs. Instead, the year end figures were: Russia -- 335.2 tons of fuel for $374 million; Sweden 211 tons of fuel for $148.5 million. Critics find it curious that Ukraine paid 59% more per ton for fuel from Russia than from Sweden. Last November, Westinghouse repeated its offer to supply 100% of Ukraines needs.
              The expected end on July 1 of the Intermediate-Range Nuclear Forces Treaty could prompt Kyiv to task the Yuzhnoye Design Bureau with making conventional warhead missiles capable of hitting military targets in Russia, Mariana Budjeryn, a disarmament expert, writes in a speculative piece in The Washington Post headlined: Without the INF Treaty, Europe could see a new missile power. (Spoiler: Its not Russia.) Referring to Dnipro as Ukraines missile capital, she writes: The Yuzhnoye facility, which survives by engaging in international space projects, would probably be more than willing to resume its missile-related work. During the Soviet era, Yuzhnoye was a key designer and producer of ICBMs, intercontinental ballistic missiles that ultimately were aimed at the United States.
              SkyUp Airlines, preparing for a major expansion this spring, will move its base on March 31 from Kyiv Sikorsky to Kyiv Boryspil. The Ukrainian discount airline will join Ryanair at Boryspils newly reopened Terminal F. Evgeny Khaynatsky, the airline CEO, said Kyiv Sikorsky works with our heavy aircraft at the limit of its capabilities. SkyUps all-Boeing 737 fleet is double over the next five years to 12. Between April 24 and June 15, SkyUp plans to launch 17 new destinations, for scheduled and charter service.
              Boryspil has two runways one 3,500 meters long, and the other 4,000 meters. Sikorsky has one 2,310 meter long runway. Surrounded by apartment buildings in the Zhuliany neighborhood, the airport has no for expansion. Last fall, flydubai moved from Sikorsky to Boryspil. Wizz has talked with Boryspil officials about moving from Sikorsky.
              Motor Sich, Ukraines all-Antonov airline, expands its flight network this spring. On March 15, it starts flights between Kyiv and Uzhgorod. On March 31, it increases to daily its flight frequencies between its Zaporizhia base and Minsk. On June 6, it starts flights between Zaporozhia and Burgas, Bulgarias Black Sea resort city. Ukraines fifth largest minority, 200,000 Bulgarians live in southern Ukraine, largely in Odesa and Zaporizhia. Bulgaria Air flies from Odesa to Sofia.
              Concrete paving of Odesas 2,800-meter new runway restarts in two weeks, weather permitting, reports the contractor, Highway-South. Work should be completed by this fall. Replacement of the Soviet-era concrete block landing strip is a key condition for Ryanair, Wizz Air and other discount airlines to fly to Odesa.
              For comments and story tips, Brooke is reachable at:
              Read More News on


                Frances Alstom is prepared to supply 500 train locomotives to Ukraine, Henri Poupart-Lafarge, the company CEO tells the Center for Transportation Strategies. Alstom is proposing to Ukrzalinystia a package that would include French technology, French financing and a degree of Ukrainian production. Asked about the degree of localization, he responded: We need to balance our desire to localize production in Ukraine, which will benefit the Ukrainian economy, with the demand of the French side for localization in France.
                Prime Minister Groysman told the Alstom CEO about a locomotive deal: The issue of localization is very important to us. We are interested not only in maintenance but also in full scale production. The French CEO responded: You have every opportunity to become a production base of European scale. We are, of course, aware of the amount of work that we have ahead, but we came to strive for a strong and lasting partnership. According to the Center for Transportation Technologies, Alstom has interview 50 potential parts supplier and five potential locomotive manufacturers.
                Ukrzaliznytsia plans to spend $1.85 billion through 2025 to buy 310 new locomotives, Alexander Bogdanov, deputy director of the state railroads locomotive department, said at a recent railway conference in Kyiv. The average Ukrzaliznytsia locomotive has used up 84% of its expected working life. By the end of this month, all 30 GE locomotives imported from the US since last fall are to be released for service on the tracks.
                Chinas Xian Electric Engineering Co. has signed a 19.4 million contract to rebuild a Ukrenergo substation serving the Boryspil, Brovary and Baryshivka regions of Kyivs regions left bank. Ukraines state electricity distribution company says that 11 companies from eight countries participated in a tender under rules set by the European Investment Bank, the primary source of project finance. The Chinese bid cut the expected price by 25%. Xian is to complete upgrading the 330 kV Brovarska substation by the end of 2021.
                Ukrainians are returning from Slovakia to work in steel plants at home, President Poroshenko asserted on a visit to Mariupol, where he inaugurated a new continuous casting machine at the Mariupol Metallurgical Plant, part of Metinvest. Noting that wages rose sharply in the second half of last year to $666 a month, he said: Ukrainians are returning from metallurgical plants in Slovakia, and today they are working here.
                The SCM group, owner of Metinvest, invested $1.3 billion in its Ukraine companies in 2018,Natalia Yemchenko, SCM spokeswoman, writes on Facebook. SCM is owned by Rinat Akhmetov.
                The EU plans to spend 50 million to improve road and rail access to Mariupol and Ukraines Sea of Azov, President Poroshenko told the Odesa Regional Development Council on Saturday. By electrifying rail lines, he said, EU aid could extend Intercity rail service from Zaporizhia to Mariupol. We will bring Mariupol closer through Intercity. For me, this is a fundamental thing and a challenge: we must reduce the distances.
                President Poroshenko promises to submit a public private concessions bill as an urgent bill to the Rada. Deputies are still adopting the relevant laws, the president said in Odesa, referring to the parliaments work in an election month. Concessions can give a powerful powerful impetus to attract foreign investments into our economy, as well as recognition of Ukraine as a favorable logistic center of Europe. At a meeting of Odesa Regions Development Council, Maxim Shirokov, general manager for terminal of Risoil S.A, a Swiss company, said that Risoil has invested $70 million Chornomorsk port since 201.
                Volodomyr Zelenskiy, the leading presidential candidate in opinion polls, met on Feb. 23 with representatives of the IMF and the World Bank and with French Ambassador Isabelle Dumont.Aivaras Abromavicius, former minister of economy and trade, set up the meetings. He later told RFE/RL: In those three meetings on Saturday he did well. Without providing details, he said Zelenskiy took pressing questions basically head-on and gave impressive answers.
                On April 1, three weeks before the expected second round of Presidential elections, all front line soldiers will receive bonuses. Front line soldiers will receive the hryvnia equivalent of $74, down payment on a $444 annual bonus. Rear guard soldiers will receive a $37 payment, advance on an annual payment of $204. Navy personnel in the Azov will receive front line bonuses. Active duty soldiers are allowed to vote.
                In another injection of cash into hands of voters, the government will pay $211 million in housing, heating, and communal subsidies directly to homeowners in cash this month. Andrei Reva, Social Policy Minister said payments could be as high as $888, and will average $62. The payments, to be repeated in April, will go to 3,378,807 households.
                An IMF team arrives in Kyiv tomorrow for a week long review visit. In December, Ukraine received a first $1.4 billion tranche of a 14-month $3.9 billion program. Progress toward implementing anti-corruption conditions is needed for release of a second tranche, expected to be $1.3 billion in May.
                Ukraine has received a second loan, for 529 million, under a World Bank guarantee, reports the Finance Ministry. Funds were provided in two tranches - 240 million with a maturity of four years, and 289 million with a maturity of 10 years. The loan was arranged and provided by Deutsche Bank. Since December, a World Bank guarantee of $750 million has allowed Ukraine to attract about $1 billion from international markets.
                Ukrainians and Georgians can visit each others countries using only their national ID cards, or internal passports, under an agreement that went into effect on Friday. Ukraine and Turkey have a similar passport-free, 90-day visit agreement. Last year, 177,000 Ukrainians visited Georgia. Four airlines fly from Kyiv to Tbilisi: Georgian Airways, SkyUp, UIA and Yanair. In May, SkyUp starts flights to Batumi. This summer, Yanair will fly to Batumi from Kyiv Sikorsky, Lviv and Odesa.
                Kharkiv, Ukraines second largest city, gets more international flights this spring. On Saturday, SkyUp started flights to Sharjah, UAE. On March 25, Ernest Airlines starts flight to Rome and Milan-Malpensa. On May 3, Buta Airways launches flights to Baku.
                Lviv airports passenger traffic increased by 50% y-o-y in January and February, maintaining the strong 48% growth of last year. Of the 108,400 passengers in February, 89% flew international. On Sunday, Wizz Air started flights to Copenhagen. Confirmed new flights this season are: Motor Sich to Uzhgorod on March 15, airBaltic to Riga on April 1 and SkyUp to Odesa on June 2. This year, Lviv is expected to win a flight to Doha on Qatar Airways.
                For comments and story tips, Brooke is reachable at:
                Read More News on


                • Ukraine Business News
                  Billed as the largest industrial construction project in history of independent Ukraine, a new $150 million steel casting plant in Mariupol is to pump out $1 billion worth of new steel slab exports a year. Metinvest says the new plant will increase Mariupols Iron & Steel Works steel smelting capacity by almost 40%. It will allow the plant to replace exports of low value pig iron with higher value steel slab. Inaugurated Friday after 2.5 years of construction, the new plant has created 347 new jobs.
                  Capable of casting 2.5 million tons of steel slab a year, the plant largely uses Austrian equipment from Primetals Technologies. Raiffeisen Bank International provided a 43 million loan, covered by Austrias export credit bank, Oesterreichische Kontrollbank AG. Gas cleaning and dust removal equipment comply with EU environmental requirements. Yuriy Ryzhenkov, Metinvest CEO, said: This large-scale project will ensure a clean production and new jobs, additional foreign currency revenues amounting to approximately $1 billion for the country, and guaranteed prospects to the industry, the region and the city.
                  Nibulon has launched its 10th and final tug boat from its Mykolaiv ship yard. Completing a five-year construction project, the tug fleet is to haul grain barges down the Dnipro to Nibulons Black Sea terminals in Kherson and Mykolaiv. The latest tug uses key imported foreign components: Mitsubishi -- main engines; Volvo-Penta -- diesel generators; Rolls-Royce -- screw-steering columns; and Viessmann -- hot-water boiler.
                  With an early end to the ice season and completion of repairs on two locks -- Kakhovsky and Zaporizhia commercial shipping on the Dnipro is to resume next week. Last year, 10 million tons of cargo were moved on the Dnipro, up 22% from 2017.
                  Using the Dnipro River to move construction materials, Kyivs river port plans to build a 10,000 square meter, multi-modal logistics center, capable of handling containers for trucks or trucks, reports the Center for Transportation Technologies. Sand, gravel, metal, and cement are target cargos. Over the last five years, the Kyivport company has invested $1.5 million in building warehouses and a customs complex and buying an icebreaking tugboat and a floating crane. Two barges and a hydraulic lift were bought from Belarus. The port aims to attract cargo from Belarus, 1-2 days upriver from Kyiv.
                  The government will appeal a court decision on Monday that invalidated a Cabinet of Ministers decree to raise internal gas prices to the prices for imported gas. Vasyl Ryabchuk, spokesman for Prime Minister Groysman, wrote on Facebook that the government will appeal Mondays ruling by the District Administrative Court of Kiev a 2016 government decree on gas prices.
                  The World Bank and G7 Ambassadors condemned as a serious setback a second court ruling, this one invalidating the nations law on illegal enrichment. The condemnation came Monday after President Poroshenko promised to submit a new replacement law.
                  With Volodymyr Zelenskiy leading in opinion polls for the March 31 presidential vote, Oleksander Danylyuk, the former finance minister, is working with Aivaras Abramovicius, the former economy minister, to set up meetings between Zelenskiy and key western players. Diane Francis interviewed Danyluk for the Kyiv Post. Danylyuk says: My impression is the following: He clearly doesnt have enough knowledge in the important spheres because you only get that by working in government. The lack of experience should be addressed. And the only way to address this is by having a strong team with experience On economics, he listens. Hes not fully there yet, but more and more professional eople have more interest in talking with him and explaining issues.
                  Separately, Timothy Ash writes: The engagement of reformers with the Zelenskiy team is helping to erode Poroshenkos message that the economy is only safe in his hands. Indeed, it is possible now to imagine a President Zelenskiy formally engaging reformers such as Danylyuk and Abramovicius, and working with the IMF and other IFIs to maintain the reform agendawe need to get used to the prospect of a Zelensky presidency, as I think some of the reformers are.
                  Wizz Air is basing a fourth Airbus A320 jet at Kyiv Sikorsky this month, responding to near doubling of its Ukraine passenger traffic. In January-February, the airline carried 300,000 passengers on its 44 Ukraine routes, up 94% from the same period last year. Last weekend, the discount airline opened four new Ukraine routes: from Lviv to Copenhagen, and from Kyiv Sikorsky to Riga, Bremen, and Billund, Denmark. The company now employs 140 people in Ukraine and says its investments here total $400 million.
                  While touring the nations 24 regional capitals in his reelection bid this month, President Poroshenko writes on Facebook: The development of regional airports is our priority!

                  Here are some concrete results:
                  Uzhgorod airport reopens next week with flights on Motor Sich to Lviv and Kyiv. The new weekly flight ends a three year break in commercial flights.
                  Mykolaiv airport aims to 200,000 passengers a year in the early 2020s, surpassing a level not seen 1990. Closed for a decade, the airport reopened 10 weeks ago with SkyUp flights to Sharm el Sheikh, Egypt. On May 1, SkyUp starts flying to Antalya, Turkey. On a visit to the airport Monday, President Poroshenko was told flights are planned to Kyiv and to Istanbul.
                  Cherkasy airport, closed since 2002, is negotiating with SkyUp Airlines to host international charter flights later this year. Odesas Rostdorstroy is under contract to complete repaving the airports 2.5 km landing strip by the end of this year.
                  President Poroshenko ordered officials on Friday to reopen Mariupols airport. Located eight kilometers west of the city, the airport served as a Ukrainian Army command center during the separatists May-June 2014 occupation of the city. In 2016, the military returned the airport to civilian authorities who promised to make it the main airport for Donetsk region, replacing Donetsks destroyed airport. But with the frontline 35 km to the east, security concerns dictated the airport only be used by low flying helicopters approaching from the west. In a visit to the city, Poroshenko ordered defense officials and Infrastructure Minister Volodymyr Omelyan to reopen the airport for civilian flights. Without commercial flights for a decade, Mariupol airport, with its 2,550-meter strip near the Azov, handled 25,000 summer vacationers passengers a month during its Soviet heyday.
                  For comments and story tips, Brooke is reachable at:
                  Read More ews on


                  • UKRAINE BUSINESS NEWS
                    Russia will not send gas through Ukraine next year, predicts Yuriy Vitrenko, managing director of Naftogaz. When Nord Stream 2 is finished this year, there will be no need to use the Ukrainian gas transit system, Vitrenko told a packed conference on the future Ukraines gas pipeline in Brussels on Tuesday. And then Ukraine will lose approximately 4% of GDP, he said, referring to the loss of $2.5 billion a year in gas transit revenues paid by Gazprom.
                    Why I am so pessimistic -- or realistic? the Naftogaz number two asked himself. First, Gazprom is overbuilding pipeline capacity. Meanwhile, EU gas consumption will be flat, then decline as renewables rise and EU tries to meet carbon emissions goals. Second, Russia no longer needs Ukraine as a fallback for cold winters when EU gas consumption spikes. Gazprom has bought 8 billion cubic meters of storage reservoirs in Germany and elsewhere in Europe. Finally, Gazprom is not showing serious interest in negotiating a new contract, said Vitrenko, who participated in the two EU-Naftogaz-Gazprom contract talks. Saying that Gazprom and Naftogaz live in parallel worlds, he predicted: There is no indication in May we will have reasonable negotiations.
                    Next door to Brussels, Russian Prime Minister Dmitry Medvedev told Luxemburger Wort newspaper Monday that Ukraine could remain as a transit country for Russian gas under certain conditionsThey are a settlement between interested companies, favorable economic and commercial parameters of the deal as well as a stable political situation. In Brussels, Vitrenko said this means Naftogaz surrendering its claims to the $2.8 billion award plus interest against Gazprom in the Stockholm arbitration decision of one year ago.
                    Russias Energy Minister told that gas transit through Ukraine to Europe costs Russia 2 to 2.5 times more Nord Stream 1. This is primarily since the Ukrainian gas transport system was created about 50 years ago, Alexander Novak, the minister, said last week. Back then, the technology was still old, with high depreciation of fixed assets, and large losses during gas transport. Russias new pipelines Nord Stream 2 and TurkStream - he said, feature large-diameter pipes, high pressure, high gas transfer rate, low losses.
                    In Brussels, Olena Zerkal, Ukraines deputy foreign minister, dismissed the ministers critique as not true. Vitrenko said: The Ukraine pipeline system is in much better shape than the Russian system we have seven times fewer incidents than the Russian system. The Ukraine pipeline system is perfectly fine.
                    But without a contract for guaranteed gas transit volumes, foreign investor interest in upgrading and managing Ukraines gas pipeline system is frozen, said Vitrenko. There are a number of serious US and European companies interested in managing transmission, but how will they get their money back? he asked, saying there is no money to made in managing an empty pipeline.
                    Raising the stakes for Gazprom, Vitrenko said that in April Naftogaz will file a complaint in Brussels with European Commission Competition authorities claiming that EU consumers are damaged by Gazproms anti-competitive practices. About one quarter of gas consumed in the EU comes from Russia through Ukraine. Last week, Russia said it does not recognize a new Hague arbitration decision that Russia should pay Ukraine as much as $8 billion for stealing Naftogaz offshore platforms and other assets in Crimea in 2014.
                    European companies that resume laying pipe this spring for the Nord Stream 2 gas pipeline risk significant sanctions, Nicole Gibson, deputy director of the US State Departments office for Europe, warned at th gas transit conference in Brussels. Two months ago, when pipe laying in the Baltic was suspended for the winter, Richard Grenell, US Ambassador to Germany, sent letters to European companies warning them of the sanctions risk. Asked about next steps, Gibson said Tuesday US policy is not to discuss sanctions before they are officially announced. Saying that the US supports robust gas transit through Ukraines gas transit system, she said: Some people say it is a fait accompli that Nord Stream 2 will be done. We dont see it that wayWe call on European leaders to make sure Nord Stream 2 is not implemented.
                    Naftogaz gas production company, UkrGazvyDobuvannia, nearly doubled its fracking operations this winter. The state company reports that it plans to conduct over 100 hydraulic fracturing operations this year, extracting an extra 500 million cubic meters of gas.
                    With state gas production flat last year, attention turns to private company participation Wednesday in Ukraines online auctions of 10 gas and oil fields for exploration and production.Ariel Cohen, an Atlantic Council senior fellow, writes in Forbes of last Januarys Ukraine oil and gas conference in London where questions about Naftogaz dominance, the fiscal regime, and regulation left most attendees skeptical. Participation in the March 6 auction, he wrote, will be an important indicator of market sentiment.
                    Volodymyr Zelenskiy, the leading presidential candidate in opinion polls, backs the strategy of Jair Bolsonaro, Brazils new president, to hire outside experts for government. Its the right move to bring all kinds of professional managers, including from the U.S., to power, he told Bloomberg in Kyiv. It gives people hope. For me, this is a very vivid illustration." Referring to French President Emmanuel Macron, a fellow 41-year-old, he said the two share a common mindset.
                    On Monday, Oleksandr Danylyuk, Ukraines former finance minister, represented Zelensky at a candidates forum sponsored by the Ukraine Business Council. Danylyuk advocated policies he pushed until he lost his post last June: disbanding the tax police, banning the SBU from investigating economic crimes, and centralizing financial investigations under the Finance Ministry. Speaking for Zelensky, Danylyuk said he favors cutting taxes, modernizing the labor code, and unbundling Naftogas into separate entities.
                    On Facebook, Zelenskiy wrote Monday that he favors drafting a new law on illegal enrichment that will meet Western standards. In an apparent reference to President Poroshenko, he vowed one presidential candidate will go to prison.
                    Ukrainians spent nearly twice as much last year to buy mobile phones as to buy laptops and TVs combined. Ukrainians spent $1.1 billion to buy 6.9 million mobile phones, 78% of them smartphones. The average smartphone cost $200. The average push button phone cost $23. Point of Sales Tracking GfK Ukraine reports, Ukrainian spent $320 million to buy 610,000 laptops and $333 million to buy 810,000 televisions.
                    For comments and story tips, Brooke is reachable at:
                    Read More News on


                    • UKRAINE BUSINESS NEWS
                      New office space is to double this year in Kyiv to 117,000 square meters, according to a new study by CBRE Ukraine. In 2020, new space is to increase by another 20%, fully returning to pre-2014 levels. Of new construction, 58% is in the central business district, an area with good metro access. As vacancies dropped last year from 17% to 10%, monthly prime office rents rose by 9% y-o-y to $25/square meter. Last year, about $130 million of known investments were made in Kyiv offices, the highest level since 2008.
                      Driving demand, IT companies accounted for 38% of office take up and co-working hubs accounted for 24%. The biggest expansion was by Regus, which rented three new office spaces for a total of 8,300 square meters. Of this take up, upgrading accounted for 51% and company expansions for 34%. CBRE writes: Demand for high quality, well-located offices came from IT, high tech and telecommunications and business services companies willing to open most competitive offices in the fight for the best talent in the market.
                      Dragon Capital has bought Aladdin Kyiv, its fourth shopping center in less than three years Ukraine. Located at a left bank highway interchange, near Poznyaki metro station on the Green metro line, Aladdin is 500 meters from Pyramida, a slightly larger mall that Dragon bought in 2016. Between those two purchases, Dragon bought Sky Park in Vinnytsia and Victoria Gardens in Lviv. Vladimir Tymochko, Dragons managing director for equity, says the purchase of Aladdin, with 10,571 square meters of leasable area, brings the total area of Dragons shopping center portfolio in Ukraine to 160,000 square meters. The Aladdin purchase price was not disclosed. In 2016, Interfax-Ukraine estimated the purchase price of Pyramida was $25 million.
                      In a blunt speech, US Ambassador Marie Yovanovitch called on the government to take concrete steps to curb corruption, widely see as a cancer retarding business investment and economic growth. Yovanovitch asked the government to fire anti-corruption prosecutor Nazar Kholodnytskyi, to approve a new law barring illegal enrichment, and to block 31 judges with dubious reputations from joining the Supreme Court. Those responsible for corruption should be investigated, prosecuted, and if guilty, go to jail, she told a media event Tuesday night. And in order for that to happen, all of the elements of the anti-corruption architecture must be in place and must be working effectively. The ambassador also told President Poroshenko to hold clean elections or risk losing Western support.
                      Timothy Ash writes from London: Stark warning to Poroshenko Administration that they cannot assume Western backing, and that they have to deliver on the anti-corruption front and also ensure free and fair elections, to be worthy of this also suggests that the West and the US will work with any of the three main candidates in these elections, should they emerge victorious. Poroshenko should not take Western support for granted.
                      Veteran Ukraine watcher and business reporter Diane Francis writes in an Atlantic Council essay: Why Poroshenko Doesnt Deserve a Second Term: Zelenskiy is an experienced and successful businessman whose hit Servant of the People provided viewers with an impressive guide to Ukraines corrupt overlords as well as a playbook for reform.
                      Almost 40% of Ukrainians would like to open their own business, but two thirds believe the state hinders small and medium businesses, according to a late February poll of 2,500 people conduced by the Sociological Group Rating, a nonprofit entity. But only 27% see the governments role as promoting economic freedoms. A majority, 64% see the states role as ensuring income equality and social justice, a jump from 48% last June.
                      An overwhelming majority 77% - support cutting bank interest rates, currently the highest in Europe. Of respondents, 63% trust small entrepreneurs and 60% trust medium-sized entrepreneurs. Confidence in big business owners fell to 20%, and in oligarchs to 6%.
                      It is now easier for foreigners to get work permits, the government says. Under regulations adopted Wednesday, foreigners are allowed to submit documents to the Foreign Ministrys Consular Services Department, without leaving Ukraine. The change was announced at the latest deregulation meeting of the Cabinet. At the meeting Prime Minister Groysman said the government has abolished or changed 1,200 regulatory documents, including the removal Wednesday of 149 obsolete acts from the mid-1990s. The government abolished the obligation for companies to keep complaint books.
                      Ukraines goal this year is to climb 10 notches in the World Banks Ease of Doing Business ranking. Last year, Ukraine rose five points to rank 71st out of 190 countries. Charged with this deregulation mission, the current Cabinet is to remain in place until next November, when results of the Oct. 27 parliamentary election are known.
                      The government will renew the 3-year contract of Naftogaz CEO Andriy Kobolyev. Instead, a tender will open March 23 for his replacement. In response, Kobolyev held a press conference Wednesday afternoon, announcing that he refuses to resign and saying the decision to replace him is against the law and contradicts the spirit of reform. Timothy Ash writes: Idiotic move to replace Kobolyev. What a waste of reform effort. Whose interests does that serve?
                      Of 10 oil and gas blocks up for electronic auction Wednesday, there were no bidders on seven and only Ukrainian bidders for three. In the three successful auctions, prices were bid up -- from 43% to five times the asking prices. Nikolay Zlochevskys Burisma group agreed to pay $925,000 for a lot in Poltava. A unit of Rinat Akhmetovs DTEK agreed to pay $3.1 million for a Kharkiv block, almost five times the lowest bid. State-owned UkrGazVydobuvannya agreed to pay $1.1 million for another Kharkiv block, three times the starting price. Foreign investors had complained about the lack of insufficient seismic data. They also expressed concerns that Ukraines next president could change the rules of the game.
                      In a survey of 230 countries, Ukraine has the fourth cheapest mobile internet in the world. With an average prices of US 51 cents per gigabyte, Ukraine was only bested by India, Kyrgyzstan and Kazakhstan in the Worldwide Mobile, Data Pricing list compiled by Cable, a Britain-based broadband advisory service. At the other end of the scale are: Zimbabwe $75 per gigabyte; Greece --$33; Chad -- $23; Switzerland -- $20; Turkmenistan -- $20; Greenland -- $17; Mozambique -- $16; Portugal -- $14; and Norway -- $13. Cheap internet boosts Ukraines IT industry.
                      For comments and story tips, Brooke is reachable at:
                      Read More News on


                      • UKRAINE BUSINESS NEWS
                        The three oil and gas blocks sold at electronic auction should trigger almost $250 million in exploration and production investment, says Stepan Kubiv, Economic Development Minister. Sold Wednesday by online auctions on ProZorro, the blocks went for a total of $5 million, about triple the opening price. Kubiv said: Simple and competitive access to special permits for subsoil use is a boost to increase our own production. Concorde Capitals Alexander Paraschiy writes: This was the first transparent tender for the sale of oil and gas licenses in Ukraine. If such tenders become a regular occurrence, they will benefit the nations investment climate and energy independence.
                        Gazprom says it has built one third of Nord Stream 2, the Russia-Germany Ukraine bypass gas pipeline. At this point, in the Baltic Sea are laid 818 km of pipes - exactly one third of the total length of the pipeline, Russias state gas company reports. On Tuesday in Brussels, Naftogaz managing director Yuriy Vitrenko predicted that Nord Stream 2 will be commissioned at the end of this year and the no Russian gas will flow through Ukraine next year.
                        Hollands Royal De Heus, one of the worlds top 10 animal feed suppliers, is buying majority control of D-Mix, a Lviv region manufacturer of food for chickens and pigs. With a capacity to make 80,000 tons of soy and sunflower-based feed, D-Mix is about to start building a multi-million dollar pre-mix plant at their Zolochiv site. Betting on beef and dairy herds expanding in the 2020s, Koen de Heus, CEO of the family owned multinational, says: We believe that our extensive experience in international livestock farming and the animal feed sector will also be of value in further professionalizing livestock farming in Ukraine.
                        The government will spend $130 million this year to turn around the gradual decline of the national livestock herd, Olga Trofimtseva, Minister of Agrarian Policy and Food, told the International Dairy Congress in Kyiv. Of this amount, about half will be for rebuilding milking barns and fences and purchases of modern equipment. For households, the subsidy for keeping a milk cow is raised to $33, paid twice a year.
                        Kormotech, a Lviv region producer of cat and dog food, is building a wet food plant in Lithuania and is expanding its dry food production in Ukraine by 50%, to 46,000 tons. To reach a target of exporting 50% of production by 2023, the company is entering new markets -- in South America, Hungary, Lebanon, Libya and the Czech Republic. The company sells its pet food under the brands Optimeal, Club 4 Paws, Meow!, and Woof!
                        Inflation slowed in February to 8.8% year over year, reports the State Statistics Service. This was down from 9.8% for 2018. The National Bank of Ukraine predicts inflation will end this year at 6.3%. The IMF and World Bank predict 7.3%.
                        Work is to start this spring on doubling to four lanes the 200 km Lviv-Rivne section of the M-06, cutting drive times in half, to 90 minutes. This is a key section of the main truck route west from Kyiv and Zhytomyr to the Polish border. Construction will include building bypasses around towns on the way, reports the Center for Transportation Technologies, citing Ukravtodor, the state highways agency.
                        Hungary plans to build next year a new highway bridge over the Tisa River near Chop, the Zakarpattia border town. In addition, both countries are working to cut travel times on the new Mukachevo-Budapest train to six hours, from seven. Work also is underway to put to use Hungarian loans for Zakarpattia road rebuilding, first offered two years ago, reports Ukraines embassy in Budapest, citing a meeting Friday between ungarian diplomats and Ukraine Infrastructure ministry officials.
                        Taking trucks off roads, Ukrzaliznytsia expands its increasingly popular container freight service, launching a new train running the north-south length of the nation, from Belarus to Romania. On Wednesday, the first train rolled -- from Udritsk on the Belarus border to the Chernivtsi rail crossing with Romania, a 1.5-day trip. Started in earnest two years ago, Ukrzaliznytsias container service has expanded to 10 domestic trains and eight international transit trains. Yevhen Kravtsov, chairman of the state railroad, said: This guarantees shippers the reliability, safety and speed of delivery of products on the principle of door to door.
                        Boryspils Terminal F reopens March 31, relieving congestion at Terminal D, which handled 1 million passengers a month last year. Airlines moving to Terminal F are: Aigle Azur, Laudamotion, Ryanair, and SkyUp. Terminal F will also handle some flights by: Air Serbia, Bravo Airways, Bukovyna, FANair, Iraqi Airways, Wind Rose and YanAir. Charter and low-cost carriers operating point-to-point direct flights will operate in Terminal F, Yevhen Dykhne, first deputy director of Boryspil, writes on Airlines handling transfer passengers and codeshares will stay in Terminal D.
                        By refurbishing and reopening regional airports, Ukraine could triple its air passenger market to over 60 million people a year, Infrastructure Minister Volodymyr Omelyan tells Channel 5 TV. We will be able to reach it quickly enough if we invest in airports, the minister said. He noted that Ukraines air traffic increased last year by 25%, hitting 20.5 million passengers.
                        Ryanair is to start flights from Kharkiv this fall, making Kharkiv Ukraines second city to be served by Europes largest airline. The main destinations under negotiation are cities in Poland, Germany and the Baltics, Vladislav Ilyin, the airports marketing director tells On Vacation (U Vidpustku) website. He says: We plan that this year Ryanair will fly from Kharkiv. Serving Ukraines second largest city, Kharkiv airport registered a 19% jump in traffic last year, to almost 1 million. Airport officials also are negotiating with Wizz Air about adding more German routes, beyond the sole Kharkiv-Dortmund flight.
                        New flights and new frequencies were approved by Ukraines Aviation Service Commission.Jonika airline won the right to fly Kyiv-Gothenburg, Sweden and Kherson-Erbil, Iraq. UIA won the right to increase the frequencies of its flight from Kyiv Boryspil to Toronto to five times a week and to Paris to 18 times a week. SkyUp won the right to increase the frequencies of its flights from Boryspil to Alicante, Spain to four times a week and to Tbilisi to daily. In June, UIA plans to start flights from Kherson to Burgas, Bulgaria.
                        Betting on foreign travel growth, Azur Air Ukraine is doubling its long-haul fleet by leasing two more Boeing 767-300s, reports Karen Antonov, charter airlines company's general director. The additional planes will allow Azur to offer business class on its flights to Barcelona, Egypt, Tunisia and Turkey.
                        For comments and story tips, Brooke is reachable at:
                        Read More News on


                        • UKRAINE BUSINESS NEWS
                          Ukraine lost up to 15% of its record 70 million ton grain harvest due to improper storage and handling in transport, estimates Pro-Consulting. Investment is needed in silos and elevators. Competition is needed among the grain handling facilities at the nations 13 seaports, reports UNIAN, citing the Kyiv-based market analysis firm.
                          Construction starts this summer on a $12 million grain storage and processing complex in the Bila Tserkva industrial park. Designed to ship gain by truck or train, the complex is to have the capacity to accept 3,000 tons of grain a day. In the summer of 2020, Volytsia-Agro LLC plans to open the complex which will have an elevator, grain dryers and silos for wet and dry grain. Vasyl Khmelnytsky, owner of the farming company and the industrial park, made the announcement on Facebook.
                          Epicenter K Group is expanding its modern silo storage capacity to 1 million tons at eight locations, Svitlana Nykytiuk, tells Interfax-Ukraine. In July, the farming group plans to launch the first $30 million phase 500,000 tons in four locations. While building rail tracks to two silos, the company also is spending $6 million to buy 100 grain trucks.
                          Kernel, the agro giant, opened its new grain export terminal in Chornomorsk last month, adding one million tons of throughput capacity. By the end of this year, the company is to open a second phase, increasing its Chornomorsk throughput by an additional three million tons. Last month, Kernel, Ukraines largest vertically-integrated agribusiness, bought railcar company RTK-Ukraine. Dragon Capital writes: With almost 3,000 grain hoppers, at a estimated valuation of $64 million, [Kernel] almost met its grain transportation needs, complementing the existing fleet of 500 wagons.
                          As demand grows to move grain, Sergey Tigipko is talking with foreign investors about expanding his grain wagon fleet as much as seven times, to 10,000 wagons. Tigipko, owner of TAS-Logistic, tells Novoye Vremya that his company now has 1,200 grain carriers.
                          Ukrzaliznytsia has posted on its website a list of 301 low-performing grain stations that are candidates for closure. During the last harvest season these stations averaged less than 2.3 grain cars a day, Andrei Ryazantsev, director of finance at the state railroad, tells the Center for Transportation Technologies. Last summer, Ukrzaliznytsia announced that 130 grain stations received less than one car a day. One grain hopper typically carries 70 tons of grain.
                          Ukraine is the worlds largest exporter of millet, a grain used for food and fodder, according to Mordor Intelligence. The smallest of Ukraines grain exports, millet goes largely to Germany and South Africa. Ukraine exported 76,000 tons in 2016. By comparison, Ukraine expects to export 49 million tons of grain in the marketing year that ends this June.
                          Ukraine, South Korea and the US are working with Science Technology, a Saudi company, to design and build an unmanned combat aerial vehicle capable of carrying tons of weapons. Details of the long range unmanned bomber were revealed at IDEX 2019, a recent defense show in Abu Dhabi, reports Defense Blog news site. Citing interest by Middle East and North Africa militaries, the Washington-based blog reports: The UCAV fleet in the region is forecast to increase from dozens of aircraft in 2018 up to 700 combat drones in 2028.
                          Ukrspetsexport, the military import-export agency, is building an armored vehicle assembly plant in Myanmar, reports Defense Blog. Equipment and production machines have arrived in Yangon for a plant that is to start operating next year, reports Defense Blog. The plant will assemble 8-wheeled BTR-4U armored personnel carriers, designed by Kharkivs Morozov Design Bureau. From the same Kharkiv company, the Myanmar plant will build 2S1U self-propelled Gvozdika howitzers. After Myanmars Buddhist majority government forced much of its Muslim minority to flee to Bangladesh, the US and the EU expanded existing bans on sales of arms and equipment that can be used for internal repression.
                          President Poroshenko says Ukraine will start mass production this year of Neptun, a land-based anti-ship rocket, and Sokil, or Falcon, a reconnaissance and attack drone. Longer range over 500 km missiles could be developed now that Ukraine no longer considers itself bound by the defunct intermediate range missile ban treaty, Ukrainian diplomats say. On Saturday, Poroshenko said at a campaign rally in Chernihiv: We are no longer bound by any limitations either on the range of our missiles or on their power. Let the enemy know about it, too.
                          US-based Curtiss-Wright Corporation has signed an agreement with Kropyvnytskyi-based RadICS LLC to market their nuclear power safety systems to US power plant operators. Under the agreement signed recently in Dallas, the Idaho Falls unit of Curtiss-Wright will be the US stocking facility for all RadICS system components for the Kirovohrad region company.
                          US-owned Jabil Circuit Ukraine, Ltd. is building a second electronics assembly plant in Zakarpattia, 300 meters south of the main rail freight yard for trains to Slovakia. The new, 20,000 square meter plant will be five km south of Uzhgorod and adjacent to Jabils existing plant, a workplace for 2,300 people. The new plant is to employ 1,300 people assembling mobile phones, media players and computer equipment for export to the EU.
                          Slovakian and Ukrainian officials want to speed east-west freight and passenger rail traffic by developing logistics terminals in Koice and Mukachevo and a joint customs and border control point in Chop, reports Railwaypro news site. At a bilateral meeting, Infrastructure Minister Volodmyr Omelyan cited Ukraines new double track tunnel through the Carpathians mountains, saying: After the opening of the Beskidy rail tunnel, the transit though the territory of Ukraine and Slovakia can increase by several times. Dana Meager, from Slovakias Finance Ministry, said: The development of a logistics complex in Koice can turn Ukraine and Slovakia into a gate between Asia and Europe and into a one big logistics hub.
                          ActiveChat, a Kyiv-based chatbot software company, hit the top of sales charts last month at AppSumo, the Texas-based deals website for digitally distributed online services. ActiveChat sold 10,800 subscriptions during the last two weeks of January, making it the periods bestselling Software as a Service, or SaaS. The previous record for a Ukrainian company was DepositPhotos, which sold 8,000 subscriptions on AppSumo. Believing in the future of voice-activated chatbots, Sergei Kostyukov, the companys managing partner, is talking with potential American investors with a goal of increasing ActiveChats market cap 10-fold in the next three years.
                          [TABLE="align: center, cellpadding: 0, cellspacing: 0"]
                          [TD="align: center"] [TABLE="align: center, cellpadding: 0, cellspacing: 0"]
                          [TD="align: left"]
                          [TABLE="align: right, cellpadding: 0, cellspacing: 0"]
                          [TD="width: 355, align: left"] [TABLE="cellpadding: 0, cellspacing: 0"]
                          [TD="align: left"] [TABLE="align: center, cellpadding: 0, cellspacing: 0"]
                          [TD="align: center"]


                          • UKRAINE BUSINESS NEWS
                            Kyiv accounted for 46% of all IT vacancies in Ukraine last year, Volodymyr Kurylo, CEO of CleverStaff, tells Interfax-Ukraine. Following in the top five cities were: Lviv 15%; Kharkiv 13%; Odesa 6%; and Dnipro 6%. Demand for QA engineers grew by 67%, for front end developers doubled, and for Android developers tripled. Based on the changes in the number of vacancies in the CleverStaff database, we can predict that within two years in Ukraine there will be a demand for 7,600 front end developers, 7,200 testers, and 4,600 Java developers, said Kurylo, whose company develops software for applicant tracking and recruitment automation.
                            From Kyiv to Helsinki by train, bypassing Russia? Peter Vesterbacka, the Finnish entrepreneur behind the Angry Birds video game franchise, has signed a memorandum of understanding with a Chinese company, Touchstone Capital Partners, to arrange 15 billion to build a 100 km road and rail tunnel between Helsinki and Tallinn. Although the two cities face each other across the Gulf of Finland, the rail connection requires an 800 km detour through Russia. In addition to building the worlds longest undersea tunnel, the Chinese investors would build four stations and provide high speed trains.
                            Completion would be by 2025, also the target year for completing Rail Baltica, a high speed European gauge railway connecting Tallinn and Warsaw. This year, Ukrzaliznytsia expects to extend its new Four Capital train to Tallinn. Launched last fall, this overnight train runs twice a week on a south-north route: Kiev Minsk Vilnius Riga.
                            Ukraine is more than doubling exports this year of a niche grain: rye. From last July to this January, Ukraine exported 85,000 tons of rye, 123% more than the total exports for the last marketing year, reports UkrAgroConsult. Rye is used for bread, beer, some whiskeys and horse feed.
                            Rusting landscapes familiar to train riders may gradually improve as Ukrzaliznytsia starts to turn its scrap steel into cash. On Monday, Metinvest agreed to pay $7 million for 26,800 tons of railroad scrap sold at auction on the ProZorro auction platform. This year, the state railroad plans to earn $75 million from scrap metal sales. With about 450,000 tons of metal for sale, it will take at least two years to work through Ukrzaliznytsias scrap mountain.
                            To cut the isolation of the Sea of Azov, Ukrzaliznytsia launches on March 30 a Kyiv-Mariupol Night Express. Running every other day, the express will cut two hours off the route, reducing it to 14 hours and 44 minutes.
                            Starting March 31, trains will travel daily from Mariupol to Kharkiv, Ukraines second largest city and home to a major international airport. These overnight trains will take 12 hours and 40 minutes.
                            Mariupol plans to inaugurate a $6 million modern grain terminal by August, in time for the new harvest, Igor Barsky, port director, tells the Center for Transportation Technologies. To drum up business, a major national conference, Grain Logistics and Terminals of Ukraine, will be held in Mariupol on June 12.
                            With half a billion dollars worth of wind projects planned for Ukraines Sea of Azov coast Berdyansk is becoming a major port of entry for the massive wind turbines. DTEK and China Machinery Engineering Corporation plan to send 63 turbines through Berdyansk this year. Already, in January, 26 wind turbines were unloaded at Berdyansk Starting last May, Russian border patrol boats have intermittently harassed commercial ships heading for Berdyansk and Mariupol.
                            Asket Shipping has increased grain storage capacity at Berdyansk port to 100,000 tons, a 42% increase over last year. The company built a new warehouse and expanded an existing one, Victoria Abreyeva, Berdyansk director for Asket, tells the Center for Transportation Technologies.
                            Bids are accepted until March 26 on a ProZorro tender for major repairs at the main berth of Berdyansk port. Later this year, the Seaports Administration plans to put up for tender work on the second berth. The first job is to cost $140,000.
                            Russia and Ukraine have quietly set 2019 quotas for the Sea of Azov fish catch. After representatives of the two fishery agencies could not reach agreement in face to face meetings last fall, diplomats set the quotas for the catch anchovies, sprat, gobies, herring, mullet and taran. When 95% of the total limit is reached, both sides are to stop fishing. Three decades ago, the Azov was the Soviet Unions nations productive fishing area. Last year, Ukraine caught 21,300 tons of fish in the Azov. Ninety Ukrainian businesses used 811 fishing boats, employing 3,670 fishermen.
                            To help the Azov Sea ports, the Infrastructure Ministry plans to exempt Mariupol and Berdyansk from contributing to the state budget, leaving that burden to Ukraines 11 Black Sea ports. Minister Volodymyr Omelyan said: We will not leave our two Azov ports in trouble. All the resources of the state will be sent to help. Together with the European Commission and our American partners, we are developing a project of financial assistance to improve the infrastructure of both ports and cities as soon as possible.
                            The EU is to announce in coming days details of 50 million in road, rail and port aid to Ukraines Azov. At a recent meeting with EU officials in Brussels, Hennadiy Zubko, Ukraines regional development minister, talked about the infrastructure gap between the Sea of Azov region and the rest of the country.
                            AzovAkvaInvest Park, a 16-hectare industrial park in Mariupol, has been registered by the Economic Development and Trade Ministry. The goal of the park is to create 665 jobs in light industry. Ismail Hacioglu, a Turkish entrepreneur, has signed a memorandum with the City Council to build an assembly plant for elevators, escalators and home lifts.
                            With Swedish and USAID aid, much of Mariupols Chess Club has been converted into an IT-Hub. In addition to providing space for IT startups, the IT-Hub provides classrooms for Beetroot Academy. Since opening in Mariupol 18 months ago, Beetroot Academy, a Swedish-funded NGO, has trained 100 local students in skills needed to work for international IT outsourcing companies.
                            For comments and story tips, Brooke is reachable at:
                            Read More News on


                            • Ukraine Business News
                              UKRAINE BUSINESS NEWS
                              Wednesday, March 13
                              Washington Prepares Sanctions Over Nord Stream 2Russian Gas Flowing Through Ukraine Up 15%...Ukrainian Gas Consumption Down 9%...Heads Roll at State Oil and Gas CompaniesUIA About to Receive its First Boeing 737 MAX8
                              By James Brooke
                              Washington is preparing to enact sanctions against Nord Stream 2, probably against the investors and the pipe laying companies, The Wall Street Journal reported Monday in a lengthy article. Officials in Germany, the worlds biggest natural-gas importer, say American liquefied natural gas is 20% more expensive in Europe than Russian pipeline gas. Separately on Monday, Rick Perry, the US Energy Secretary, told reporters that the Trump Administration is still considering sanctions.
                              In response, President Putins press secretary lashed out Tuesday to reporters in Moscow.The hostile and uncompetitive attitude of the United States to thispurely economic project is well known - this is not news, Dmitry Peskov said. We are all aware of the fact that we are dealing with attempts at unfair competition, and sometimes with actions that are actually comparable to international racketeering andraiding. The 1,220 km Russia to Germany gas line is one third built, Gazprom said last week.
                              US exports of liquefied natural gas to the EU almost tripled during the last seven months, compared to the same period in 2017, reports the European Commission. US exports from late July to early March totaled 7.9 billion cubic meters, accounting for 12% of Europes LNG imports. The European Commission said: The European Union is ready to provide more import of liquefied natural gas from the US under market conditionsand at competitive prices. This will allow US exporters to further diversify the European market, thereby contributing to the EU's objectives of security of supply and diversification.
                              Nord Stream-2 could reinforce the EUs dependence on Russian gas supplies and threaten the EU internal gas market, according to a resolution approved Tuesday by the European Parliament in a 402-163vote. The wider resolution said the EU should remain open to imposing new sanctions on Russia if Moscow continues to violate international law. In advance, Sandra Kalniete, the rapporteur and a European Parliament Member from Latvia, said: The time for nice and diplomatic language is over. There is very little room for any cooperation as long as Russia continues to occupy parts of Ukraine and attacks other European countries.
                              The volume of Russian gas flowing across Ukraine to Europe was up by 15% in the first two months of this year, compared to the same period last year. Ukrtransgaz,the state gas transmission company, said that 13.8 billion cubic meters of gas passed through Ukraines pipeline system to the EU and Moldova. Officials for Naftogaz, the parent company, predict that volumes could drop to zero next year.
                              Ukrainians cut their gas consumption by 9% during the first two months of this year,compared to the same period in 2018, reports Ukrtransgaz. The state pipelineoperator did not say why consumption dropped to 7.9 billion cubic meters. Household gas prices were hiked in November, a move that spurred conservation. Last year, Ukraine raised its gas consumption slightly, by 1.3% year over year, to 32.3 billion cubic meters of gas. Since 2015, 525,000 Ukrainian families have received "Warm Loans" government credits to winterize their homes and to buy energy efficient hot water boilers.
                              Mark Rollins, the British energy executive who has served as chairman of the Ukrnaftasupervisory board since November 2015, will have his powers terminated in a shareholders meeting on April 30, reports Ukrinform. The state news agency did not say why the former Shell executive would leave his post overseeing Ukraines largest oil and gas producer.
                              In a wider shakeup of Ukraines state-owned energy companies, the government has not renewed the contract of Andriy Kobolyev, CEO of Naftogaz. Kolobyevs contract expires in 10 days. This Friday, Oleg Prokhorenko steps down as CEO of UkrGazVydobuvannya, the state gas producer. Prime Minister Groysman criticized Kobolyev for receiving an excessively high salary and Prokhorenko for not raising gas production fast enough.
                              Fifteen Ukrainian IT companies are on a worldwide list of top 100 tech companies rated for consistent performance over the last decade. Inclusion on the list is based on rankings given in past years by the New York-based International Association of Outsourcing Professionals. Ten companies have their headquarters in Ukraine: AMC Bridge, Ciklum, ELEKS, Infopulse, Intellias, Miratech, N-iX, Program-Ace, Sigma Software, and Softengi. Five others do much or most of their work in Ukraine: EPAM, Luxoft, Softjourn, Svitla, and TEAM International Services. The first list included only four Ukrainian companies.
                              Land lines are fading out fast, especially in villages where mobile access is increasingly available and affordable, reports the State Statistics Service. For rural households, the number of land lines dropped by one quarter last year, to 564,000. In cities, households with land lines dropped by 18%, to 3.8 million. Overall, about 7 million homes and offices in Ukraine have land lines.
                              UIA plans to go ahead with receiving its first Boeing 737 MAX 8 from Seattle in coming days and to receive two more by the end of this year, the airlines spokeswoman Yevhenia Satska tells Ukrinform. In the last five months, two MAX jets have crashed, killing a total of 346 people. In response, air safety authorities around the world have grounded about two thirds of the 370 jets in use. UIA is closely following the investigation, official reports from the FAA and the Boeing concern, and is in constant dialogue with the aircraft manufacturer, the airlines press service tells Interfax-Ukraine.
                              SkyUp plans to go ahead with receiving two Boeing 737 MAX 8 and three Max 10 in 2023. Evgeny Khainatsky, the discount airlines general director, tells Ukrinform that five years will be enough time to work out any probems with the jets. Prized for fuel efficiency, there are about 5,000 MAX 8 jets on order with Boeing.
                              The government has approved a $11 million project to create an International Pilot Training Center to train pilots under EU standards to fly for Ukrainian and European airlines. Training would be divided between Kyivs Hostomel Antonov airport and the National Aviation Universitys flight academy at Kropyvnytskyi airport, Kirovohrad. Money would be spent to upgrade the Kropyvnytskyi landing strip and to buy two flight simulators and 24 single engine, two-seater planes: 12 Italian-made Tecnams, eight Ukrainian-made Skyeton K-10s, and four American-made Cessna 172s.

                              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:
                              Read More News on
                              Ukraine Media Group LLC 2018


                              • UKRAINE BUSINESS NEWS
                                Kyivs Podolsko-Voskresensky bridge, a city fixture since work began in 2003, is to receive $8 million to speed up construction of the seven kilometer road and rail bridge over the Dnipro. Designed to carry 60,000 cars a day between Podil and the Left Bank, the bridge is actually an ensemble of seven bridges, four interchanges and two viaducts. If spending holds up, the bridge could be open to road traffic by the end of next year. Allocating another $8 million to the northern extension of the Green metro line, Prime Minister Groysman told Mayor Klitschko: "Kiev should be the pearl of Europe.

                                One beneficiary of the big bridge will be Sergei Tigipkos TAS group, which plans to build on Rybalsky Peninsula Lipki Island City Resort a complex of 36 buildings with 6,200 apartments housing 15,400 people. The development will include 43,500 square meters of leasable office space and 33,300 square meters of leasable retail space. This week, TAS partner, City One Development, is presenting this mega project to potential investors at MIPIM, the annual real estate conference in Cannes.

                                Also at MIPIM, Ukrainian Trade Guild, the real estate consulting company, is promoting $400 million worth of real estate projects in Dnipro, Kyiv, Lviv, and Vinnytsia. The stand features: Alfa Mall, Alfa Residence, Alfa District (Dnipro), LCD Europe, IT cluster Hypercube (Vinnytsia), and urban hotels Urooms (Lviv).

                                Spains Acciona Energia Global will acquire majority control of a 26 MW solar project in Odesa started by Vasily Khmelnitskys UDP Renewables. Last summer, Acciona announced it was joining UDP to invest 55 million to boost capacity to 58 MW in the complex. UDP has posted on its website plans to further boost capacity this year to 175 MW. Called Gudzovka-Solar-1 and Gudzovka-Solar-2, the two solar stations are located in Artsyzky, Bessarabia, 100 km southwest of Odesa city.

                                Hollands AEG Power Solutions has signed a licensing agreement with Odesas S-Engineering LLC to manufacture solar inverters using AEG technology. A key component of solar plants, inverters convert DC power coming from a solar panel into alternating current, or AC, which can be fed into a commercial electrical grid. The first inverters to be produced in Ukraine, the AEG inverters will be eligible for slightly higher green tariffs, reserved for Ukrainian-made renewable energy products.

                                Singapores Delta Wilmar CIS LLC plans a major expansion of its facilities at Yuzhne: a new shipping berth, a soybean processing plant, and storage and handling facilities for shipping bulk agricultural cargo. In coordination, the Sea Ports Authority plans to dredge the approach channel to the new pier. The new plant will be capable of crushing 2,000 tons of soybeans a day. The terminal will store 40,000 tons at a time.

                                A unit of Wilmar International, one of Asias largest agribusiness groups, Delta Wilmar is expanding its agro products handling capacity at Yuzhne, Ukraines biggest port, to 1.2 million tons a year. Rajvis Veckagans, chairman of the Ports Authority, said: This project with Delta Wilmar CIS will create 200 new jobs in the port, and increase the processing capacity of agricultural products by 600,000 tons per year.

                                Nibulon, the grain producing and exporting giant, expects to open in June its newest river port, in Ternivka, Zaporizhia region, on the Ploska Osokorivka river, a Dnipro tributary. Nibulon wants to build a Black Sea terminal in Oleksandrivka, but the company waits for permits from Kherson region authorities. Docking at a string of private ports on the Dnipro, Nibulon barges made 660 trips last year, moving 2.8 million tons of grain and oilseeds, a 24% jump over 2017.

                                Ukrainian authorities want to restore the Dnipro to its Soviet-era role as Ukraines Mississippi. Meeting with Kyiv region farmers on Tuesday, Infrastructure Minister Volodymyr Omelyan noted that river cargo volumes have tripled since 2013, to 10 million tons. And this is only the beginning, he promised. It is cheaper, more convenient, and, in the end, it is more logical.

                                The low design of Russias Kerch Strait bridge cut by one third the list of ships that historically served Mariupol, asserts Vadym Chernysh, the minister responsible for displaced people from the occupied territories. Russia restricted the height of vessels: from now on, vessels like the Panamax cannot pass through the channel, he said, adding that metal exports from Mariupol are down by 140,000 tons a month. In addition, he said, the bridge pylons have changed currents, causing silting problems. Russias ports on the Azov have half the depths of Ukraines ports and are used largely for fishing.

                                A pilot program of private freight trains will start in Ukraine this year, Minister Omelyan promises. Private fleets of freight cars are increasing, but private locomotives have been banned. After the Rada rejected a private train bill in December, the government submitted a new one on Jan. 31. Without going into details, Omelyan told the Kyiv region farmers: "This year, in the experimental mode, we are introducing private traction on the railroad." Earlier, he told UNIAN the pilot program could involve a major international rail operator working on routes that are not profitable for Ukrzaliznytsia.

                                State railroad freight cars will increasingly be leased through ProZorro, the electronic auction platform. Omelyan told the farmers: The price may fluctuate depending on supply and demand. Electronic auctions are anti-corruption protection.

                                To test private companies running train stations, Ukrzaliznytsia plans to transfer Khmelnitsky and Mykolaiv stations to private management this year. Handling 1.6 million passengers last year, Khmelnitsky is Ukraines ninth busiest station. Mykolaiv was not in the top 10. The state railroad is working with the EBRD and the World Bank to benefit from models that work well elsewhere. Experimenting with these two relatively small stations is a warmup to the real prize: private management of Kyivs Central Station. The busiest of Ukraines 1,300 rail stations, Kyivs Central Station handled 23.4 million passengers last year.

                                Ukraine is closing the nations air space to Boeing 737-8 MAX and 737-9 MAX. The measure puts Ukraine in line with the EU, which suspended use of the aircraft after two fatal crashes. No Ukrainian airline uses the new, fuel saving passenger jets. Ukraine International Airlines plans to receive three this year, including one within two weeks.

                                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:

                                Read More News on