UKRAINEINVEST ISSUES THE BUSINESS WEEK, A FREE ON-LINE PUBLICATION CONTAINING A WEEKLY SUMMARY OF IMPORTANT BUSINESS NEWS IN UKRAINE, FOR 26 FEBRUARY, 2018.
- Drones monitor about 10% of Ukraine’s farmland, DroneUA co-founder Valery Yakovenko estimated recently at AgriTech in Ukraine and the World. At the conference, Oleg Bakhmatyuk, owner of Ukrlandfarming, told Interfax that he is experimenting with drones on his agroholding’s land bank of 570,000 hectares. He said drone prices should go down, from $1,000 today to $300 by 2023. When that happens, he said, drones will become common in farming.
- Ukraine was the fourth largest source of imported food for the EU last year, according to the European Commission. The ranking was Brazil (EUR 11.8 billion), the USA (EUR 11.0 billion), Argentina (EUR 5.7 billion), and Ukraine (EUR 4.7 billion).
Banking & Finance
- OPIC has signed a deal to insure $250 million in fixed-rate bond securities issued in US capital markets for a major Ukraine project. Because of this insurance, Moodys rates the bonds Aa2, well above the government of Ukraine’s Caa2 rating. The money raised will go to building a Central Spent Fuel Storage Facility at the Chernobyl site. This storage facility will ultimately save Ukraine “hundreds of millions of dollars” now spent on storage in Russia, says Energoatom, Ukraine’s nuclear power plant operator. Following Overseas Private Investment Corporation guidelines, the project will generate $225 million of procurement of US-made goods and services. Holtec International of New Jersey will supply storage casks, other equipment, and training to the project over five years.
- Horizon Capital, the Kyiv-based private equity firm, has guided one of its investments, Purcari Wineries PLC of Moldova, through an IPO on the Bucharest Stock Exchange. Investors oversubscribed the offering more than four times over. Horizon reports: “As a result of this successful public launch, Horizon Capital, on behalf of its fund EEGF II, has sold a 40.9% stake in Purcari, realizing a 3.2 times gross cash-on-cash return on the sale of these shares.” Horizon retains 22.7% stake in the winery, which has operations in Moldova and Romania.
- Privat Bank plans to increase lending to small businesses this year by two thirds over last year, to $178 million, the bank says in a press release. With more and more Ukrainians opening small businesses, the bank, Ukraine’s largest, says that it added 76,000 new small business clients last year.
- Prime Minister Groysman promised an international conference Tuesday that his government will keep working with the IMF, Ukrinform reports. He said: «We will continue to cooperate with the IMF. We will support macro-financial stability, attract investment and increase exports.»
- Last year, nearly $1 billion worth foreign aid projects were implemented or agreed upon in Ukraine, reports the Economic Development and Trade Ministry. Of the 453 foreign aid projects that were implemented, the largest donors were the US -- $370 million -- and the EU -- $310 million.
- Colt Canada, the main supplier of small arms to Canadian Forces, is chasing a deal that could see Ukraine order up to 100,000 rifles, The Ottawa Citizen reports. In December, Canada’s government changed Canada’s arms export rules to allow the sale of automatic weapons and other small arms to Ukraine. In January, representatives of Colt traveled from their Kitchener, Ontario headquarters to Kyiv to discuss a sale. Ukraine is upgrading its weapons to NATO standard. In September, Defense Minister Stepan Poltorak talked with Canadian Defense Minister Harjit Sajjan about Canada building an ammunition plant in Ukraine.
- The number of registered unemployed people dropped by 50,000 in January, to 378,900, according to the State Statistics Service. Officially, the unemployment rate is 1.4% and there are 1 million job vacancies. With signs in the Kyiv metro offering Ecolines bus tickets to Poland for $15, many unemployed people now travel to the EU for temporary jobs.
- Exports to Europe grew by 21%, outstripping Ukraine’s global export increase of 16%, Prime Minister Groysman reports. In a sharp turn around from earlier dependence on Russia, EU countries bought 40.5% of Ukraine’s exports last year, or $20 billion.
- The EU will partially finance construction of the Gdansk-Odesa ‘Go Highway,’ Infrastructure Minister VolodymyrOmelyan said after meeting Tuesday in Kyiv with Henrik Hololei, the European Commission’s Director-General for Transport. Omelyan said: «Today we have learned that one of the financial instruments of the European Union is ready to finance a part of Go Highway project to connect the Baltic Sea and the Black Sea.” Ukraine is spending $140 million on the highway this year.
- Tenders for Ukraine’s first modern toll roads are to be launched by the end of this year, Infrastructure Minister Vladimir Omelyan told reporters Tuesday. He said the most likely toll road candidates are: from Kyiv’s ring road to BilaTserkva, the first, highly congested 75 km stretch of the highway to Odesa; and Lviv to Krakovets, Ukraine’s busiest border crossing with Poland.
- Prykarpattia, a state-owned health resort in the Carpathian mountain town of Yaremche is to be auctioned off on March 12, with an asking price of $1.9 million. The buyer must reopen the resort within one year. A historic resort town, Yaremche is a one hour drive south of Ivano-Frankivsk.
Science & IT
- Eighteen Ukrainian information technology companies won spots on the International Association of Outsourcing Professionals annual list of top tech firms, The Global Outsourcing 100. Marking a steady progression, the 18 are up from 13 last year, which were up from 10 in 2015.
- Ukraine is drawing nearer to a visa-free regime with South Korea, Interior Minister ArsenAvakov posts on his Facebook page from Seoul. He wrote: «Do we need the visa-free regime with the 11th world economy? The question is rhetorical! I am very glad that we have managed to come close to an agreement on this issue.» A visa-free regime might prompt Ukraine International Airlines to start service from Kyiv Boryspil to Seoul Incheon.
- When roadwork season starts next month, the Infrastructure Ministry intends to start repairing 4,000 km of roads this year, according to Infrastructure Minister VolodymyrOmelyan. Including international aid, this year’s road repair budget is a record $2 billion.
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