Ukraine's banking system lost $901 million in 2017, National Bank of Ukraine reports. PrivatBank accounted for 94% of the losses. The 2016 banking system losses were six times greater than 2017. The central bank also reported that 14 banks closed last year, leaving 82 solvent banks. Last year, 18 banks were unprofitable, almost half the number of 2016 – 33.
Sanctions against Russian banks should be extended beyond their expiration next month, Vitaliy Vavrushchuk, director of the National Bank of Ukraine’s Financial Stability Department told reporters Wednesday. Last March 17, President Poroshenko imposed a one year ban on Ukrainian affiliates sending money to their Russian headquarters. Vabrushchuk said he expects that new investors will buy the banks or they would phase out their operations here. In December, VS Bank, Sberbank's Ukrainian subsidiary, was sold to Sergiy Tigipko’s TAS group. The remaining subsidiaries are still in Russian ownership.
Ukrainian engines will power three rockets into space this year, Space Flight Now reports. In May and November, RD-181 engines from Dnipro’s Yuzmash will launch Antares Orbital ATK satellite carrier rockets from NASA’s Wallops Flight Facility in Virginia. In September, a Yuzmash RD-843 engine will launch the fourth stage of a Vega rocket, fired from the European Space Agency’s space center in Kourou, French Guiana.
President Petro Poroshenko has appointed Pavlo Bukin, CEO of Ukrspecexport, to run Ukroboronprom, the country's state run manufacturer of military hardware and weapons. At the same time, the President wrote on Facebook, Ukroboronprom will become Ukraine's first state-owned industrial association to be audited by an international audit firm. Last year, Ukroboronprom reported $55 million in profit on $1 billion in sales. To help cut corruption at the arms maker, the Cabinet of Ministers appointed last month an American, Anthony Teter, to the Ukroboronprom supervisory board. A US Army veteran and former Director of Advanced Defense Research Projects Agency, Teter has implemented management projects in Ukraine’s military industrial complex since 2016.
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.
Danish Foreign Minister Anders Samuelsen announced in Kyiv on Wednesday €65 million in aid to Ukraine under the Danish Neighborhood Program. Funding projects in human rights, democracy and sustainable economic growth, the Program is reserved for two countries, Ukraine and Georgia. On June 27, Copenhagen will host the second international conference on reforms in Ukraine. The first was held last year in London.
Over the next five years, Ukraine wants to cut gas consumption by five billion cubic meters, or 18%, by expanding use of biomass, according to Serhiy Savchuk, head of Agency on Energy Efficiency. Over the last four years, Ukraine cuts gas consumption by six billion cubic meters. That was largely due to loss of population and heavy industry in the east and use of energy saving technology elsewhere. Now, to replace gas, the government promotes burning biomass – crop residues and bark and branches from logging operations.
Last year, Ukraine paid Russia $369 million for fuel for its 15 nuclear power plants. At the same time Energoatom paid Sweden $164 million for essentially the same fuel. Ukraine is gradually reducing Russia’s portion, from 69% last year to 45% this year, Energy Minister Igor Nasalik said recently.
Orbis Asset Management of San Francisco intends to invest $ 30 million in Imperia-Agro, a Kryvyi Rih manufacturer and distributor of seeds, plant protection agents, and mineral fertilizers. Yury Otsbrik, founder and CEO of Imperia-Agro, said: “We intend to create a national leader in lending and financial services for the small and medium-sized farmer in Ukraine." From the US, Orbis CEO Vincent Ordonnyu said: "We believe that Ukraine today is the most attractive market for investment in the agricultural sector.”
Crop receipts, a pre-harvest financial instrument allowing farmers to use future harvests as collateral, will inject up to $520 million in credit into Ukraine’s small-scale farm sector through 2020, predicts the World Bank’s International Finance Corporation. A pilot project for one tenth that amount used 200 crop receipts as collateral in eight regions in 2016 and 2017. IFC has worked with Ukraine’s government to develop necessary legislation and to create a registry to track crop receipts easily and transparently. Switzerland’s State Secretariat for Economic Affairs provides financial support for the project. Jason Pellmar, IFC’s Ukraine head, says: “Our aim is to encourage more private investment to unlock [agricultural] potential, expanding access to finance for smaller farmers and fostering innovation in the farming sector.”
In April, Sinohydro Corp, a Chinese construction company will start work building a 23 km concrete highway bypass around Zhytomyr, Infrastructure Minister Volodymyr Omelyan reports. Construction of the four-lane, $50 million highway will involve building four bridges and four interchanges. Road work will parallel – and in some cases overlap – the existing E-40 highway, the main road between Kyiv and Lviv.
Adjusted for inflation, retail sales in January were up almost 10%, compared to January 2016, the State Statistics Service reports. Retail sales were $2.5 billion. By region, the biggest increases were in: Zakarpattia -- 21.8%; Sumy -- 13.9%; Cherkassy -- 13.8%; Chernihiv -- 12.4%; Mykolaiv --12.1%; and Vinnytsya -- 12%. The lowest increase was in Rivne -- 3.6%. No region recorded a sales decrease.
The average meat basket cost 40% more at the end of January, compared to the same time one year ago, Alexei Doroshenko, director of the Ukrainian Association of Suppliers of Retail Chains, writes on his Facebook page. This price increase is almost triple January’s year over year inflation rate of 14.1%. Reason include: reduced supply due to increased exports and great demand due to increased in salaries, pensions and remittances from workers in the EU.
An ‘Open Skies’ agreement with the EU can only be signed after a Brexit, Infrastructure Minister Omelyan wrote on Facebook after a meeting in Kyiv with visiting EU Transport officials. Open Skies, or a common aviation space between the EU and Ukraine, would enable Ukrainian and European airlines to operate freely in the airspace of the EU and Ukraine.
UBJ.am. is reported by UBJ Editor in Chief James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow bureau chief. For comments and story tips, Brooke is reachable at email@example.com