- Naftogaz plans to resume purchases of Russian gas next month, according to Andriy Kobolyev, CEO of Ukraine’s state energy company. Ukraine stopped buying gas from Gazprom in Nov. 2015. Six weeks ago, a Stockholm arbitration contract ruled that Naftogaz had to fulfill a purchase contract, but at current European market prices.
- China Railway International Group officials have discussed subway and bridge projects in Kyiv with Dmytro Davtyan, deputy head of Kyiv City Administration. The City’s press office said Wednesday the Chinese “are ready to invest large funds in the projects.” Davtyan said: “Most technologies used by Chinese companies are high-tech and use advanced solutions.’
- IT service exports increased by 7.6% last year, to $2.5 billion, according to the National Bank of Ukraine. Offering a different numbers, IT Ukraine Association, an industry group, reports on its website, that Ukraine’s exports of IT services grew by 20% in 2017, hitting $3.6 billion.
- Ukraine’s Export Credit Agency has been approved by the Cabinet of Ministers with a preliminary budget of $7 million. Natalia Mykolska predicts the agency will open by the end of the year. In 2016, the Ministry of Economic Development and Trade estimated that 16.5% of Ukraine’s exports would be eligible for support.
- To reverse the decline in the nation’s dairy herd, Kyiv is offering in $90 million in low interest loans this year for construction of dairy farms and a $50 a head bonus for each milk cow kept by a household for one year. As the rural population ages, elderly villagers are butchering their cows rather than milking them. Prime Minister Groysman vowed Wednesday: “Throughout this year, mass construction of farms, dairy-commodity complexes will begin. We will increase the number of livestock and the volume of products produced.”
- Kyiv is expanding a program to subsidize purchases of locally made farm machinery. With $35 million set aside for the program, the government will rebate 25% of the purchase cost this year, up from 20% last year. The localization level of the equipment must be at least 35%. The Ministry of Agrarian Policy and Food estimates this will boost local equipment sales by 20%.
- President Poroshenko has dismissed Boris Lozhkin as chairman of the National Investment Council and has appointed Dmytro Shymkiv as acting secretary. Shymkiv continues as Deputy Chief of Staff of Presidential Administration. The Council Board includes top executives of Turkcell, Marubeni, Sumitomo and General Electric.
- The Rada has approved a bill creating a central registry of all borrowers with debts over $13,500. The central bank will maintain the registry and release information on debtors on the request of banks. Concorde Capital’s Alexander Paraschiy writes: “This is an encouraging development for Ukraine and its banking system…a centralized transparent database on the quality of borrowers will reduce the risks and costs of banks related to issuing loans to new clients...all in all, it should contribute to increased lending activity in Ukraine and better economic growth in the mid-term.”
- The European Bank for Reconstruction and Development is providing $50 million in guarantees to UkrSibbank for corporate client lending, UkrSibbank reports on its website. The EBRD program is largely aimed at agricultural clients. BNP Paribas S.A, of France. Owns 60% of the bank's charter capital. The EBRD holds 40%.
- The EBRD will share risk on loans made by Raiffeisen Bank Aval to SMEs totaling €20 million through 2020. The EBRD will cover up to 65% of risks for individual clients. Volodymyr Lavrenchuk, CEO of Raiffeisen Bank Aval, said: “Last year, we issued loans to more than 1,100 companies, including 300 new clients. The program is an opportunity to double our support for Ukrainian companies in their business development.” Raiffeisen Bank International, of Austria, owns 68.28% of Raiffeisen Aval. The EBRD owns 30%.
- The European Investment Bank has issued EUR9 million in guarantees to Ukrgasbank to support lending to small and medium-sized enterprises. The money will guarantee up to 70% of a loan. With this multiplier effect, the total volume of the loan project is estimated at EUR77 million. The Finance Ministry owns 95% of the Ukrgasbank, the fourth largest bank by assets of the nation’s 88 banks.
- An IMF team will arrive in Kiev on Monday to spend the week consulting with Ukrainian authorities, according to Goesta Ljungman, IMF Resident Representative here. Almost three years ago, the IMF approved for Ukraine a four-year Extended Fund Facility worth $17.5 billion. Since then Ukraine has received almost half -- $8.4 billion.
- AutoHUB, the new one stop service for importing cars at Odesa seaport, is processing cars at almost four times the rate before the service started, last September. In January, 1,800 cars were processed by AutoHUB, which groups in one building seven government and private agencies, including customs and border guards. Before the center opened, imported cars were processed at the rate of 485 per month.
- Antonov sold $218 million worth of planes, parts and service last year, 1.6 times more than in 2016. Last year, Ukraine’s aircraft manufacturer recorded about $6.7 million in profit. With 10,000 employees, Antonov pays an average monthly wage of $317, the Kyiv-based company reports.
- Through June, Lviv Airport is increasing by two thirds the number of foreign cities with direct scheduled service, the airport’s website reports. In addition to three Italian cities added in December, the airport is adding Barcelona, Batumi, Brno, Dortmund, Gdansk, Katowice, London Luton, and Olsztyn Poland. With these 10 new cities, Lviv will have scheduled flights to 25 foreign destinations, almost all in Europe. Starting March 1, Turkish Airlines will increase its Lviv-Istanbul flight to daily.
- Ukrainians have won visa free entry to yet another nation – Antigua and Barbuda in the eastern Caribbean. With direct flights from London, Milan, New York and Miami this island nation of 100,000 inhabitants is diversifying from its historic dependence on American tourists. As signed by the ambassadors of the two nations last week in Washington, the visa free regime allows Ukrainians to stay in Antigua and Barbuda for 90 days in any 180-day period.
UBJ is now free access. Please relay our link to your friends and business partners who want clear, reliable business information about Ukraine. -- www.theubj.com
UBJ a.m. 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