News (#11 November 2019)

Biznews

Renewable Energy

More than EUR 2 billion invested in green energy since start of 2019

More than EUR 2 billion was invested in more than 2,500 MW of new clean electricity capacities put into operation in Ukraine in the first 9 months of this year.

In particular, during this period these new facilities were installed: over 2,000 MW SPP; almost 400 MW WPP; about 120 MW SPP in households (for 6 months of this year); 24 MW biogas facilities; 13 MW small hydropower facilities, and 4 MW biomass facilities.

According to data from the State Agency on Energy Efficiency and Energy Saving of Ukraine, these new facilities doubled the total capacity of renewable electricity in 9 months: from about 2,300 MW as of the end of 2018 to about 5,000 MW as of 1 October.

Competition

Antimonopoly Committee fined two companies owned by Renat Akhmetov

The Antimonopoly Committee of Ukraine has found violations of the law on economic competition protection committed by Corum Ukraine LLC and Research and Production Company Mining Equipment JSC during their participation in three public procurement procedures conducted by the state-owned enterprise Lvivvuhillya. Corum Ukraine LLC was fined the sum of UAH 53 million, Research and Production Company Mining Equipment JSC UAH 3.3 million.

Bidding was conducted on the ProZorro system, with the customer intending to acquire coal-cutting machines for coal mining, elevators and conveyors to a total value of UAH 330 million.

Trade Policy

USA imposes duties worth USD 7.5 billion on imports from EU

On 18 October the Executive Office of the President of the United States introduced new duties worth USD 7.5 billion on European import in response to EU subsidies granted to the aviation giant Airbus.

The Office got the green light after the World Trade Organization ruled that the USA could impose tariffs worth USD 7.5 billion to compensate for the damages caused to Boeing by unlawful aid provided to Airbus by the EU.

The USA will impose additional 10% of duties on European aircraft and 25% on a number of agricultural and industrial products imported from the EU.

The list of goods subject to additional duty includes cookies, salami, butter and yogurt, sweaters, pullovers, cashmere and wool clothing, olives from France and Spain, wine, sausage and German coffee.

EUUkraine trade turnover rose by 9% and reached EUR 40 billion

In 2018 EUUkraine trade turnover increased by 9%, and 42% of total Ukrainian exports went to the EU.

This is stated in the third annual report of the European Commission on the implementation of 35 major trade agreements concluded by the EU with 62 partner countries, including Ukraine.

It is noted that over the past year Ukraine made some progress in implementing the Free Trade Agreement with the EU in some industries. The EU welcomes, in particular, the new draft law On Public Procurement.

Positive dynamics are also seen in the implementation of regulatory reform and in alignment of standards with EU provisions, while activities on adapting sanitary and phytosanitary standards, in the fields of customs cooperation and trade facilitation, are in progress.

Meanwhile, the European Commission noted that Ukraine needs to strengthen the protection of intellectual property rights and adopt legislation compliant to international standards.

It is also necessary to adapt state aid rules that conform to European ones.

State Policy

The Cabinet of Ministers plans to close more than 1,000 state-owned enterprises

The Cabinet of Ministers plans to privatize hundreds of state-owned enterprises and to close more than a thousand within the next 5 years. This is stated in the governments action program published on the website of the Ukrainian Parliament. It is planned to establish the National Welfare Fund to manage strategic state-owned enterprises.

We will develop property policies to include a clear definition of the purpose of state ownership and key performance indicators for all state-owned enterprises. We will turn all state-owned enterprises into private companies conducting commercial activities by transforming them into joint-stock companies, the program goes on to say.

The Cabinet of Ministers also plans to attract investors to state-owned banks to reduce the states share in the banking sector to 20%. It currently exceeds 50%.

Government instructed state giants to sell excess property

The Cabinet of Ministers instructed Ukrzaliznytsya, Ukrposhta and Naftogaz of Ukraine to find and to sell or lease out excess property included in the balance sheets of these enterprises or their subsidiaries.

The mentioned enterprises and other key executive bodies should carry out a detailed analysis and audit of their balance sheets (buildings, structures, etc.), balance sheets of their subsidiaries and entities established by them, and determine the costs and benefits of maintaining excess assets in view of strategic development plans.

Property classified as excessive or non-core for activity should either be sold transparently or leased out at a market price through ProZorro. Sales, the government instruction said.

This will apply at first to loss-making and non-core enterprises and property. At the same time, when deciding on social and cultural facilities, it is planned to ensure an individual approach to each of these taking into consideration the opinions of the communities where these facilities are located.

Cabinet of Ministers established Commission on Business Protection

At its meeting held on 16 October the Cabinet of Ministers established a Commission on Business Protection. The new body will analyze the state of affairs and causes of problems encountered by business when implementing public policy.

The commission will also study the activities of central and local public authorities to create better conditions for business protection against unlawful influence of an authority, agency or public officer.

At a briefing held after the Cabinet of Ministers meeting, Prime Minister Oleksiy Honcharuk urged business representatives to inform the government about offenses and corruption using social networks and official channels.

Banking & Finance

EBRD and EU allocated EUR 70 million to three Ukrainian banks

Raiffeisen Bank Aval, ProCredit Bank and OTP Bank signed a loan agreement with the European Bank for Reconstruction and Development and the European Union amounting to almost EUR 70 million in UAH equivalent under the EU4Business Local Small Business Financing Program.

In particular, Raiffeisen Bank Aval will receive a loan in the amount of EUR 25 million in UAH equivalent, ProCredit Bank EUR 20 million in UAH equivalent, OTP Bank USD 25 million in UAH equivalent.

The total limit of the program is up to EUR 120 million in UAH equivalent.

These funds will be available to be used for investment as well as for the working capital of SME.

Oil & Gas

Ukraine increased capacities for gas import from Poland

Ukrtransgaz has completed a range of construction and installation works on the connection of a new technological section of the pipeline at the Komarno compressor station (Lviv Region).

The projected capacity of the upgraded site will be 15 million cubic meters per day in averse mode and 18 million cubic meters per day in reverse mode from Poland.

The updated configuration of the linear section of the gas pipeline makes transportation of blue fuel in both averse and reverse modes between Ukraine and Poland possible. The reconstruction will increase both transportation capacity and maneuverability and will ensure safe and uninterrupted heating season 2019/2020.

Conduct of the reverse mode test run, which will be the final stage of works completion at the facility, is planned to be performed by the end of October.

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