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Business news from Ukraine

RECONSTRUCTION OF ODESA-RENI ROAD TO BE COMPLETED IN 2018 – PRESIDENT

The reconstruction of the Odesa-Reni road (M-15) will be completed in 2018, Ukrainian President Petro Poroshenko has said.
“I am confident that next year we will complete the construction and repair of the last 90 kilometers of the road and get the road to Romania and a large transport corridor that will give a second wind to settlements, towns and villages that are located along the road. Business, tourism, economy, and production will be developed,” he said at a meeting with residents of the village of Mayaky, Biliaivka district, Odesa region, on Thursday.
He noted that this result had been achieved due to the realization of the so-called “road experiment,” according to which 50% of the funds received from over-fulfilment of the plan for regional customs receipts are used for the repair of roads in a respective region.
At the same time, Poroshenko noted a great role of the regional authorities in the reconstruction of the Odesa-Reni road.
As reported, in September 2015, Poroshenko signed law No. 666-VIII on amendments to Section IV “Final and Transitional Provisions” of the Budget Code of Ukraine regarding conducting an experiment in Odesa, Volyn, Lviv and Chernivtsi regions for the financial support for reconstruction, repairs of public roads of national importance. The legislative initiative is designed to ensure financing for the reconstruction of a number of highways, including the Odesa-Reni road.
A total of 50% of over-target monthly indicative customs payments collected for customs clearance of goods in Odesa, Volyn and Lviv regions has been earmarked for use under the law.
In December 2016, the Verkhovna Rada expanded to all regions of Ukraine the experiment on financial support for the reconstruction and repairs of public roads of state significance at the expense of part of customs payments.

EBRD TO ISSUE EUR9 MLN TO KREMENCHUK FOR ENERGY EFFICIENCY

The European Bank for Reconstruction and Development (EBRD) will issue a EUR9 million loan as part of the Public Sector Energy Efficiency Financing Framework (PSEEF) program to Kremenchuk (Poltava region) with the population of approximately 220,000 people.
According to a press release of the EBRD, the funds will be provided to the city’s municipal enterprise Kremenchuk Municipal Energy Service Company and will help achieve annual energy savings of 19.5 GWh (or EUR1.3 million in monetary terms) in 66 buildings across the city.
“The EBRD is providing a financing package of EUR9 million, which will consist of the bank’s long-term loan of up to EUR6 million, a EUR1.5 million concessional loan from the Clean Technology Fund (CTF) and a EUR1.5 million grant from the EBRD Shareholder Special Fund (SSF),” the document reads.
According to the report, the municipality of Kremenchuk was the first in Ukraine to receive funds under the PSEEF program approved by the EBRD on December 13, 2017. In general, the program consists of EUR100 million of EBRD financing and EUR15 million of the concessional co-financing from the Clean Technology Fund.
The report says the city has over 120 public buildings, which consume twice as much energy compared to similar buildings in central Europe. The majority of them require thermal insulations, modernization of the energy distribution system, installation of individual heating substations, windows replacement and many other similar measures.
“Total investment needs of public buildings in Ukraine are estimated to be up to EUR5 billion. They can potentially offer a significant energy cost savings of up to 60%. The project will also be a good incentive for the construction industry and the employment in the region,” EBRD Director for Ukraine Sevki Acuner said.

ODESA REGION AGREES ON LARGE-SCALE COOPERATION WITH CHINESE PROVINCE OF JIANGXI

Head of Odesa regional administration Maksym Stepanov and vice governor of the government of Jiangxi Province Xie Ru have signed a letter of intent to establish cooperation between Odesa region and the Chinese province.
“I know that agriculture is developing at a high level in Jiangxi. And you have interesting projects for processing agricultural products that we could jointly implement. I hope that our meeting will lead to a strong relationship between Odesa region and Jiangxi province,” the press service of the regional administration quoted Stepanov as saying following the meeting, which was held on Wednesday.
In turn, vice governor Xie Ru stressed that Ukraine and China should become strategic partners and noted the beauty and prospects of Odesa region.
“After the start of construction of the new Silk Road, our relations with Odesa region should deepen. Your region has access to the sea, beautiful nature and rich resources – this is very important,” said the vice governor of Jiangxi Province.
After finalizing the terms, the parties plan to develop cooperation in trade, construction of basic infrastructure, investment, science and technology, industry, agriculture, education and culture.

AGRICULTURE MINISTRY MULLING CREATION OF GUARANTEE AGENCY FOR LENDING TO AGRARIANS

A guarantee agency can be created for lending to agricultural producers, First Deputy Minister of Agrarian Policy and Food Maksym Martyniuk told Interfax-Ukraine.
“We did not ask for this postponement [of the moratorium on the sale of agricultural land], but since lawmakers decided so, then in the next 12 months we will concentrate on the establishment of the State Agricultural Guarantee Agency – this is a working name,” he said.
According to him, the said structure can be a state financial institution that would act as a guarantor for loans that agrarians want to borrow.
“The agency’s charter capital can be formed at the expense of 1% of GDP allocated for the support of the agro-industrial complex. If we allow [farmers] to get loans and they will be cheap, I think this will remove the populist question: “Where does the farmer take money to buy land?” he added.
Ukraine’s parliament extended the moratorium on the sale of farmland until January 1, 2019.