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Business news from the Ukrainian League of Industrialists and Entrepreneurs

KYIVENERGO INTENDS TO TRANSFORM ENERGIA INCINERATION PLANT INTO A FULLY FUNCTIONAL PUMPED STORAGE POWER PLANT BY 2019

KYIV. Aug 27 (Interfax-Ukraine) – Public joint-stock company Kyivenergo (Kyiv), as part of its modernization plan, will ensure that Energia incineration plant will become a fully functional pumped storage power plant running on alternative energy by the end of 2018, the company’s press service has reported.

“This resolves two very urgent tasks: the provision of alternative energy to Kyiv and waste recycling,” the press service said, citing Kyivenergo CEO Yuriy Mahera.

At present, Kyivenergo has started the second stage of modernization of the incineration plant during which boiler four and the electric filter will be overhauled with a replaced heating surface, external pipelines, water eco-meter, and restored setting and insulation. Clamshells for cranes in the slag and solid waste sections will be bought. This stage would be completed by the end of the year.

The press service said that after the overhaul, the effectiveness of the boiler and waste incineration volumes would grow by 20%, and emissions would be reduced to 40-50% of the limits

By the end of 2018, all the boilers and electric filters of the plant are scheduled to be overhauled.

“This would result in the increase of solid waste incineration by 20% (from 235,000 to 280,000 tonnes a year) and heating production would grow by 60% (to 360,000 gigacalories a year). The Energia incineration plant would be able to supply heating and hot water to over 300 apartment blocks (120,000 apartments), and in the summer period – supply hot water to 700 apartment blocks (around 280,000 apartments). In general, Kyivenergo would invest UAH 210 million in the development of the plant in 2015-2018,” the report said.

In 2017-2018, Kyivenergo also plans to install a 4 MW turbine at the Energia incineration plant, which would generate 14 million kWh of electricity every year (this is enough to cover needs of around 30 apartment blocks). The company also plans to build a modern emission gas purification system in 2018.

Kyivenergo said that the company has finished the first stage of the plant’s reconstruction by building a pipeline through which heating from waste incineration is sent to the heating supply pipelines of the city (UAH 28 million of investment).

Energia incineration plant belongs to Kyiv city and it is under the management of Kyivenergo. Its annual waste incineration capacity is around 240,000 tonnes (Kyiv creates around 1.3 million tonnes of waste a year in general).

NBU’S FOREX RESERVES EXPAND TO $12 BLN – YATSENIUK

KYIV. Aug 27 (Interfax-Ukraine) – The forex reserves of the National Bank of Ukraine (NBU), which totaled $10.38 billion as of early August 2015, have expanded to $12 billion, Ukrainian Prime Minister Arseniy Yatseniuk said while opening a cabinet meeting in Kyiv on Wednesday.

He said that the World Bank on August 25 approved the provision of a $500 million IBRD loan to finance the Second Multi-Sector Development Policy Operation in Ukraine, which will be transferred to the government’s accounts by September 9.

“This opens the doors for additional financial resources which could be received from Japan – $300 million and other contributors,” he said.

Yatseniuk said that the World Bank could provide another $500 million under the Second Financial Sector Development Policy Loan (FSDPL2), which would also be transferred to the government’s accounts, which would create a cushion of financial stability.

He said that government has accumulated financial resources this year, taking into account possible threats from international financial markets, and at present, it has UAH 30 billion in the single treasury account, and UAH 35 billion in currency accounts.

“In general, the financial situation in Ukraine is rather stable, and all measures taken by the government jointly with our international partners show that there is [a large] enough financial cushion, and enough resources to retain stability,” Yatseniuk said.

UKRZALIZNYTSIA PLANS FOR CARGO SHIPMENTS REVENUE TO GROW BY 23.5% IN 2015

KYIV. Aug 27 (Interfax-Ukraine) – Ukrainian railways expect that in 2015, revenue from cargo shipments will total UAH 47.5 billion, which is 23.5% up on 2014, according to an explanatory note to the financial plan of railways which has been posted on the website of the Infrastructure Ministry of Ukraine.

The revenue will grow as the tariffs for cargo shipments within Ukraine have grown by 30% since February 1.

Revenue from cargo exports will total UAH 16.062 billion and cargo imports – UAH 4.832billion, while revenue from transportation within Ukraine will total UAH 15.904 billion.

According to the document, transit cargo will reach UAH 4.619 billion, which is 30.6% down on 2014 due to a decline in passenger transportation by 9.1% year-over-year. The share of passenger transportation of total revenue from transportation will be 8.9%.

The financial plan of Ukrainian railways for 2015 foresees an increase in tariffs for passenger transportation in Ukraine by 21% from June onward. Additional expenses are expected at UAH 251 million.

The share of revenue from the provision of auxiliary services of net revenue from sales of products will be 9.8% in the amount of UAH 5.131 billion. Other operation revenue in 2015 will be UAH 751.9 million, which is more than twice less than in 2014 due to drop in revenue from sales of working assets by UAH 177.6 million, revenues from sale and purchase of foreign currency – by UAH 17.9 million and operation exchange rate differences – by UAH 430.2 million.

Other financial revenues will total UAH 1.047 billion.

Total revenues in 2015 are planned to reach UAH 59.554 billion, which is 17.5% up on 2014.

BANKS ISSUE CREDITS WORTH UAH 357 MLN UNDER STATE ENERGY SAVING PROGRAM – OFFICIAL

KYIV. Aug 27 (Interfax-Ukraine) – Banks-participants of the state program to partially compensate the cost of credits taken for the modernization of heating efficiency and energy efficiency measures in the housing sector of Ukraine, since the start of its realization in 2014, and as of August 25, 2015, have provided 21,052 credits worth UAH 357 million, the State Agency for Energy Efficiency and Energy Saving of Ukraine reported on Wednesday.

The agency said that in the period from August 3 to August 25, banks-participants provided credits worth UAH 106.9 million.

As reported, with reference to agency head Serhiy Savchuk, as of August 17, 2015, banks-participants had provided 18,823 credits worth UAH 321.3 million.

By the middle of August 2015, state-run Oschadbank, Ukreximbank and Ukrgasbank were participating in the program.

GOVT APPROVES DRAFT AGREEMENT TO RECEIVE BENEFICIAL EUR 100 MLN LOAN FROM POLAND

KYIV. Aug 27 (Interfax-Ukraine) – The Cabinet of Ministers of Ukraine has approved the signing of an agreement with the Polish government on the provision of a loan by Poland under tied aid conditions.

According to cabinet resolution No. 855-r of August 19, 2015, Finance Minister Natalie Jaresko has been authorized to sign the agreement.

“The signing of the agreement would allow for starting the procedure of raising the beneficial loan of EUR 100 million to the Ukrainian national budget to realize investment projects in the country. The agreement foresees the provision of a loan to the Ukrainian government to finance projects on the development of border road infrastructure and checkpoints on the Ukrainian-Polish border, as well as other projects that would be agreed by the sides and financed under separate contracts between Polish exporters and Ukrainian residents,” reads a post on the cabinet’s website.

As reported, Prime Minister of Ukraine Arseniy Yatseniuk said in January 2015 that the Polish government had announced a 10-year crediting program worth EUR 100 million for Ukraine. In April, Yatseniuk said that Ukraine and Poland agreed to allocate half of the credit to building roads to checkpoints on the Ukrainian-Polish border.

TURNOVER OF IMPORTED CARGO SHIPMENTS BY RAIL TO UKRAINE IN 2015 TO BE LARGEST IN ALMOST 20 YEARS

KYIV. Aug 26 (Interfax-Ukraine) – Turnover of imported cargo shipments by rail to Ukraine in 2015 is projected at 19.336 billion tonne-kilometers, which is 2.1% up on 2014 and the largest since 1996.

According to an explanatory note to the financial plan of Ukrainian railways for 2015, which has been posted on the Infrastructure Ministry’s website, the key goods that will be imported to Ukraine are coal, fuel and ore.

Transit shipments in 2015 are projected at 29.34 billion tonne-kilometers, which is 4.2% down on 2014 and the smallest over the last five years.

The formation of the volumes of transit shipments took into account the relaxed customs control scheme for transit cargo in the Customs Union of Russia, Belarus and Kazakhstan, and almost 90% of Ukrainian transit is formed in these countries. The key transit cargo will be ore, fuel and coal.

Fuel shipments fell due to a decline in shipments of crude oil from Russia and due to partial reorientation to Russian ports.

Nitric fertilizer shipments from Russia decreased due to the small demand of foreign consumers, taking into account stagnation on the fertilizers market. Companies are reoriented to sell nitric fertilizers on the domestic market.

Exports shipments are planned at 89.262 billion tonne-kilometers, which is 5.2% down on 2014.

“The decline in exports shipments would be due to the fall in shipments of construction materials and coal, taking into account demand on the domestic market. Ore that is supplied to Ukrainian metal companies in the Anti-Terrorist Operation (ATO) zone would be exported. Transportation of stone would be reduced due to a fall in orders from Russian companies,” the note said.

According to the note, at present, loading of most metal plants located in eastern Ukraine is low due to a shortage of coke and iron ore.

“The main reason of the decline in shipments of coal is active hostilities and damaged infrastructure in the ATO zone where most coal dispatchers are located. In the past months mines that produce coking coal did not work. Moreover, due to damage of railway tracks, coal companies cannot ship coal washhouses and concentrate – to end consumers,” the note said.

Domestic shipments are predicted at 56.07 billion tonne-kilometers, which is 16.9% less on 2014. The core cargo would be coal, fuel, ore and construction materials.

In general, the financial plan for 2015 projects shipment of 335.445 million tonnes of cargo by rail, which is 13.9% down on 2014.