Business news from Ukraine

UKRAINE’S INSURERS RAISE PREMIUM COLLECTION BY 20%

The insurance companies of Ukraine that are members of the Motor (Transport) Insurance Bureau of Ukraine (MTIBU) in January-May 2018 increased collection of insurance premiums on compulsory insurance of vehicle owners’ civil liability (OSAGO) by 19.8% compared with the same period in 2017, to UAH 1.801 billion. The number of OSAGO contracts for the five months grew by 3.57, to 3. 249 million, the MTIBU’s website said.
In addition, the total amount of insurance claim fee payments on internal insurance contracts rose by 18.8%, to UAH 905 million. In particular UAH 132.8 million was paid using Europrotocols, which is 46.1% more than in January-May 2017.
The bureau also recorded a 0.04% increase in the number of settled insurance cases, to 57,117, of which 14,800 (an increase of 14.3%) using Europrotocols.
The MTIBU is the only association of insurers that carry out compulsory insurance of vehicle owners’ civil liability for harm caused to third parties. Its members are 56 insurance companies, in particular full members of the bureau that have the right to sign Green Card contracts are nine companies.

UKRAINE’S ENERGY MINISTRY WANTS TO RESUME JOINT CONSTRUCTION OF NUCLEAR FUEL PLANT WITH RUSSIA

Ukraine’s Ministry of Energy and Coal Industry considers it necessary to resume joint construction of a nuclear fuel plant in the country with Russia’s TVEL. This is discussed in a letter made available to the Kyiv-based Interfax-Ukraine news agency signed by Minister Ihor Nasalyk, which was sent to First Deputy General Director of Rosatom Kirill Komarov. “Taking into account the existing high level of cooperation in the field of nuclear energy, the prospects for increasing cooperation, as well as the need to resume a number of joint projects, in particular, the project to launch TVEL production in Ukraine, we propose holding a meeting in Brussels from July 9 to July 12, the letter says.
As earlier reported, before the annexation of Crimea by Russia, Ukraine planned the construction of a plant in Kirovohrad region to produce nuclear fuel based on the technology developed by the Russian fuel company TVEL. Pr JSC named “Plant for the production of nuclear fuel” was created, in which Ukrainian state-owned concern “Nuclear Fuel” owns 50% plus one share, and TVEL has 50% minus one share. It was assumed that in 2015 the plant was to start producing fuel elements and fuel assemblies, as well as zirconium components and components made of stainless steel, and in 2020 it was to start manufacturing fuel powders and tablets.
The total cost of the construction of the plant was estimated at $450 million.
In February 2016, Ukraine’s State Nuclear Regulatory Inspectorate turned down the application of the “Plant for the Production of Nuclear Fuel” for a license for the construction of the fuel plant. At the same time, TVEL’s annual report stated its readiness to return to the project in Ukraine on the same terms.

STATE-OWNED UKRENERGO STARTS MODERNIZATION OF KRYVYI RIH SUBSTATION

State-owned enterprise Ukrenergo has launched the modernization of the Kryvyi Rih 330 kV substation, the press service of the company has reported. “The works are fulfilled under the contract on technical re-equipment of the Kryvyi Rih 330 kV and Dnipro-Donbas 330 kV substations signed between Ukrenergo, international consortium GE Grid GmbH (Germany) and ChornomoretsEnergoSpetsBudMontazh LLC (Ukraine),” the company said. The project receives financing from a loan granted by the German government under Ukrainian sovereign guarantees.
“All high-voltage equipment, protective relays and automatic equipment will be replaced and an automatic process control system will be introduced during the modernization of the 330 kV switchyard at the substation,” Ukrenergo said. As reported, Ukrenergo launched a new 125 MVA auto transformer AT-4 at the Vinnytsia 750 kV substation and a new 125 MVA auto transformer AT-1 at the Poltava 330 kV substation.
Ukrenergo operates trunk and interstate power grids, as well as performs the centralized dispatching of the united energy system in the country. The company is a state-owned enterprise, it is subordinate to the Ministry of Energy and Coal Industry.

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PARLIAMENT PASSES BILL ON USE OF LARGE TRACTS OF FARMLAND

Ukraine’s Verkhovna Rada adopted draft law in the second reading and in general to resolve the issue of collective ownership of land, improving land use rules and stimulating irrigation. Some 236 lawmakers voted for the bill, 11 more than the required minimum of 226 votes. The bill introduces the concept of tracts of agricultural land. Within such tracts agrarians will have the opportunity to exchange plots, conclude sublease agreements without the consent of landlords, rent field roads and optimize areas for cultivation. Agrarians who own/use more than 75% of the tract will have priority rights over other users of the tract.
The bill also defines the order of inventory of land plots, which is to take place prior to the creation of arrays. As expected, it will contribute to the updating of the State Land Cadastre. Its results will be approved by local authorities.
The document provides for the protection of the rights of farmers who improve and restore hydraulic reclamation systems. In addition, a mechanism of permanent or urgent land easements is being implemented to introduce measures for land reclamation, which can be established both by contract and by a court decision.
Users of land plots on which hydrotechnical reclamation is carried out have the right to claim compensation for the costs of hydraulic reclamation of adjacent land plots from their owners or users. According to the document, lands of collective agricultural enterprises whose activities are terminated shall be transferred to municipal ownership of a local community.

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UKRAINE’S STATE AIR TRAFFIC SERVICE AND BUSIN INSURER AGREE ON INSURANCE OF THREE PLANES

Ukraine’s State Air Traffic Services Enterprise (UkSATSE) and Busin Insurance Company (Kyiv) have concluded an agreement on compulsory aircraft insurance on June 27 (3 planes), according to information on the ProZorro portal. The bid was expected at UAH 3.127 million, Busin’s actual bid was UAH 2.920 million.
IC INGO whose bid was UAH 2.940 million also took part in the bidding.
UkSATSE was founded in 1992. The main mission of UkSATSE is to provide an efficient and safe air navigation services in the Ukrainian airspace and in the airspace over the high seas where the responsibility for providing air traffic services is delegated to Ukraine under the international agreements.
It services five areas of responsibility covering 774,569 km.

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OTP BANK PLANS TO INCREASE LOAN PORTFOLIO BY 33% IN UKRAINE

Kyiv-based OTP Bank is planning to increase its loan portfolio by 33.4%, to UAH 37.6 billion, in 2017-2020, OTP Bank Board Chairman Tamas Hak-Kovacs has said. “Our goal is to increase our loan portfolio by 33.4% by the end of 2020 to UAH 37.6 billion from UAH 25.1 billion as of the end of 2016. If we compare Ukrainian and Hungarian banks in terms of the number of branches and employees, Hungarian loan portfolios are five to six times larger than Ukrainian. And if we take German and U.S. [banks] for comparison, they have even much more credits. Thus the key task of OTP Bank is to build up credit financing,” he said in an interview with Interfax-Ukraine.
The banker added that OTP Bank was planning to increase its share in the segment of crediting for medium-sized and large businesses as well as to strengthen its leading positions in consumer crediting.
“Last year the bank introduced on the market its product Agrofactory for financing of medium-sized agricultural producers. At the end of the second quarter we entered the bid guarantee market – the bank issues bid guarantees for clients within just two hours… Our goal in retail business is to take a leading position in consumer crediting. In this context we resumed auto loan financing last year. Today we are working on the development of a new platform for entrepreneurs and microbusinesses,” Hak-Kovacs said.