Business news from Ukraine

Business news from Ukraine

UKRZALIZNYTSIA INVESTS UAH 2.9 BLN IN DEVELOPMENT OF ELECTRICITY DISTRIBUTION SYSTEM DURING FIVE YEARS

The National Energy and Utilities Regulatory Commission (NEURC) at a meeting on December 1 approved a plan for the development of the electricity distribution system for Ukrzaliznytsia for 2022-2026, which provides for an investment of UAH 2.9 billion.
According to the plan, 76% of the UAH 2.9 billion should be invested in construction, reconstruction and technical re-equipment of power grids and equipment.
The main consumer of electricity, which is transmitted by the grids of Ukrzaliznytsia, as the operator of the distribution system, is transport. Over the past four years, the share of transport in the total structure of electricity consumption transmitted through the distribution system of the company was 80-83%.
Ukrzaliznytsia predicts an overall growth in demand for electricity in the next five years at the level of 0.45% annually.
At present, the total installed capacity of renewable energy installations (RES) connected to the grids of Ukrzaliznytsia is 143.35 MW.
According to the issued technical specifications, it is necessary to connect renewable energy generation facilities for another 301.93 MW to the distribution system of the company.
As reported, on September 30 Ukrzaliznytsia bought more than 4.9 million MWh of electricity at an auction from Energoatom state enterprise at a price of UAH 1,105/MWh, which the company should receive by the end of 2022 and use exclusively for its own needs.

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UKRAINIAN STEEL CONSTRUCTION CENTER: PRODUCTION OF METAL STRUCTURES TO GROW TO 5% IN 2021

The production of metal structures in Ukraine by the end of 2021 may grow by 4-5%, this forecast was announced by Executive Director of the Ukrainian Steel Construction Center (USCC) Viacheslav Kolesnik in an exclusive interview with Interfax-Ukraine.
“The first half of 2021 was good: the production of metal structures amounted to about 76,000 tonnes. The third quarter was slightly worse in terms of dynamics: at that moment the price began to fall, many believed that buying metal on a downtrend was not always justified. The situation has stabilized. We still expect that in 2021 we will get results somewhat better than last year – growth of 4-5%,” he said.
According to Kolesnik, the metal structures market is currently in a downtrend in metal prices. “The rise in energy prices halted the downward trend – since October, prices have frozen. We hope that the trend of growth in energy prices will not last long, by the end of winter the situation will stabilize and the downward trend in metal prices will continue,” he said.
According to the expert, fluctuations in metal prices do not have a significant impact on exports, but on the local market they are significant from the point of view of the competitiveness of metal structures in comparison with other structural materials.
Kolesnik noted one more factor that may affect the final results of the year. “Significant volumes of metal are used for road construction, in particular for road fencing. Payments are practically suspended there in October-November. If payments to road fence manufacturers are not resumed, this segment will sag by 25-30% year-over-year,” he said.

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GOVT WANTS TO CAPITALIZE UKRFINZHYTLO IN 2022 FOR UAH 30 BLN MORE

The Cabinet of Ministers of Ukraine, which this week injected government domestic loan bonds for UAH 20 billion into the capital of PrJSC Ukrfinzhytlo, proposes to capitalize it in this way for another UAH 30 billion next year, according to the updated draft state budget for 2022 (No. 6000), which was submitted to the Verkhovna Rada on Wednesday.
According to an explanatory note, additional capitalization will allow “to continue the implementation of financial and credit mechanisms for providing citizens with housing with the participation of the Ukrfinzhytlo company, as well as to provide an opportunity to carry out thermal modernization of buildings and premises and thus insure against further increases in energy prices.”
As reported, on November 29, the Ukrainian government issued government domestic loan bonds for UAH 20 billion to pay for an additional issue of shares of PrJSC Ukrfinzhytlo.
The government made a decision on additional capitalization of the company on September 22 this year. The resolution provided for the issue of government bonds with a maturity of up to 15 years and an interest rate of up to 13% per annum.
Thanks to government bonds, the company should direct funds “for the implementation of programs for providing citizens with housing on the terms of mortgage lending and financial leasing.” According to the Ministry of Finance, this will make it possible to issue about 8,000 mortgage loans for the purchase of about 12,000 apartments on a financial lease basis.

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President of Ukraine to submit bill on multiple citizenship to Parliament

President of Ukraine Volodymyr Zelensky intends to submit to the Verkhovna Rada a bill on multiple citizenship for Ukrainians living in the countries of the European Union and the United States.
“An important component of our international policy is the support of world Ukrainianness. I know how important the issue of multiple citizenship is for Ukrainians living in the United States, Canada and the EU. Today I am submitting a relevant bill to parliament,” Zelensky said speaking in the Verkhovna Rada with his annual address on the internal and external situation of the country.
According to the president, this will for the first time allow Ukrainians from all over the world “to feel themselves not a diaspora, not just people of Ukrainian origin, but of Ukrainian citizenship.”

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FIRST FLIGHT OF UKRAINIAN NATIONAL AIR CARRIER WILL BE IN 2022

The first flight of the national air carrier Ukrainian National Airlines (UNA) will be in 2022, President of Ukraine Volodymyr Zelensky has said.
“The first flight of the national carrier will be performed in 2022. By 2025, the airline’s fleet will be completed – at least 20 aircraft. Regular flights, both internal and external, will be launched,” the head of state said, speaking in the Verkhovna Rada with his annual nation address.
He also added that the Ukrainian carrier should be seen not only in Ukraine, but all over the world. And this, according to him, will be greatly helped by the Common Aviation Area Agreement, which Ukraine signed with the European Union.
“Therefore, UNA will definitely land in the EU. And such great plans are really inspiring,” he said.
Speaking about the construction of airports, the president said that now it is underway in 16 cities of the country. “We also want to build an international airport in Zakarpattia region, between Uzhgorod and Mukachevo, and two airports in eastern Ukraine,” Zelensky said.

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ZAPORIZHIA FERROALLOY PLANT INCREASES PRODUCTION BY 4%

Zaporizhia Ferroalloy Plant (ZFP) in January-October this year increased production by 4.2% compared to the same period last year, to 175,630 tonnes.
As the Ukrainian Association of Producers of Ferroalloys and Other Electrometallurgical Products told Interfax-Ukraine, over ten months of the year, ZFP reduced production of silicon manganese by 31.3%, to 53,280 tonnes, but increased output of ferrosilicon by 41%, to 70,840 tonnes, and ferromanganese – by 18.3%, to 45,260 tonnes.
The enterprise also increased production of metallic manganese by 2.54 times, to 6,250 tonnes.
In October, 16,170 tonnes of ferroalloys were produced, in September – 19,650 tonnes.
At a regular extended meeting with heads of shops and structural divisions of the plant, ZFP Board Chairman Pavlo Kravchenko noted that the night work schedule will provide significant savings in energy costs.
At the same time, he recalled that on July 1 of this year, the launch of the second part of the electricity market took place – the reform of its wholesale part. The participants of the wholesale market (one of which, in particular, is ZFP) have a financial responsibility for compliance with the volumes of purchased and consumed electricity. The price in the new market is formed taking into account the volume of energy consumption, payment schedules and payment discipline, as well as electricity consumption per day. There is a certain surplus of electricity at night, so it is cheaper at night.
According to him, from now on, it will also be necessary to make accurate forecasts of consumption, taking into account seasonal and daily consumption. Prices on the wholesale electricity market change every hour, so it is imperative to understand how much energy the company has consumed at a particular hour: at night, when electricity is the cheapest, or during the day, when it is expensive.
“The energy market today dictates its rules to us. We have already made sure that it is more economically profitable for us to work at night. Therefore, we are reformatting our production activities and we will perform all energy-intensive operations within the framework of the night work schedule. In the daytime, we will try to save money – we will only carry out preparatory work,” the head of the plant said.
Zaporizhia Ferroalloy Plant is one of three Ukrainian manufacturers of these products. The share of the domestic market of its supplies is 30-35%. Products are exported to the CIS countries, the European Union, Asia and Africa.

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