Business news from Ukraine

Business news from Ukraine

FAILURE TO CONDUCT GREEN AUCTIONS AND SMALL STATE SUPPORT QUOTAS CAN DESTROY THE INDUSTRY AND SCARE AWAY INVESTORS – EXPERTS

On December 5, 2019, at 10:00, a press conference initiated by the European-Ukrainian Energy Agency regarding the future of bioenergy projects in Ukraine took place at the press center of the Interfax-Ukraine news agency.
Speakers:
Oleksandra Gumeniuk – Director of European-Ukrainian Energy Agency (EUEA)
Max Lebedev – Member of the Board of European-Ukrainian Energy Agency, Partner of GOLAW
Michael Rutherford – Development Director of Khmelnytskyi Biofuel Power Plant (KBPP)
Georgy Geletukha – Chairman of the Board of the Bioenergy Association of Ukraine (BAU)
In May 2019, the Verkhovna Rada adopted a law “On Amendments to Certain Laws of Ukraine on Ensuring Competitive Conditions for Generation of Electricity from Alternative Energy Sources”, which substantially changes the rules of the game for the participants of the green energy market. According to the provisions of this law, as of January 1, 2020, entities implementing renewable energy projects (RES) will be able to obtain state support only if they participate in the auction with the support quota allocation and only if they win.
The Ministry of Energy recently issued indicative state support quotas for auctions, which will total around 50 MW per year for biomass, biogas and small hydropower producers.
Such small quotas, experts warn, make it impossible to implement large projects and lead to an outflow of investors who have already entered the market. Foreign investors who have already invested heavily in the development of bioenergy projects in Ukraine will have to abandon their plans due to the inability to obtain guaranteed state support. As a result, the development of biomass electricity production may stop altogether, and projects that are already underway will be frozen.
One of the examples is the Khmelnytskyi biofuel power plant. A group of foreign investors from Ireland and the UK is planning to build a 46 MW bio-power plant that will produce biomass electricity. The project is now in its final stages and is awaiting the first auction to secure funding. The investor has already invested 1.4 million euros in its implementation. In the future, the investor group intends to build 10 more similar stations in other regions of Ukraine, investing more than $2 billion in them and creating 5 thousand new jobs.
However, these intentions may not be realized, as the quotas proposed by the Government do not allow even one project to potentially obtain the necessary quota of state support.
This provision, say representatives of the KBPP, could cause a situation where large-scale biomass projects will not be able to obtain the necessary capacity, which will block the development of the projects needed for the grid.
Market experts also say that compared to other sources of alternative energy, biomass is the most efficient and solves a number of problems typical of solar and wind plants. In particular, it enables uninterrupted power generation in 24/7 mode, efficient use of farm by-products, opening up sources of additional income for farmers and balancing the grid.
Therefore, this industry needs additional support from the state, and therefore they propose to consider increasing the quota or introducing an additional quota for stable generation facilities.
«What we are calling for are levels of quotas which are sufficient to allow the biomass sector to attract investment at a suitable scale to assist with the balancing issues the country is facing whilst also providing jobs and economic prosperity» – emphasized Michael Rutherford, Development Director of Khmelnytskyi Biofuel Power Plant.
European-Ukrainian Energy Agency, established in 2009, unites investors from Austria, Belgium, Great Britain, Norway, Spain, Switzerland, Turkey, Ukraine, the USA and other countries that implement renewable energy projects in Ukraine using solar, wind and bio-energy (around 2 GW of operational renewable power plants, 0.5 GW under construction, 2 GW with signed pre-PPAs). http://euea-energyagency.org/.
Video of the press conference is here

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ONE MLN PASSENGERS USE EXPRESS TRAIN FROM KYIV TO BORYSPIL AIRPORT

About one million passengers used the services of the Kyiv Boryspil Express train from Kyiv to Boryspil International Airport (Kyiv) over the year, the press service of JSC Ukrzaliznytsia (Kyiv) has reported, with reference to head of the company Yevhen Kravtsov.
“I’m sure no one will argue now that the express train to Boryspil airport is needed. During its first year of operation, it made about 10,000 trips and transported almost one million passengers. And this is the indisputable evidence of success of this project,” Kravtsov said.
The report notes that a record number of passengers was transported in August and September 2019 with 98,200 and 107,600 people respectively. The most popular trains are No. 842 Kyiv-Boryspil at 17:50 and No. 845 Boryspil-Kyiv at 19:17.
According to the head of Ukrzaliznytsia, the company plans to further develop this project. Currently, the reconstruction of the Vydubychi station is nearing completion, where a stop platform for the express train will be built.
“Vydubychi station will turn into a transport hub that will combine bus transportation, railways, subway and air transport. In addition, a diesel train manufactured by Kriukov Car Building Works is expected for this route. And this is an additional 170 seats,” he said.
Over a day, express trains carry out 57 trips and carry 2,500 passengers.

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STATE-RUN UKRPOSHTA LAUNCHES DELIVERY FROM POLAND TO UKRAINE

JSC Ukrposhta launches the delivery of parcels within three to six days from the date of shipment from a warehouse in Poland to Ukraine, the press service of the company has said.
According to a press release, Ukrposhta together with the private postal operator SMART Forwarding (with the head office in Greece) and the Polish company InPost have already begun test deliveries of international mail from Poland.
“We and our partners provide perhaps the only economical official channel for delivering goods or things. It’s convenient, reliable, simple. For example, sending a package with sneakers, clothes and food in factory packaging weighing 10 kg and with the size of up to 19x38x64 cm through an InPost post terminal will cost about PLN 37, or about UAH 230 in equivalent,” the press service of Ukrposhta said, citing first deputy director general of the company Oleksandr Pertsovsky.
According to him, if the value of a parcel per recipient does not exceed the customs limit of EUR100, customs clearance will be carried out according to a simplified mechanism.
“Now we are working in a test mode, doing weekly deliveries, arranging all processes. We plan to increase the frequency of departures from Poland to two or three per week,” the expert said.
The departure route from Poland to Ukraine can be tracked by the track number on the Ukrposhta website.
According to the company, the new delivery channel is safer and about 20-25% more profitable than alternative options.
In the near future, Ukrposhta plans to launch similar channels for the international delivery of parcels to Ukraine from Italy, Britain, and Germany.

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MARKET OF NEW COMMERCIAL CARS IN UKRAINE 6% DOWN

The initial registration of new commercial vehicles in Ukraine (including heavy vehicles) in January-November of this year decreased by 6% compared to the same period in 2018, to 10,800 cars, the Ukrautoprom association reports.
In November 1,007 new commercial vehicles were registered, which is ten units less than in November 2018, and 11% less than in October of this year.
Most often last month, like a year earlier, Renault cars were registered, whose sales grew by 30%, to 216 cars. Fiat ranks second with 142 cars with an increase of 14%, and Volkswagen ranked third, the registrations of which grew by 2%, to 89 units.
Ford ranked fourth (81 registered cars, up by 4%), and Mercedes-Benz ranked fifth, despite a 43% drop in registrations from November 2018, with 62 cars.
Belarusian MAZ vehicles lost 43% in registrations and occupy the seventh place of the November rating with 48 vehicles, Russian GAZ ranks 12th with 28 vehicles (down by 57%), and Ukrainian KrAZ ranks 14th (22 vehicles against 12 in November last year).
As reported, in 2018 the demand for new commercial vehicles in Ukraine increased by 10%, to 12,700 units, while registrations of imported used cars increased by almost a quarter, to 38,800 units.
According to the statistics data of Ukrautoprom, in November 2019 some 186 buses (all classes) were also registered for the first time in Ukraine, which is 4% more than in November last year and 3% less than in October 2019.

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STATE-OWNED UKRSPYRT POSTS NET PROFIT IN 2019

State-owned enterprise Ukrspyrt in January-September 2019 received UAH 17.15 million in net profit, or 81% of the plan.
According to the published results of the unscheduled audit of the company, the income of Ukrspyrt for the first nine months of this year amounted to UAH 1.24 billion, or 89% of the plan.
In 2018, Ukrspyrt received UAH 21.61 million in net profit (60% of the plan) and UAH 1.86 billion (76% of the plan) of revenue, according to the audit report.
In addition, during the audit, it was determined that the provision of discounts by the state-owned enterprise on the price of alcohol was non-transparent, as a result of which Ukrspyrt saw a shortage of UAH 119.78 million.
In 2018, Ukrspyrt allocated UAH 112.36 million for maintenance of 15 non-performing enterprises, UAH 80.19 million for the nine months of 2019.
During 2018 and in the nine months of 2019, auditors recorded excess consumption of fuel and energy resources by individual plants for a total amount of UAH 19 million. It was also found that the purchase price of grain crops for the production of alcohol was overstated for a total amount of UAH 8.17 million.

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LVIV INTERNATIONAL AIRPORT RAISES PASSENGER TRAFFIC BY 39%

Passenger traffic at Lviv International Airport in January-November 2019 amounted to 2.046 million people, which is 39.3% more than in the same period in 2018, the company’s press service reports on Facebook. The number of flights in January-November reached 17,485 (14,960 international and 2,530 domestic), which is 23.6% more than in January-October last year.
In November-2019, some 173,900 passengers used the airport services (152,500 on international flights, 21,400 on domestic flights), which is 39.2% more than in November 2018. At the same time, the number of flights last month increased by 10%, to 1,358 (1,110 international and 244 domestic).
As reported, Lviv airport in 2018 increased passenger traffic by 48% compared to 2017 – up to 1.598 million people.
Lviv International Airport is located 6 km south of the city center.

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