Business news from Ukraine

ENERGY EFFICIENCY AGENCY OF UKRAINE TO OFFER ENERGY EFFICIENCY PROGRAMS FOR INDIVIDUALS AND BUSINESSES WITH VOLUME OF UAH 10 BLN

The State Agency of Ukraine on Energy Efficiency and Energy Saving intends to submit for approval by the government a program to support energy efficiency for 2022-2026 with the volume of UAH 10 billion, acting chairman of the agency Kostiantyn Hura has said.
“Since the insulation credit program is coming to an end this year, we have developed the concept of a new target program for 2022-2026 to support energy efficient measures in the amount of UAH 10 billion, which would include not only “warm loans” for individuals, but also apply to industry, the budgetary sector, transport and individual projects for the development of bioenergy,” he said in a comment to the Energy Reform portal at the all-Ukrainian forum Ukraine 30. Ecology.
He said the mechanism of the proposed program for loans to legal entities will differ from the program of “warm loans,” which consists in compensation for their part.
“We are now considering the possibility of launching such a mechanism as lowering the loan rate, in this case – at the double refinancing rate of the NBU, which is currently 6.5%. That is, the bank’s standard rate minus 13% if an entrepreneur takes out a loan for energy efficiency. The banks’ expenses will be compensated from the budget,” he explained.
According to the expert, the agency has coordinated the program with all interested bodies and is now awaiting approval from the Ministry of Energy.
“After that, we will send it to the government. I hope for its support,” Hura said, adding that such a program to stimulate energy efficiency will provide an opportunity not only to modernize housing, budgetary sectors, enterprises, but also have a positive effect on the economy, creating projects, jobs, increasing budget revenues.
As reported, the Cabinet of Ministers of Ukraine extended until 2021 the state target program for energy efficiency and development of the sphere of energy production from renewable energy sources and alternative fuels, being in effect from 2010 to 2020.

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BUSINESS ASSESSES LEVEL OF DIGITAL INFRASTRUCTURE DEVELOPMENT IN UKRAINE AS MODERATE/LOW

The European Business Association (EBA), in partnership with Huawei Ukraine and SAP Ukraine, has conducted an expert study of the current state of digital transformation deployment at private and public levels.
The study was conducted from March 29 to April 14, 2021, according to a joint report by the companies. It covered 130 general, executive and technical directors of EBA member companies.
The majority of respondents assess the volume and quality of the provision of state electronic services as high or satisfactory (7% and 55%, respectively). Among the most widespread electronic government services, the respondents rated the work of the Diia single portal of government services the best of all.
At the same time, according to the respondents, the development of digital infrastructure, as well as improving access to the use of modern technologies (digital inclusion) are definitely priority tasks for the state.
Thus, 47% of respondents assess the level of development of digital infrastructure as moderate, 42% – as low or very low. The majority of respondents also rated the level of digital inclusion as low or very low (54%).
At the same time, 55% of respondents believe that the level of digital transformation of their industries is moderate, 16% – high, another 6% – very high. At the same time, 23% consider it low or very low.
Of the directors surveyed, 41% rate the digital literacy level of their employees as moderate, 13% as low, and 46% as high.
In addition, 47% of directors rated the level of digital development of their business as moderate, 39% think it is high, another 5% – very high. Only 9% of respondents consider the level of digital transformation of their companies to be low.
At the same time, the overwhelming majority (89% of those surveyed) admitted that the corporate strategy of their company contains the goals of digital transformation.
According to the results of the survey, the integral indicator of the digital transformation index of Ukraine amounted to 2.81 points out of five possible and found itself in the negative plane.
According to the research methodology, the integral indicator of the index consists of five equivalent components: the general level of digital transformation of companies; digital transformation of industries; development of digital infrastructure; digital inclusion; volume and quality of state electronic services.
“We are witnessing a dynamic growth of the Ukrainian IT market. However, there are certain barriers that hinder the development of digitalization due to the rather complex regulation of the industry, emigration of specialists, weak infrastructure support for new projects, restrictions on the use of cloud technologies in the public sector, etc. This is confirmed by the results of an expert study,” Director of SAP Ukraine Maxim Matyash said.

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UKRAINIAN DTEK CONSIDERING POSSIBILITY OF EXPANDING ITS OIL AND GAS BUSINESS

DTEK is considering the possibility of expanding its oil and gas business in Ukraine, CEO of the company Maksym Timchenko has said in an interview with the Ekonomichna Pravda edition.
“We are constantly studying the deposits of all available players on the market. That is, we are open to expanding our business, without exception, with all players, including state-owned companies. If there are such opportunities not only for acquisitions, but also for joint activities, some kind of joint projects in exploration and production, we are ready for this,” he said.
According to Timchenko, in particular, the assets of Geo Alliance group for DTEK are “a potential area of our interest.” At the same time, he did not comment on the details of the negotiations.
As reported, in 2020 DTEK Oil and Gas increased natural gas production by 10.8% (by 180 million cubic meters) compared to 2019, to 1.84 billion cubic meters. In 2021, the company plans to increase gas production to 2 billion cubic meters.
Geo Alliance produced 203 million cubic meters of gas in 2020.
Geo Alliance is under the mandate of the international investment and consulting group EastOne, which unites the assets of Victor Pinchuk. In 2012, EastOne announced a strategic partnership between Geo Alliance and Arawak Energy Ukraine BV, part of the Vitol group of companies, one of the largest operators in the world energy market.

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BUSINESS EXPECTS UKRAINIAN CURRENCY DEVALUATION

Ukrainian business has improved expectations of a slowdown in inflation over the next 12 months to 7.7% from 7.9% and the weakening of the hryvnia exchange rate to UAH 29.15/$1 from UAH 29.68/$1.
According to the results of a regular quarterly survey of business expectations of the country’s enterprises, posted on the NBU website, the business activity expectations index of enterprises increased compared to the previous quarter to 108.4% from 99.6%, returning to positive values.
According to the central bank, the improvement was mainly due to high estimates of the total sales of domestic products, the financial and economic condition of enterprises, investment costs for machinery, equipment and inventory, as well as investment costs for construction.
The survey shows that the respondents of all types of economic activity expect an improvement in their financial condition, with the exception of energy and water supply companies, which believe that their condition will not change in the next 12 months.
According to the report, the business expects an increase in product sales, including on the foreign market. Optimistic sentiments prevail in all sectors of the economy, except for energy and water supply.
For the sixth quarter in a row, the business is set to cut its employees, according to the survey. At the same time, respondents from trade and mining enterprises expect an increase in the number of their employees.
At the same time, the majority of companies (62.9%) plan to raise salaries for their employees over the next 12 months, and only 2% of companies are ready to cut salaries.
The survey shows that the share of companies planning to raise loans in Ukraine over the next 12 months dropped to 39.3% (in the previous quarter – 41.7%). The overwhelming majority of borrowers (78.7%) prefer to raise funds in the national currency. At the same time, the share of companies planning to take out loans abroad increased to 8.7% from 6.9%. It is indicated that high rates (55.9% of respondents) and excessive requirements for collateral (40.9%) were named the main obstacles to attracting new loans.
Some 687 enterprises from 22 regions of the country took part in the survey of business expectations. Among the respondents, 18.3% are processing industry companies, 16% – from wholesale trade, 15% – agriculture, 13.2% – transport and communications, 6.8% – mining industry, 4.8% – electricity and water supply, 4.5% – retail trade, 3.1% – construction, 18.2% – enterprises of other industries.

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PRESIDENT OF UKRAINE SIGNS LAW TO PREVENT PRESSURE ON BUSINESS

President Volodymyr Zelensky signed law No. 1320-IX on amendments to certain legislative acts of Ukraine to prevent excessive pressure on business entities, which was adopted by parliament on March 4, 2021, the presidential press service said on Thursday. “The law allows local authorities to exercise control over the observance of labour legislation at enterprises, institutions and organizations of communal property of the respective territorial communities,” the press service said in a statement.
It is noted that local government authorities can also take the initiative to carry out a public audit at enterprises that are not in communal ownership, as well as in relation to individuals, entrepreneurs using the labour of hired employees.
“The executive authorities of village, settlement, city councils can contact the central executive agencies implementing public policy on state supervision and control over compliance with labour legislation, or its territorial agency (State Labour Service of Ukraine) on violations by a business entity of legislation on labour and employment of the population,” the President’s Office said.
The President’s Office said that the executive authorities of city councils and merged territorial communities are deprived of the right to draw up protocols on administrative offenses for violation of labour and employment legislation.
“Among other things, the law proposes to exempt the State Labour Service of Ukraine and its territorial agencies from paying court fees when considering cases in all courts,” the President’s Office said in the statement.
The document also amends the Code of Ukraine on Administrative Offenses, according to which, for failure to comply with legal requirements or prevent officials from the central executive agency implementing public policy on supervision and control over compliance with labour legislation and its territorial agencies, or preventing their officials for the implementation of measures of state supervision provides for a fine for officials from 50 to 100 non-taxable minimum incomes of citizens.
This law comes into force one month after the date of its publication.

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UKRAINE’S SERVICE-BUSINESS INCREASES SALES BY 10.4% IN Q4 2020 – STATISTICS

The volume of sales of companies operating in the service sector of Ukraine in the fourth quarter of 2020 amounted to UAH 264.2 billion, which in comparable prices was 10.4% higher than the level of the fourth quarter of 2019, the State Statistics Service has said.
According to the report, the volume of services provided to the population amounted to 17.4% of the total volume of services provided in the country (UAH 46.05 billion).
The State Statistics Service reminded that in the fourth quarter of 2020 the volume of service provided by companies grew by 10.9% compared with the previous quarter.

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