The European Bank for Reconstruction and Development (EBRD) invested EUR1 billion in the Ukrainian economy in 2021, bringing its three-year investment in the country to EUR3 billion.
“True to its ambition to become a majority green bank by 2025, some 45% of bank financing in Ukraine was in support of greater sustainability and energy and resource efficiency. Examples included a EUR140 million EBRD loan to modernize district heating and hot water supply in the capital, Kyiv, and a EUR50 million loan for Kyiv to renew the rolling stock of its metro network and support the shift from private cars to modern, efficient and environmentally friendly public transport,” the bank said.
“The bank also attracted a EUR5.5 million grant from the E5P to complement an earlier EUR25 million loan to refurbish, for greater energy efficiency, about 100 public buildings in Dnipro. Dnipro and Ukraine’s second-largest city of Kharkiv decided to accelerate their investment in green solutions by joining EBRD Green Cities, a flagship urban sustainability program, following in the footsteps of Lviv, Kyiv, Mariupol, Khmelnytsky and Kryvy Rih. Ukraine has more cities taking part in the program than any other economy in which the EBRD invests,” the report says.
“In the private sector, the bank teamed up with Kernel Group to help strengthen the company’s climate corporate governance. It is also supported the development of low-emission sustainable property by backing the real-estate portfolio of Dragon Capital, an investment firm,” according to the document.
“The bank joined forces with the European Union in extending grants to innovative Ukrainian firms seeking to improve climate resilience. The beneficiaries included a producer of recycled plastic The Good Plastic Company, architecture studio Ekodar, yeast producer Enzym, engineering firm Dominion, water and rainwater management company Viva Victoria and The Laboratory of Advanced Jet Propulsion, an institution focused on rocket and spacecraft technologies,” it says.
“The EBRD’s efforts to advance the sustainability of Ukraine’s economy were encouraged by the country’s newly reviewed Nationally Determined Contribution. The EBRD helped to develop the policy document and stands ready to help set out a low-carbon and climate-resilient pathway for the power generation sector in Ukraine,” the bank noted.
“In addition, the EBRD invested $ 75 million in a $825 million eurobond placed by Ukrenergo, the state-owned electricity transmission system operator, in a bid to resolve the payments crisis gripping the country’s renewable energy sector. The first ever sustainability-linked bond issued by a Ukrainian company, it helped restore the credibility of the Ukrainian renewable energy sector, paving the way for much-needed investment to support the country’s green transition. In the infrastructure sector, the EBRD approved a new EUR190 million loan tranche for further improvements to the country’s roads. This follows efforts by Ukravtodor and the Ukrainian authorities to implement a comprehensive anti-corruption program,” it says.
“This is part of the EBRD’s broader work to promote corporate governance reform in state-owned enterprises and to strengthen their supervisory boards. In a further move to promote greater private-sector participation in the development of infrastructure, the bank joined forces with the International Finance Corporation (IFC) on a new advisory engagement with the Ministry of Infrastructure to help structure private-public partnerships in the road sector and to prepare the concession of selected terminals at Chornomorsk port,” it reads.
“Standing by its long-time partner, the city of Lviv, the bank provided emergency funds to ensure that the vital infrastructure is safe and functioning during the ongoing pandemic. As social distancing measures remained in place, the EBRD supported companies that facilitated remote entrepreneurship and helped people to stay in touch, such as state-owned postal service Ukrposhta and its privately owned peer, Nova Poshta, as well as Datagroup, a provider of fibre infrastructure and digital services,” the report states.
“Recognizing the importance of better access to credit and trade finance, the EBRD channeled EUR357 million to seven local lenders: Ukrgasbank, Raiffeisen Bank Ukraine, Ukreximbank, OTP Bank, ProCredit Bank, Credit Agricole and Bank Lviv. Backed by EU investment incentives, the bank increased lending for small and medium-sized enterprises via partner banks under the EU4Business-EBRD credit line,” it reads.
“It also delivered record volumes of trade finance as part of the Trade Facilitation Program. Furthermore, the bank financed successful Ukrainian companies such as car importer Winner, Kokhavynska Paper Factory and gas trader ERU Trading. It also teamed up with USAID and the American Chamber of Commerce to develop an action plan for the consolidation of infrastructure for the capital and commodities markets,” according to the bank.
An exclusive interview with Mehmet V. Sacaklioglu, the founder & chairman of the Bosphorus Development supervisory board, for Interfax-Ukraine
Tell us about Bosphorus Development.
Our company is one of the largest investment and development companies in Turkey. My grandparents started a business in the 1930s. I am a representative of the third generation. The family business started with retail, then the company launched other business activities, including the opening of a network of grocery stores, restaurants and bakeries, production of furniture, textiles, as well as gas supply and trade in petroleum products.
Our company implemented the first development project in 1970. More than 5 million square meters of real estate have been built, more than a hundred projects have been completed in 51 years.
Among the landmark projects for us are Istanbul Aquarium – one of the largest themed aquariums in the world, with a total area of 23,000 square meters, and the largest business center Istanbul Tower 205 (220 meters high, 246,000 square meters).
We have our own architectural team, but we also work with the world’s best architects. In particular, for Istanbul Tower 205, we considered the proposals of many leading architects around the world, but focused on the project of the American company Skidmore, Owings & Merrill (Burj Khalifa in the UAE, One World Trade Center in New York, Tianjin CTF in China).
We have also built several malls, the Crowne Plaza Istanbul hotel and about a hundred business and premium class residential projects. Today, six facilities in Istanbul are under design and initial implementation.
Why did you choose Ukraine to expand your development direction?
I have been living in Ukraine for 20 years, married and raised two children here, graduated from the Institute of International Relations of the Taras Shevchenko National University of Kyiv. Ukraine is my second homeland. During these years I’ve developed business in various directions, but now decided to focus on development.
In Ukraine, we already have a fairly large land bank. Today it includes four land plots, we are negotiating the purchase of three more land plots. Before the start of construction work, we would not like to name the locations. I can only say that all the sites are located in the central part of the capital.
What characteristics must a land plot have to be interesting for your company?
Many factors are important for the implementation of a successful project: location, infrastructure, transport links, the availability of social facilities and others. The size of a land plot must be at least 1 hectare, but if the location is very interesting, it may be less. A necessary condition is that it must be impeccable from a legal point of view. To establish the compliance of a land plot with our standards and requirements, we necessarily conduct due diligence, they were made for us by well-known international companies such as Baker McKenzie, Ernst & Young, DLA Piper.
Unfortunately, there are no completely “white” areas in the capital, without potential conflicts.
If this is true, it may be one of the reasons why there are very few international developers in Ukraine.
Ukraine and Turkey have historically had very good relations, with Turkish companies actively involved in the construction of important infrastructure facilities in Ukraine, but Bosphorus Development will be the first Turkish development company to implement projects of this scale in the Ukrainian capital.
Which construction sector did you choose to invest in? What projects do you plan to implement?
As I mentioned, we have experience in implementing projects of any complexity and different types: housing, hotels, trade, commercial real estate, infrastructure and others.
Our first project in Kyiv will be a multifunctional residential complex with commercial and social facilities. It will be business class housing, with interesting and original architectural solutions, with the use of high-quality materials, in harmony with the environment, with a well-thought-out and useful infrastructure for residents. The project has already been developed by our architects in collaboration with Ukrainian colleagues.
In the construction of our facilities, we use only high-quality and environmentally friendly materials that have undergone thorough inspection, examination and certification. In Turkey, we have our own production of construction and finishing materials. For example, all wood elements and constructions in our projects are our own.
In Ukraine, we are currently studying manufacturers and suppliers of construction materials, analyzing which Ukrainian materials to use and which to import. As an example, the quality and characteristics of Ukrainian finished granite completely suits us. As for ceramic granite – we choose between Turkish, Italian and Spanish manufacturers. Windows and facades – there are several representative offices of Turkish and German manufacturers in Ukraine, we are studying their proposals. If we control the whole process of materials production and if they fully meet our requirements, then, perhaps, we will make a choice among Ukrainian manufacturers.
When will you present the projects and start their construction?
The construction of our first project will start in the first quarter of 2022, then we will talk about it in more detail, make a presentation. Our second project, no less large-scale – at the end of 2022.
How many staff do you have in the company in general and how many will work in Ukrainian projects?
The Turkish staff is over 1,500 people. In Kyiv, we are currently recruiting a team for the first project, and plan about a hundred employees at the initial stage. If necessary, we will bring highly qualified specialists from Turkey – management, engineers, architects, builders and others. We are studying this issue in terms of the quality of work and professionalism of local staff. About 500 employees will be needed to implement our initial projects.
Are you planning to certify your projects according to “green” standards?
Most of our projects in Istanbul are certified according to LEED standards. For example, Istanbul Tower 205 meets the LEED Platinum quality standard. Regarding Ukrainian projects, we are currently in the process of negotiating and choosing a certification system.
How much will be invested in the implementation of projects?
After the official presentation of our projects, we will launch sales, but regardless of the activity of buyers in the real estate market and potential investors, regardless of the economic situation in Ukraine, we have enough financial resources to complete and implement them in a timely manner.
The medical company Adonis has begun implementing a strategy for the development of its franchise network.
General Director of the company Vitaliy Hyrin told Interfax-Ukraine that the strategy is being implemented in two formats – a medical center and points for collection of laboratory tests.
“We have two options: a small medical center with an outpatient appointment, or a collection point – a manipulation room. They will work under our Adonis brand and comply with all the rules and requirements of corporate culture. At the same time, we will control our franchisees,” he said.
According to Hyrin, Adons has already attracted three franchise partners to open a large medical center with surgery and two collection points. By the end of the year, it is planned to open up to ten collection points in different regions of the country.
Answering the question of who can be the Adonis franchisee, Hyrin said that it can be “both people from medicine, as well as people from outside the healthcare sector, whom we are ready to accompany and to help.”
“Among our potential franchisees may be medical workers, for example, a doctor who wants to open his office, or a medical facility. We are ready to help at any stage, from obtaining a license to supporting operational activities. Also, our franchisees can be owners of premises who want to develop a medical business in them. In this case, we are ready to help with all medical issues. The only condition: our partner must understand that he will be engaged in the development of his business, this is not about making passive investments,” he said.
Adonis is a network of private full-cycle medical centers for adults and children.
The private clinic Adonis was established over 20 years ago. Its network includes ten branches in Kyiv and the region, including two of its own maternity hospitals and a stem cell laboratory. In the branches of the clinic, doctors conduct appointments in 60 medical directions.
ADONIS, DEVELOPMENT, FRANCHISE NETWORK, HYRIN, MEDICAL COMPANY, АДОНИС
The profits of ports should be returned to the cities in which they are located for the development of their infrastructure, Mykolaiv Mayor Oleksandr Senkevych has told Interfax-Ukraine on the sidelines of the International Mayors Summit (IMS).
“Mykolaiv was a city of shipbuilders. Now the factories are standing idle, Mykolaiv has turned into a port city. However, we do not receive money from the port infrastructure to the local budget, except for personal income tax and land lease,” Senkevych said.
He recalled that last year the net profit of the Ukrainian Sea Ports Authority amounted to more than UAH 2.6 billion.
“I think that this amount needs to be “halved.” Half of the profits is to be divided between the port cities, in proportion to the transshipment of goods. Cities should receive a portion of what they have earned for the country. Then we will be able to restore our infrastructure,” he said.
In his opinion, it will be possible to talk about the restoration of production and the attraction of significant investments in shipbuilding after the adoption of a law on technology parks. Senkevych considers promising a mechanism for the establishment of tax credits and preferential rates by local governments.
“Roughly speaking: they built a plant for EUR 100 million, you are provided with a tax credit for 50% of this amount for five to seven years. Personal income tax and land tax are paid from this amount. It is profitable for the enterprise to work officially, pay high salaries to employees,” Senkevych said.
The development of R&D and product portfolio will become one of the key aspects of the new development strategy of Farmak pharmaceutical company (Kyiv) until 2028.
The company told Interfax-Ukraine that along with these areas, Farmak will focus on launching the Biotech area, entering the U.S. market and strengthening its positions in the CIS countries.
“The new strategy is based on four key priorities for the development of the enterprise: take the position of an unattainable leader in Ukraine, consolidate and develop success in the CIS countries, become a successful player in the global market, strengthen the employer’s brand and be a company employing the best market specialists,” it said.
Farmak noted that in previous years, investments were made in production facilities.
“Now the company operates a new modern aseptic production, the equipment of six workshops has been updated, a new plant for the production of APIs has been opened in Shostka (Sumy region). The key aspects of the new strategy are the development of R&D and product portfolio, the launch of the Biotech direction, entry into the U.S. market and the strengthening of positions in the CIS countries,” the company said.
It is specified that Farmak will continue its strategy of reinvesting in development up to 90% of the received profit. The overall dynamics demonstrates the annual growth of the company’s financial indicators. Capital investments in 2020 amounted to UAH 1.3 billion, which is 78% more than in 2019. In the first half of 2021, sales revenue shows an increase of 28.3% compared to 2020, capital investments amounted to UAH 756 million, which is 12% more than in the first half of 2020.
In addition, the company stressed the importance of human resource development.
“The transformation of the company into an international one requires the involvement of specialists with unique knowledge, so it is necessary that all employees have a high level of English proficiency. Now it is planned to create international teams and exchange of personnel between the parent company and subsidiaries. This will help synchronize and strengthen the teams, provide new knowledge and will open up new horizons for the implementation of the set goals,” Farmak said.
As specified, in the course of implementing the strategy, Farmak plans to increase the global export of target products.
“Since the beginning of the year, the company has extended its presence in Latin America, opened an office in the UAE and a representative office in Vietnam. In the future, an even larger-scale entry into international markets is planned. One of the most important steps is entering the U.S. market, as well as the localization of business in Uzbekistan, which occupies 50% of the structure of shipments to the CIS countries,” Farmak added.
In addition, it is planned to improve the portfolio through a focus on new drugs.
“Farmak sees the future in the development of modern, high-tech drugs. In 2023, it is planned to open a new R&D center, which will significantly expand the scientific base, will allow developing drugs that are in demand all over the world, for example, developing an oncological portfolio. Special attention will be paid to for the launch of the Biotech direction. In matters of biotechnological medicines Farmak closely cooperates with consultants from Germany, Spain and the United States,” the company stressed.
In addition, the company noted the role of total digitalization of production processes. In particular, in the coming years, a complete transition to electronic quality certificates, electronic research protocols, electronic dossiers, and e-serialization of products is planned.
As reported, in September 2021, Farmak presented the new development strategy “Farmak 2.0: from local to global success.” A detailed plan has been developed until 2028, the main goal of which is transformation from a local leader into an international company.
Farmak is the leader of the Ukrainian pharmaceutical market. The product portfolio includes more than 220 complex component modern medicines. Among the main directions are endocrinological, gastroenterological, cardiological, neurological, anti-cold and other drugs.
The Cabinet of Ministers of Ukraine on Wednesday approved the draft decree on the signing of an agreement between the government of Ukraine and the government of the United States on projects in the field of research, developments, testing and evaluation, the authority to sign the agreement was given to Minister of Defense of Ukraine Andriy Taran, according to the Press and Information Office of the Ukrainian Defense Ministry.
“The signing of this agreement will give the Ukrainian side the opportunity to: conduct joint research and development work on the development of weapons and military equipment, their individual components; obtain information about advanced defense technologies, trends in their development; conduct of tests and testing of military equipment using equipment and technologies that are not available in Ukraine,” the office said.
The agreement also opens up the possibility of attracting foreign funding for research work by Ukrainian research institutions, as well as increasing the research potential of Ukraine through cooperation with partners in joint projects.
The ministry said that the implementation of the agreements will take place under project contracts within the framework of the agreement concluded between the Ministry of Defense of Ukraine and the U.S. Department of Defense.
“The signing of the Agreement is planned during the visit of the President of Ukraine to the United States and will be another important step in the development of strategic partnership with the United States in the field of armaments,” the Defense Ministry said.
