As of the second quarter of 2019, the largest investors in Ukrainian equity securities were the European Bank for Reconstruction and Development (EBRD, the United Kingdom) with $109.6 million, Norges Bank Investment Management (NBIM), the Norwegian central bank, with $83.5 million and Cascade Investment of former MP Vitaliy Khomutynnik with $69.7 million, which invested only in Ukraine among EBRD regions of operation.
According to the March 2020 report Investor Base of Securities Markets in EBRD Regions made in collaboration with HIS Markit and released on the EBRD’s website, Kairos Investment Management (Great Britain) with $57.2 million and Kairos Partners (Italy) with $53 million also entered the top five major investors in Ukrainian securities by the middle of 2019.
The bank said that in general, in the region of Eastern Europe and the Caucasus (EEC) EBRD invested $2.05 billion in securities, NBIM invested $7.27 billion, Kairos Investment Management and Kairos Partners invested $365.5 million and $130.8 million, respectively, while Cascade Investment in the region invests only in Ukrainian companies.
The leading investors in Ukraine were also PTE PZU (Poland) with $49.4 million ($4.71 billion in EBRD regions), Kopernik Global Investors (the United States) with $39.9 million ($440.1 million), Aviva Santander (Poland) with $38.5 million ($6.16 billion), Templeton Asset Management Singapore (Singapore) with $35.2 million ($356.6 million) and Alfred Berg Asset Management (Sweden) with $31.1 million ($1.93 billion), according to the report.
“Ukraine’s top shareholders were all low- and medium-turnover investors, with just $19.4 million invested by high-and very-high turnover firms. Ukraine boasted the highest percentage of low-turnover firms in the EEC region, apart from Armenia and Belarus, which each had just one disclosed holder,” the bank said in the document.
In general, according to the report, investment in equity securities of Ukrainian companies for five years increased by 22.8% and for two years by 10.1%, to $938.3 million, although their number decreased from 126 to 123. Total capitalization of Ukrainian companies was estimated at $4.3 billion.
According to it, strategic investments in Ukraine in the second quarter of 2019 slightly outbalanced institutional ones, for 41.5% compared to 36.7%, respectively.
Passive investments remain extremely insignificant with amount of $32.4 million, having decreased by $2.5 million over two years, while active investments have grown by 10.8% during that period.
In the total volume of investments in the government, the share of European investors was 74.1%, North African was 20.9%. In addition, Asia accounted for 5% of institutional investments, most of which belonged to Templeton Asset Management.
“In Ukraine, we would invest mainly through Poland and London, where the biggest companies are listed. I would rate the ease of trading in Ukraine a 3. The ease of trading in Slovenia is a 3. The company we are invested in there is listed in London. The ease of trading in Turkey is a 4 and Cyprus also a 4. The market in Poland is very easy to access, I would rate ease of trading a 5,” a representative of the European Mutual Fund (assets under management are more than $50 billion) said in the report.
According to a representative of the North American mutual fund with assets under management of more than $10 billion, the company is optimistic towards Ukraine, due to the political events taking place in it.
“We like to look for countries that are reforming and moving towards freer, more liberal economic policy making… Ukraine is one country where we are spending a lot of time given the political changes there,” the investor said in the report.
The European Bank for Reconstruction and Development (EBRD), under the Green Cities project, intends to provide Spetskomuntrans Communal Enterprise with a loan of EUR 28.5 million to finance the project for the rehabilitation and modernization of solid waste infrastructure in the city of Khmelnytsky, valued at EUR 36.5 million
According to information on the bank’s website, the decision on the project can be made on July 8, 2020. Now the project is under consideration.
The loan split into several tranches co-financed by up to EUR 5 million investment grant from the EU Neighborhood Investment Platform and up to EUR 3 million local contribution.
The project includes two phases. The phase I of the Project will address the city’s urgent investment needs with respect to the rehabilitation of the existing landfill, the construction of a new engineered sanitary landfill in compliance with the EU standards adjacent to the old one, the acquisition of new landfill equipment to ensure sustainable operation of the new landfill and improvements of the solid waste collection and transportation systems, co-financed from the city budget.
The phase II of the project includes the construction of a new material recovery facility for non-organic waste and a separate composting facility for pre-sorted organic waste. The EBRD said that this will reduce the share of solid waste going to the landfill.
Spetskomuntrans Communal Enterprise is responsible for the collection, treatment and disposal of municipal solid waste in Khmelnytsky. The company has contracts with more than 92,000 households and almost 3,000 commercial and public organizations for waste removal and disposal. The company is also an operator of the existing landfill located in the territory of the city.
EBRD, EUR, KHMELNYTSKY, LOAN, MLN
The European Bank for Reconstruction and Development (EBRD) has provided a four-year loan of EUR7.5 million to Bank Lviv for lending to small and medium-sized enterprises (SME) under the EU4Business program, Anton Usov, the EBRD senior adviser on external affairs, has said.
“Small and medium-sized enterprises in western Ukraine will benefit from a new loan of up to EUR7.5 million to Bank Lviv provided under the EBRD EU4Business credit line. The loan will be available for disbursement in the Ukrainian hryvnia, which will protect Bank Lviv’s borrowers from foreign currency-related risks, and offer long maturities,” the EBRD noted.
“The funds are provided in the context of the Deep and Comprehensive Free Trade Agreement (DCFTA) between the European Union (EU) and Ukraine. EU grants will be offered as investment incentives to eligible enterprises to reduce the cost of their capital expenditure on upgrades of technology and production processes to comply with EU standards and regulations,” it said on its website.
Bank Lviv is a regional bank providing banking services to SMEs and private clients across western Ukraine. It is well established in Lviv, Ivano-Frankivsk, Lutsk, Rivne, Ternopil and Uzhgorod regions, as well as Kyiv.
The EBRD is a leading institutional investor in Ukraine and to date has committed more than EUR14.54 billion in over 460 projects to the country.
President of Ukraine Volodymyr Zelensky has emphasized that the International Monetary Fund (IMF), the World Bank, the European Bank for Reconstruction and Development (EBRD) and other financial organizations were ready to help Ukraine amid the coronavirus pandemic. “Yesterday I had a conversation with IMF Managing Director Kristalina Georgieva. Our international financial partners, including the IMF, the World Bank, the EBRD assured us of their readiness to support and help Ukraine,” he said in an appeal to Ukrainians on Monday, March 23.
The European Bank for Reconstruction and Development (EBRD), as part of the Green Cities program, intends to provide Kyivteploenergo with a loan of EUR 140 million for the modernization of the central heating infrastructure, according to information on the bank’s website.
The project, the approval of which is scheduled for May 27, will be aimed at ensuring the sustainable and efficient operation of Kyiv combined heat and power plants (CHPP) and boiler houses, improving the reliability and quality of heat supply and hot water supply.
As reported, last year, Kyivteploenergo announced its intention to attract a EBRD loan in the amount of EUR 140 million with a three-year grace period to modernize the municipal heating system. At that time, three main areas of the project were reported: closing 45 small boiler houses (out of 200 boiler houses the company has), replacing a condensing heat exchanger at the small block of CHPP-5, and installing new generating capacities at CHPP-6.
The EBRD is the largest international financial investor in Ukraine. Since the beginning of its activity in the country in 1993, the bank has financed 445 projects for a total amount of almost EUR 14.6 billion.
The European Bank for Reconstruction and Development (EBRD) and the European Union (EU) have agreed a new EUR 50 million programme of financial guarantees aimed at scaling up investment in renewable energy in Ukraine and in the EU’s Southern Neighbourhood with a particular focus on Jordan, Lebanon and Tunisia, the bank has said in a press release.
Under the new programme, the EBRD will provide guarantees to lenders such as local commercial banks, which will allow them to provide financing to projects alongside EBRD loans. The guarantee is expected to help generate total investments of up to EUR 500 million.
This is the first agreement during the bank’s cooperation with the EU through the External Investment Plan (EIP) in the EU neighbourhood regions.
“We’re delighted to partner with the EU for such an urgent cause as climate action. Our lending combined with the EU’s financial instruments encourages more participation of the private sector in investments which are very much needed to face the global challenges of the future, including a more sustainable development model,” EBRD Vice President, Policy and Partnerships Pierre Heilbronn said.
European Commissioner for European Neighbourhood Policy and Enlargement Negotiations Olivér Várhelyi added that the EU is convinced the guarantee provides sufficient risk cover to attract major private sector investment in countries where not enough such financing is available.
According to the report, through the EIP, to date the EU has allocated EUR 4.5 billion in public funds to leverage EUR 44 billion in public and private investment for development in countries neighbouring the EU and in Africa.
