Head of Zhytomyr Regional Administration Vitaliy Bunechko reported on the ongoing work with a private investor who is seriously considering the issue of building an international airport in Zhytomyr as a public-private partnership.
“In order for the airport to work within the framework of the international airport, it is necessary to complete the construction of the runway. To complete it, we need UAH 360 million. What are we doing in this direction? A certain land plot has been transferred to the city. We are now very actively working with the private investor who is seriously considering the construction of the international airport within a public-private partnership. The idea is even to make a cargo hub here to unload Kyiv, the Zhuliany and Boryspil airports, to make a hub here to fly here and send cargo across Ukraine,” he said in an exclusive interview with Interfax-Ukraine.
Speaking about road construction, Bunechko said that since the beginning of his work as head of the regional administration in August 2019, he was skeptical about whether the Chinese contractors would be in due time with the construction of a ring road around Zhytomyr, since they violated all the deadlines.
“But the pace with which they are now making the road, and the kilometers of the road that are already there, all this gives hope and optimism,” he said.
Bunechko said that the region now has a new approach to regional roads, and not “patching up” roads.
“When I reported to the president about my first 100 days of work, I said that there would be 90 km of roads, he asked: “Are you going to build roads in 10 years?” We have a network of 7,000 km. He said that we need to look for opportunities. I want to say today it is 140 km of regional roads, which are already being repaired, despite all the obstacles that were in the antimonopoly committee. We have overcome them, we have completely tendered all our 53 highway points, all roads are being repaired. There are some roads that have already been completed, now they will be put into operation, it remains to obtain permits,” he said.
The governor said that the most critical sections of roads were selected throughout Zhytomyr region, and soon everyone will feel that the roads are being built.
The head of the office of the National Investment Council of Ukraine, Olha Mahaletska, predicts a decrease in the interest of potential investors in regional airports, according to the website of the council. “Previously, one of the most attractive areas for investment was infrastructure, namely, concession of airports, but after the pandemic the world will change, the focus of interest will change. I do not think that now regional airports will be considered by potential investors as one of the most interesting topics,” she notes.
According to Mahaletska, the council is already conducting the sector analysis to understand which areas may be attractive to investors in the post-pandemic period.
At the same time, the council said, with reference to professor at Georgetown University Anders Aslund, that after the COVID-19 pandemic, the Ukrainian economy will be in a slightly better position than the economy of the European Union: while the EU will lose about 10% of GDP in 2020, Ukraine will lose about 8%.
The head of the office said that the timely introduction by the Ukrainian government of a quarantine was a very correct decision, which helped contain the spread of the disease in the country.
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
On Friday, November 29, at 13.00, the press center of the Interfax-Ukraine news agency will host a press conference entitled “From Robbery of Foreign Investors to Restoration of Confidence in Ukraine” on regular robberies of foreign investors by a criminal gang which included employees of security agencies in 2015-2018. Participants: Chairman of NGO Association for Protection of Foreign Investment Anatoliy Velymovsky; co-founder of NGO Association for Protection of Foreign Investment, Head of non-governmental organization for protection of public order and state border of Ukraine “Left Bank – Kyiv BTO” Taras Moskaliuk; German citizen, investor, owner of BioTexCom Albert Totchilovski; Lithuanian citizen, private investor Virmantas Vildziunas (8/5a Reitarska Street). Registration requires press accreditation.
The transaction on the sale by MTS (Russia) to the Azerbaijani telecommunications company Bakcell of Vodafone Ukraine, the second largest mobile operator in the country, can be considered profitable, since MTS during 2010-2019 received $2.087 billion from this company, which is 5.5 times more than it invested.
This opinion was expressed by the head of the analytical department of Concorde Capital investment company, Oleksandr Paraschiy.
“MTS is one of the most successful investors in Ukraine. During 2003-2004 MTS bought a 100% stake in UMC (MTS-Ukraine, Vodafone Ukraine) for $378 million in cash. MTS has just sold the company for $734 million in cash (94% more than it bought it 15 years ago). During 2010-2017 the Ukrainian subsidiary of MTS paid (it is clear to whom) dividends totaling $1.353 billion (according to my estimates). So, we have: $378 million was invested in the company, $2.087 billion was received from the company during 2010-2019, or 5.5 times more than invested,” he wrote on his Facebook page.
According to Paraschiy, the average annual profit of MTS from investments in Ukraine during 2004-2019 amounted to 20%.
“The cost of the Ukrainian division of MTS under the agreement with Bakcell amounted to $848 million (according to MTS), which is 38% less than the conditional value of the Ukrainian division in the structure of MTS, ceteris paribus. The market will show whether it is a good deal for MTS or not. So far, the market is “inclined to believe” that the deal is good: MTS shares have risen slightly in price today. Perhaps one of the reasons for the growth is MTS’ promise to pay dividends to the shareholders from part of the money received from Bakcell,” he said.
Vagif Aliyev, the founder of PrJSC Mandarin Plaza, the investor and developer of Kyiv-based Lavina shopping center, on November 20 launched the first stage of the Blokbuster Mall shopping and entertainment center in Bandery Avenue in Kyiv, investing $400 million in construction. According to an Interfax-Ukraine correspondent, only a Silpo supermarket has started working in the facility. The rest of the stores will be launched on a fan-based basis as they are ready, the founder of Nai Ukraine, the project broker, Vitaliy Boiko, said.
According to him, the cost of investments in the construction of the Blokbuster Mall shopping center was $400 million. The total area of the first stage is 200,000 square meters, the leased area is 110,000 square meters. After the launch of the second phase, which is at an early stage of construction, the total area will be 300,000 square meters, the rental area some 200,000 square meters. The facility is located on a plot of 30 hectares.
“Vagif Aliyev’s pipeline now contains projects for EUR2.9 billion (12 projects of shopping and entertainment centers). This is the second largest indicator in the world in terms of development of retail real estate. Westfield is the first developer in the world with EUR8 billion, and the third one is one of the largest European investors with EUR2.5 billion. The uniqueness is also that all Mandarin Plaza projects are located in one city – Kyiv,” Boiko said at a briefing.
