Ukraine needs foreign direct investment (FDI) to provide stable growth, and one of the fastest instruments for attracting at least $15-20 billion could be the offer of state-owned agricultural land estimated at 10 million hectares, Managing Partner of ICU Investment Group Makar Paseniuk has stated. “Land reform would be a huge driver for the further development of our country, as it can be done quickly and it will quickly attract FDI,” he said at the Ukrainian Financial Forum organized by ICU in Odesa.
Paseniuk said that the total area of agricultural land in Ukraine is estimated at 20-25 million hectares, of which about 10 million hectares still belong to the state. According to him, the average rent rate is $140-150 per hectare a year, which, taking into account the conservative estimate of a 10% rate, entails the cost of land of $1,500-2,000 per hectare.
“Thus, the cost of all state farmland is $15-20 billion, which can be compared with the existing IMF program in the amount of $17.5 billion or more, which twice as much as the NBU’s net reserves of $6.8 billion,” the expert said.
He urged the state to actively offer large investment projects in other sectors.
“I cannot name an economically viable project in which a private investor can now invest $1 billion,” Paseniuk stated.
The Antimonopoly Committee of Ukraine has permitted Cygnet Center LLC, part of the Cygnet Group, to acquire a stake in the charter capital of private enterprise Ruzhynsky Krai (both based in Zhytomyr region), which would grant over 50% of the votes in the management body of the agricultural company, the committee has reported on its website. “The committee permitted the company to acquire a private enterprise. After this acquisition the land bank of the Cygnet Group would expand by 5,500 ha, to 29,000 ha,” CFO of Cygnet Group Volodymyr Bondarenko told Interfax-Ukraine.
Cygnet was founded in 2011. The group cultivates around 24,000 ha in Zhytomyr and Vinnytsia region where it plans corn, soybeans, wheat and sugar beets.
The group also has dairy business (around 700 cows). The silo capacity is 60,000 tonnes. The group unites Cygnet Holding LLC, Cygnet Center LLC and Cygnet Milk LLC.
