Business news from Ukraine

USAID acquires 85 grain railcars for Louis Dreyfus

The USAID Economic Support for Ukraine Project (USAID Project) has purchased 85 grain railcars for Louis Dreyfus, the largest exporter of Ukrainian grain and oilseeds among foreign companies, the project’s press service reports on Facebook.

According to the report, the first 20 railcars have already been delivered to one of the company’s elevators.

USAID expects that the use of additional railcars will increase grain exports by 110 thousand tons annually. In addition, Louis Dreyfus will be able to expand its geography and ship grain from regions of Ukraine where it was not possible to export grain.

The Louis Dreyfus representative office in Ukraine owns 660 railcars, some of which are located in the temporarily occupied territories. The agricultural trader exports grain to Asia, Africa and Europe.

The USAID clarified that the purchase of equipment for agricultural companies is carried out within the framework of the Agriculture Sustainability Initiative in Ukraine (AGRI-Ukraine), implemented by the United States Agency for International Development, to mitigate the global food crisis, which has been exacerbated by Russia’s war against Ukraine.

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Ministry of Economy and USAID launch $15 mln grant program for medium and large enterprises

The Ministry of Economy and USAID are launching a $15 million grant program for medium and large enterprises, under which one business will be able to receive a grant of $250,000 to $2 million.

“Companies with an estimated minimum annual sales of $8 million in hryvnia equivalent are invited to participate in the program. This figure is important given that the target sales growth based on the results of the concept implementation should be at least $2 million,” the Ministry of Economy said in a release.

It is noted that grant funding should be used by program participants to develop their business, in particular, to increase sales, increase exports and create new jobs.

The condition for participation in the program is the investment of additional funds – the company’s own funds or other resources attracted by the company. The program participants will be selected in two stages: the first is the evaluation of concepts, and the second is the evaluation of detailed grant applications from participants who have passed the first stage. One of the criteria for evaluating concepts will be the number of jobs created.

It is specified that the concepts must be submitted no later than February 29, 2024. They are expected to be implemented within 12-24 months.

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Ministry of Economy and USAID launch grant program for medium and large enterprises

The Ministry of Economy together with USAID launch a grant program for medium and large enterprises for $15 million, under which one business will be able to receive a grant from $250 thousand to $2 million.

“Businesses with an estimated minimum annual sales volume of $8 million in hryvnia equivalent are invited to participate in the program. This indicator is important due to the fact that the target increase in sales by the results of the concept should be at least $2 million,” – said in the release of the Ministry of Economy.

It is indicated that the grant funding should be directed by the program participants to business development, in particular, to increase sales, increase exports and create new jobs.

The condition for participation in the program is the investment of additional funds – own funds of the enterprise or other resources attracted by the enterprise. The selection of the program participants will take place in two stages: the first stage – evaluation of concepts, the second stage – evaluation of detailed grant applications from the participants who passed the first stage. One of the criteria for evaluating concepts will be the number of jobs created.

It is specified that concepts should be submitted no later than February 29, 2024. It is expected that they will be implemented within 12-24 months.

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USAID triples grant support for Ukrainian processing companies

The United States Agency for International Development (USAID) has tripled its grant support under the Competitive Economy of Ukraine program to $11 million, the Ministry of Economy reported on its website on Thursday.

It is noted that the decision was made taking into account the large number of applications and significant interest from processing enterprises.

The increase in funding will also increase the number of grants by about three times, to about 75.

It is specified that the grants will support businesses in the production of innovative products, modernization of production, reduction of manual labor, import substitution and export growth to fill niches previously occupied by Russian and Belarusian products, and localization of production of goods necessary for recovery.

USAID’s Competitive Economy Program supports Ukrainian businesses to improve their competitiveness in Ukraine’s domestic and international markets, helps build a simplified and transparent business climate, and provides Ukrainian companies with opportunities to take advantage of international trade.

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“Ukrzaliznytsya” with USAID support will finalize design of construction of a euro track from Polish state border to Lviv

Ukrzaliznytsia JSC (UZ) with support from the U.S. Agency for International Development (USAID) will develop a feasibility study (FS) of the euro track project that will connect Mostyska station on the Polish border to Sknylyv (a settlement in the suburbs of Lviv), the Ministry of Community Development, Territories and Infrastructure (MCDI) said on Friday.

The corresponding memorandum was signed by Deputy Prime Minister for Restoration Oleksandr Kubrakov, U.S. Ambassador Bridget Brink, from UZ – head of the board Eugene Lyashchenko and board member Vyacheslav Eremin.

It is indicated that further development of the 1435 mm wide section of the track will include its connection to Uzhgorod, Kovel, Chernivtsi, and at a later stage to Kiev and eastern Ukraine.

“The track will be used not only for freight, but also for passenger transportation in the direction of EU countries,” Kubrakov said.

He stressed that one of the important tasks to increase export capacity is to modernize and replace the tracks, and if necessary, to build new ones.

“The signing of the Memorandum with USAID will have a tangible impact on the recovery of the Ukrainian economy and contribute to the European integration processes in general,” the Deputy Prime Minister said.

Earlier, the head of the UZ board, Yevhen Lyashchenko, told the Interfax-Ukraine news agency that the design of the construction of the Euroway from the state border with Poland to Sknyliv will be completed by the end of this year. According to him, the implementation of this project will make it possible to organize communication by euro track from Lviv to Krakow, Prague and Vienna.

As reported, the construction of euro track in the direction Mostyska-Sknyliw was planned to begin in 2020. Also in 2020 the government included this project in the list of priority investment projects until 2023.

The railway station Sknyliw is located in Lviv at a distance of 5.5 km from the Lviv station, 3 km from Lviv airport and 1 km from the bus station.

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“Nibulon” received second batch of hopper cars from USAID

One of the largest grain market operators in Ukraine, JV Nibulon LLC (Mykolaiv), has received the second batch of 10 new hopper cars for grain transportation from USAID’s Economic Support for Ukraine project, the company’s press service reported.

“In today’s conditions, it is extremely important for companies working in ports, receiving and sending cargo, to feel international support. Hopper cars, as evidence of this support, will travel throughout Ukraine. So, thanks to the assistance of the USAID project, exporters will be able to retain highly professional staff at blocked river infrastructure facilities and offer better purchase prices to agricultural producers,” the press service quoted Nibulon’s Director of Government Relations and Sustainable Development Michael Rizak as saying.

According to the report, the USAID project will transfer a total of 50 modern hopper cars for Nibulon’s needs, each of which can carry up to 70 tons of grain. They were manufactured at the Experimental Mechanical Plant “Karpaty” (Lviv Oblast) and immediately sent for loading to the grain trader’s branch nearest to production – “Smotrich” near Kamenets-Podilskyi in Khmelnytskyi Oblast. From here they will go to ports in the Danube region.

“To compensate for lost river logistics, which reached 4.2 million tons of grain before the war, Nibulon needs one route train of 50 wagons for each of the blocked river ports. With the railcars from the USAID project, the company will have 212 railcars, which is about half of the need,” the press service of the grain trader specified.

Assistance to agricultural producers and infrastructure companies is part of the Agricultural Sustainability Initiative in Ukraine, implemented by the U.S. Agency for International Development. It is aimed at helping Ukraine increase the potential for grain production, storage, transportation and export.

JV Nibulon LLC was established in 1991. Before the Russian military invasion, the grain trader had 27 transshipment terminals and complexes for receiving agricultural crops, capacity for one-time storage of 2.25 million tons of agricultural products, a fleet of 83 vessels (including 23 tugboats), and owned the Nikolaev shipyard.

“Nibulon” before the war cultivated 82 thousand hectares of land in 12 regions of Ukraine and exported agricultural products to more than 70 countries.

The grain trader exported the maximum 5.64 million tons of agricultural products in 2021, reaching record shipments to foreign markets in August – 0.7 million tons, in the fourth quarter – 1.88 million tons and in the second half of the year – 3.71 million tons.

Nibulon’s losses from the full-scale military invasion of the Russian Federation reached $400 mln. Currently, the grain trader is operating at 30% of its capacity, has created a special unit for demining agricultural land and has started production of the first vessel for demining international waterways at its shipyards in Mykolayiv.

The grain trader recently raised EUR27m from the Danish Export Investment Fund (EIFO) to increase the capacity of the Bessarabsky branch in Izmail, where an elevator and a flour mill will be built.

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