Business news from Ukraine

EU LAUNCHES GRANT FACILITY FOR SMES IN UKRAINE, GEORGIA, MOLDOVA WORTH EUR 200 MLN

KYIV. May 21 (Interfax-Ukraine) – The European Commission at the Eastern Partnership in Riga has launched a new 10-year grant facility worth EUR 200 million to support small and medium enterprises (SMEs) in Ukraine, Georgia and Moldova as part of the agreements on Deep and Comprehensive Free Trade Areas (DCFTA).

According to a European Commission press release issued on May 21, this contribution is expected to unlock at least EUR 2 billion of new investments by SMEs in the three countries, which are to be financed largely by new loans supported by the facility. The financial means for the investments will largely come from the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB).

“The European Commission promised concrete steps to boost trade and the exchange between the Union and our Eastern partners… They are a sign of the EU’s strong commitment to further deepen our cooperation with our Eastern partners,” President of the European Commission Jean-Claude Juncker said.

According to the documents, this includes projects common for all three countries and one more project for each country. For Ukraine this year, a guarantee facility worth EUR 330 million is to be launched, which includes an EU grant of EUR 40 million.

The EBRD facility to support SMEs worth EUR 8 million will be launched for Georgia (UAH 6 million of the EU grant) and for Moldova the EIB facility worth EUR 300 million to support fruit gardening will be launched (EUR 8 million of the EU grant).

The common projects for the three countries include a EBRD facility worth EUR 69 million on technical assistance to SMEs (EU grant is EUR 10 million to guarantee EBRD direct lending).

This year it is planned to launch two smaller projects: EBRD worth EUR 6 million (EU grant is EUR 4 million) – business advice on exports and new standards compliance; and EBRD, EIB and KfW worth EUR 90 million (EU grant is EUR 15 million) – for currency hedging.

It is also planned to launch two larger facilities: DCFTA Facilitation from the two banks: EIB with EUR 180 million (EU grant is EUR 22 million) macro-finance, market access and guarantees; and EBRD with EUR 422 million (EU – EUR 19 million) – access to finance, trade finance and advise for SMEs.

EIB and EBRD will extend DCFTA Facilitation facilities for Phase II and Phase III with provision of EUR 780 million (EU – EUR 34 million) and EUR 861 million (EU – EUR 38 million) respectively.

AGRICULTURE MINISTRY HOPES TO RAISE UP TO UAH 1 BLN DURING PRIVATISATION OF 150-180 COMPANIES IN 2015

KYIV. May 21 (Interfax-Ukraine) – Around UAH 1 billion could be raised for the agricultural sector as a result of the privatization of 150-180 companies in 2015, Agricultural Policy and Food Minister Oleksiy Pavlenko has said.

“This year we see 150-180 companies that will be offered for the privatization, and this is a realistic list. The total sum that we see for these companies is up to UAH 1 billion raised for the sector,” he said during discussion on the prospects of privatization and the development of key state enterprises under the management of the Agricultural Policy and Food Ministry.

Pavlenko said that in 2014 only, the total loss of the said agricultural companies reached UAH 1.5 billion.

He said that during the privatization around 100,000 Ukrainians could receive land parcels and then income from land leasing.

The ministry is also preparing to hold roundtable talks on the sale of Ukrspyrt state enterprise.

“The complex of distilleries could cost up to $300 million. These are not simply distilleries, but this is the right to produce, a license on production and not only spirit. This is bioethanol, technical spirit, and the sector is very interesting,” he said.

UKRAINIAN ENERGY MINISTER SIGNS REVISED DOCUMENTS ON INTERNATIONAL ENERGY CHARTER

KYIV. May 21 (Interfax-Ukraine) – The Energy and Coal Industry Minister of Ukraine, on behalf of Ukraine, has signed the final document of the Ministerial (The Hague II) Conference on the International Energy Charter on May 21, 2015, Head of the European integration department at the Ukrainian Energy and Coal Industry Ministry Mykhailo Bno-Airiyan has said.

“This document is not obliging, but it stresses the desire of all signers to ensure energy security in the world, including in Ukraine. Unfortunately, the previous agreement of 1991, the so-called European Energy Charter, required large modernization due to the change of the general situation in the global energy sector,” he wrote on his Facebook page.

He said that the revised document was signed by around 70 countries.

AGROSPETSSERVICE TO LAUNCH EVEVATOR OF 76,000 TONNES IN KIROVOHRAD REGION BY 2017

KYIV. May 20 (Interfax-Ukraine) – Agrospetsservice (Kirovohrad region) intends to launch its own elevator with a design capacity of 76,000 tonnes by 2017.

Founder of the group Serhiy Tarasov told reporters at the Agri Invest Forum in Kyiv that this year the company would put into operation the second stage of an elevator for 18,000 tonnes.

“Last year the first stage was commissioned – it is about 18,000 tonnes,” Tarasov said.

According to him, the entire project will cost around EUR15 million.

The expert confirmed the intention to build a pig farm for 5,250 broodstock animals and a feed mill in Kirovohrad region. The project cost is estimated at EUR22 million.

Agrospetsservice is engaged in the cultivation of grains, oilseeds and sugar beets in Kirovohrad region. Its land bank is 41,000 ha. Last year the group harvested 41,600 tonnes of wheat, 36,650 tonnes of sunflower, 15,400 tonnes of corn, 10,900 tonnes of soybeans, and 1,950 tonnes of barley.

The group also includes Kapitanivka sugar factory.

INSTITUTE OF FINANCIAL OMBUDSMAN TO BE CREATED IN UKRAINE

KYIV. May 19 (Interfax-Ukraine) – Ukraine will create a financial ombudsman institute.

This is stipulated in the comprehensive program for financial sector development for 2015-2020, which was approved by the National Reforms Council.

To improve the standards of protecting the rights of consumers and financial market investors, this program will also raise the standards of the disclosure of information on financial services, establishes clear sanctions for market participants for violating the rights of financial services consumers, introduces a mechanism to protect the rights of minority shareholders, and increases the transparency of payments to the depositors of banks undergoing liquidation.

In general, the program foresees three stages of reform: cleaning the financial sector, laying the foundation for its development and the implementation of development measures.

MILKILAND TO PRODUCE 15,000 – 20,000 TONNES OF CHEESE IN UKRAINE IN 2015

KYIV. May 19 (Interfax-Ukraine) – Milkiland-Ukraine, a subsidiary of Milkiland dairy group with assets in Ukraine, Russia and Poland, plans to produce 15,000-20,000 tonnes of cheese in 2015.

“We want to reach a figure of 15,000-20,000 tonnes. We planned 30,000 tonnes, but I see we won’t be able to reach this figure,” company CEO Anatoliy Yurkevych said at the Agri Invest Forum in Kyiv.

According to him, last year the group produced 28,000 tonnes of cheese in Ukraine.

Yurkevych said that Milkiland plans to increase production at its Russian enterprise Syrodel.

To achieve this, the enterprise was reconstructed, which allowed it to increase its capacity by up to 15-20 tonnes per day.

“The Russian factory last year began producing cheese from June. In connection with these events (the embargo on cheese supplies to Russia), we reconstructed it and increased its capacity. The maximum capacity there is 15-20 tonnes of cheese a day,” he added.

Yurkevych also said that cheese production at the Polish factory of the group dropped by 4 or 5 times in connection with the ban on supplies to Russia.

The group plans to produce 3,500 tonnes of cheese at the Russian company, while the expert found it difficult to forecast the volume of output at the Polish plant.