Business news from Ukraine

ENERGOATOM INTRODUCING ELECTRONIC PROCUREMENT IN ALL ITS DIVISIONS

KYIV. May 25 (Interfax-Ukraine) – President of National Nuclear Generating Company Energoatom Yuriy Nedashkovsky has signed the order to introduce an electronic procurement system in all the divisions of the company, the press service of Energoatom has reported.

“The decision was made after analyzing the results of the use of the electronic procurement system in the company’s division, Management of Affairs. Over the period of the realization of the pilot project using the system over 15 trading session were held, and over UAH 230,000 was saved compared to the use of the usual procedure [around 25% of the total sum],” the press service said.

By using the electronic procurement system, the divisions of Energoatom will purchase goods, labor and services for which a permanently operating market exists and their cost is equal to or more than UAH 10,000, does not exceed UAH 1 million for goods and services and UAH 5 million for labor. Energoatom will hold tenders via the Prom.ua and e-tender.biz electronic sites.

On October 31, 2014, Energoatom signed a memorandum with Transparent Procurement LLC to create a transparent and effective state procurement system in Ukraine. On February 12, 2015 Energoatom became the first state company in Ukraine which held a tender via the electronic state procurement system.

Energoatom operates all four nuclear power plants in Ukraine. It operates 15 power units of Zaporizhia, Yuzhnoukrainsk, Rivne and Khmelnytsky nuclear power plants, equipped with water-cooled power reactors, which have a total installed electrical capacity of 13.835 GW.

EIB TO PROVIDE EUR 400 MLN LOAN TO DEVELOP MUNICIPAL INFRASTRUCTURE IN UKRAINE

KYIV. May 25 (Interfax-Ukraine) – The European Investment Bank (EIB) will provide a framework loan of EUR 400 million to restore and develop municipal infrastructure in Ukraine, according to a report released by the bank.

The EIB Group’s Board of Directors approved this loan on May 19, the bank said in a press release posted on its website.

The bank said that the project will extend the lifespan of critical urban infrastructure in the energy, water and sanitation sectors, will reduce losses, improve energy efficiency, reduce the intensity of greenhouse gas (GHG) emissions, and will contribute towards improving energy and water supply security.

According to the report, the total cost of the project is EUR 800 million, and the Regional Development, Construction, Housing and Utilities Economy Ministry will act as a partner in designing the project.

GOVERNMENT PERMITS BIOFARMA TO EXPORT BLOOD PRODUCTS, APPROVES EXPORT VOLUME

KYIV. May 25 (Interfax-Ukraine) – The Cabinet of Ministers has approved the proposal of the Health Ministry to permit PJSC Biofarma in 2015 to export donor blood components and products manufactured from blood and its components.

Corresponding decree No. 522-r dated May 25 has been posted on the website of the government.

According to the decree, donor blood products and its components are sold under the list and volume approved by the Cabinet.

As reported, on May 14 company with foreign investment PJSC Biofarma said that it intended to stop the production of drugs within seven days due to its inability to obtain government approval to export finished blood products under previously signed contracts. Biofarma Board Chairman Oleksandr Makovsky said that this concerns contracts for the supply of blood products worth a total of $7 million to Mongolia, Vietnam, Azerbaijan, Kazakhstan, and Belarus.

GERMANY READY TO FUNNEL EUR 200 MLN IN ENERGY EFFICIENCY FUND CREATED BY UKRAINE – ZUBKO

KYIV. May 22 (Interfax-Ukraine) – The government of Germany has announced its readiness to funnel EUR 200 million into the Energy Efficiency Fund, which is being created by Ukraine to raise assets from international financial organizations for projects to boost energy efficiency in Ukraine.
The condition for disbursing the German funds is the development by the Ukrainian government of a model to return the disbursed funds, Deputy Prime Minister and Minister for Regional Development, Construction, Housing and Utilities Economy Hennadiy Zubko said during a briefing at a forum on energy efficiency partnership in Kyiv on Friday.
“There is a clear offer from the German government about EUR 200 million, which could be injected in that Fund, but they need to be clearly demonstrated how these assets will be returned by the consumers of that Fund,” he said.
According to Zubko, as part of the search for such a model, the Energy Efficiency Fund is mulling the Ukrainian side’s financial participation in filling up the Fund at the expense of money left after the payment of subsidies allocated for the compensation of households’ housing and utilities costs, due to the introduction of energy efficiency and energy saving technologies, he said.
“We had a very simple proposal: to send that money to replenish the Fund, and due to a reduction in gas consumption, every year we’ll have fewer people who will apply for the subsidies,” he added.
According to him, the Ukrainian government is also in talks on raising loans for Kyiv-based Oschadbank, which participates in the Oschadny Dim (Saving
House) national program for partial reimbursement of interest rates on loans allocated to boost energy efficiency.
“I won’t announce [preliminary results of the talks] now, but we have initiated the talks with almost all [international financial organizations]:
the IFC, the European Investment Bank, the World Bank, and I think it also concerns investment funds which work not only on our market,” he added.
Zubko said a commercial organization was created in Germany to support energy efficiency in Ukraine.
“This is a commercial organization, which is ready to come with technologies, which is ready to bring money for these technologies and implement energy efficient projects. I simply would like to mention how huge interest in Ukraine and in opportunities to work on a huge market estimated at UAH 300 billion is,” he said.

FOREIGN INVESTORS INTERESTED IN BUYING SHARES IN FOOD AND GRAIN CORPORATION – AGRICULTURE MINISTRY

KYIV. May 22 (Interfax-Ukraine) – Foreign companies are interested in buying shares in PJSC State Food and Grain Corporation of Ukraine, Minister of Agricultural Policy and Food Oleksiy Pavlenko has said.
“There is the proposal to enter the corporation’s capital,” he told reporters at a panel discussion on the prospects of the privatization and development of the key state-owned enterprises from the scope of the Agricultural Ministry.
He added that the capabilities of foreigners in this process have not been discussed.
“Now there is the limit – it is the Chinese contract. But there are preliminary negotiations, there is a great interest of investors, American partners, Qatar, investors from Saudi Arabia, from China: at least two companies were ready to invest in this direction for the modernization of our silo capacity,” Pavlenko said.
According to him, the ministry will prepare a presentation which will show how it can attract investors through debts and capital for investment in this sector.
According to his estimates, the modernization of the corporation’s elevator capacities requires up to $200 million, the funds are foreseen in the second tranche under the Chinese contract.

AMSTAR EUROPE STUDYING BUILDING MANOR SPRINGS HOUSING ESTATE IN KYIV REGION

KYIV. May 22 (Interfax-Ukraine) – Amstar Europe, part of Amstar investment company (Denver, U.S.) is studying the possibility of realizing a project to build a cottage estate with the working title Manor Springs with almost 200 houses on a land parcel of 80 hectares on the Obukhiv highway in Kyiv region if positive changes in the Ukrainian property market are seen, Amstar Europe Vice President Oleksandr Hryban told Interfax-Ukraine at the “Crisis Square
Meter: Concept, Promotion, Sales” conference in Kyiv on Thursday.
“Expenses on engineer preparation and the cost of entering the market were
large: We would reach around $50-60 million in general,” he said when asked about the cost of the realization of the project today.
Hryban said that if investors make a positive decision on the project, the realization of its first phase with around 40 houses could be launched in 2016.
“Now we’re approving the detailed plan of territories, we carried out engineer and design works, maybe we will start engineer preparation of the project to start the realization of the first phase next year if the market changes,” he said.
Hryban said that further investment of Amstar in projects in Ukraine depends on the successful return of investment as part of the Skyline residential complex in Kyiv.
“If we see that we start receiving back money, we will get carte blanch from the investor who will allow us to reinvest these funds,” he said.
The decision of the possible reinvestment by Amstar in new projects in the Ukrainian real estate market could be linked to restrictions on carrying out transactions with foreign currency introduced by the state, he said.
Hryban said that the project foresees the construction of houses with a gross area of 280-430 square meters on land parcels of 0.13-0.15 hectares, and the houses would have approaches to artificial water reservoirs created by reclaiming channels of the old estuary of the Dnipro River.
Today, the acceptable price of one square meter for Amstar if the company launches the project is to be $2,000-2,200, taking into account land parcels, he said.