Business news from Ukraine

NOVA POSHTA GROUP SIGNS FIVE-YEAR CONTRACT WITH IKEA

NP Logistic, part of the Nova Poshta Group, has signed a contract on the provision of logistic services to the Swedish furniture and home accessories retailer IKEA, planning to open its first store in Ukraine in 2019.
The press service of Nova Poshta reported on Wednesday that the company will provide storage and order completion services for the first IKEA city store in Kyiv.
“We are glad that IKEA selected us. This would allow uniting prime standards of fulfillment and delivery with the furniture retail,” the co-owner of Nova Poshta, Viacheslav Klymov, said.
NP Logistic’s core business is fulfillment: storage of goods at warehouses, online order completion and delivering them to customers.
As reported, in September 2018, IKEA officially announced that the group plans to open a first city store in Ukraine in 2019 in the Ocean Mall in Kyiv.
The development of the network in Ukraine will be under the aegis of IKEA Southeast Europe, which is part of the IKEA Group (Ingka Holding B.V.). The company is engaged in retail business IKEA in Croatia, Serbia, Romania and Slovenia.
Swedish IKEA is the world’s largest retail chains for furniture and household goods with 367 stores on 30 markets.
Nova Poshta was founded in 2001. Its network has more than 2,350 depots and a fleet of more than 3,600 trucks. In 2017, more than 145 million items were delivered.

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DONBASENERGO SIGNS CONTRACT WITH CHINA DONGFANG ELECTRIC TO RECONSTRUCT ONE UNIT

PJSC Donbasenergo has signed a contract with Dongfang Electric International Corporation (China) for reconstruction of unit No. 6 of the Sloviansk thermal power plant (TPP) with its division into units 6A and 6B of 330 MW each.
According to the company’s press release, the cost of the contract for the reconstruction using CFB technology (the technology of coal combustion in a circulating fluidized bed) is $684.296 million.
According to the plan, unit No. 6A will be put into operation in July 2022, unit No. 6B in July 2023. The units will burn steam coal.
The project implementation will extend the life of thermal power plants by 40 years, increase their operation efficiency, reduce specific fuel consumption and maintenance costs. The new units will comply with all ENTSO-E technical requirements and the European environmental directives.
Reconstruction of unit No. 6 of the Sloviansk TPP will significantly reduce the cost of electricity produced, burn low grade coal without using natural gas in the load range of 40-100%.
Donbasenergo Director General Eduard Bondarenko said that efficiency of the units will be at least 42%. The company seeks to receive the funds for investment in the tariff for electricity transmission in the amount of 30%. The reconstruction will be financed using the loan from a Chinese bank by 70%.
Donbasenergo operates Starobesheve (located in the occupied territory) and Sloviansk thermal power plants.

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STATE-OWNED UKRENERGO SIGNS CONTRACT WITH GENERAL ELECTRIC FOR RECONSTRUCTION OF SUBSTATIONS

National Energy Company Ukrenergo has signed a contract with General Electric Grid Solutions (Germany) and Chornomorenergospetsmontazh LLC for reconstruction of Kharkivska and Zaliutyne 330 kV substations, the company’s press service has reported. According to the press service, the power equipment, cable communication lines, relay protection and automation devices will be replaced at the substations, new gas insulated 330 kV switchgears and hybrid 110 kV switchgears will be installed.
“Kharkivska and Zaliutyne substations play a significant role in providing power supply to the eastern region of Ukraine. With further integration into ENTSO-E, the importance of these substations will increase significantly. That is why the modernization of these facilities must be carried out at the highest technological level in compliance with all reliability and safety requirements presented by ENTSO-E,” Deputy Director for Investment at Ukrenergo Volodymyr Kudrytsky said.
The project entitled “Reconstruction of Substations in the Eastern Part of Ukraine” in 2019-2022, with funding from the German government, in addition to upgrading 330 kV Kharkivska substation and 330 kV Zaliutyne substation also provides for the reconstruction of 750 kV Zaporizhska substation and 750 kV Dniprovska substation.

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GENERAL ELECTRIC SIGNS CONTRACT TO SUPPLY EQUIPMENT FOR PRYMORSKA WIND FARM IN UKRAINE

DTEK Energy Holding has signed a second contract with U.S. General Electric to supply equipment for Prymorska wind farm with a total capacity of 200 MW, the press service of the holding has reported. The first contract to supply equipment for Prymorska wind farm (100 MW) was signed in December 2017. It will be completed at the end of 2018.
The second stage of the 100 MW capacity will be also built in Zaporizhia region. The start of construction is the fourth quarter of 2018.
The land wind power division of GE will supply 26 wind power turbines with a capacity of 3.8 MW each to Prymorska wind plant. This model of a wind turbine demonstrates high performance even in conditions of low wind speed.
The total planned investment in the second stage of Prymorska wind farm will be about EUR150 million, which is comparable with investments in the construction of the first stage.
After the completion of the second stage of Prymorska wind farm, the portfolio of DTEK’s implemented projects in land wind generation will reach 400 MW.
“Our ambitions are to build 1,000 MW of solar and wind power plants by the end of 2019. This is an ambitious goal requiring huge investments by the standards of Ukraine. The construction cost of such a capacity exceeds EUR1 billion,” DTEK CEO Maksym Tymchenko said.
DTEK Renewables is the operating company that manages DTEK’s assets in the renewable energy sphere.

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ODESA PORT-SIDE PLANT SEEKS TO TERMINATE CONTRACT WITH LIBERTY GAS

PJSC Odesa Port-Side Plant plans to terminate a contract with Liberty Gas LLC, which won a tender to process gas on a tolling basis at the plant’s facilities, First Deputy Director of Odesa Port-Side Plant Mykola Schurikov has said.
“Liberty Gas has so far paid funds in the amount of $600,000 and UAH 5 million to the plant. Unfortunately, we received a letter from Liberty about the impossibility to fulfill the terms of the contract with the Odesa Port-Side Plant in the future. We begin the procedure for termination of the contract and are preparing a new tender to select a partner to work with the plant,” he wrote on his Facebook page.
According to the letter of Liberty Gas to the Odesa Port-Side Plant, posted by N Schurikov, the limited liability company transferred funds to start the plant and paid an advance for processing services. The company also entered into a contract with Vitol to supply gas and Keytrade AG to ship products.
“Unfortunately, today the global natural gas market has an unjustified increase in the cost of gas, and over the past several weeks the gas price has increased by more than 50%, which has a very negative effect on the economic performance under the contract between our enterprises,” the company said in the letter.
As reported, at the end of July, the Odesa Port-Side Plant, which has been idle since the end of April this year, signed a contract to process gas on the tolling basis at the facilities of the enterprise with Liberty Gas LLC, which won the corresponding tender. The launch was scheduled for the end of September.

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GLOBAL SUPPLIER OF ENGINEERING SERVICES TETRA TECH AWARDED $85 MLN CONTRACT BY USAID TO SUPPORT ENERGY SECURITY IN UKRAINE

Tetra Tech, Inc. (NASDAQ: TTEK), a large global supplier of consulting and engineering services, has announced that that the U.S. Agency for International Development (USAID) awarded the company an $85 million contract to support enhanced energy security in Ukraine. “Tetra Tech will provide technical services to support private sector-led energy investments, increased renewable energy generation, and reliable and affordable energy for all Ukrainians,” the U.S. company said.
The company said that specific tasks include developing energy market models to create competitive energy market reforms, completing renewable energy pre-feasibility assessments, and developing creative financial incentive mechanisms to facilitate private sector investment in renewable energy.
Tetra Tech also will collaborate with local organizations in implementing the program to develop Ukraine’s institutional capacity, encourage ownership of results, and ensure sustainability of reforms. The company reminded that the five-year USAID/Ukraine Energy Security through Competitive Energy Markets Program aims to improve the legal and regulatory environment in the energy sector and increase the resilience of energy supplies in Ukraine.

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