Business news from Ukraine

UKRENERGO PLANS TO ATTRACT EUR 24.5 MLN FROM KFW

National Energy Company Ukrenergo plans to attract another EUR 24.5 million from Kreditanstalt Fuer Wiederaufbau (KfW, Germany) to implement a project to increase effectiveness of electricity transmission, which is the third phase of reconstruction and automation of the company’s substations.
According to a company’s press release, the relevant intentions were recorded in the protocol on the results of the intergovernmental negotiations held on May 20 in Kyiv with the participation of the company.
“This will significantly improve the reliability of power transmission and ensure the technical compliance of equipment and network operation with the standards and requirements of ENTSO-E [the European Network of Transmission System Operators for Electricity],” the press service reported, citing Ukrenergo Deputy Director for investment Volodymyr Kudritsky as saying.
In general, KfW announced its readiness to provide more than EUR 80 million for the implementation of reforms in a number of sectors of the Ukrainian economy.
During the meeting, Ukrenergo spoke about the implementation of a roadmap for the integration of the Ukrainian power grid with ENTSO-E. In this direction, the company cooperates with the German transmission system operator 50 Hertz, which is now a key partner of Ukrenergo in the process of integrating networks.

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GERMAN KFW COULD PROVIDE EUR 150 MLN FOR ROAD REPAIR IN UKRAINE AND DREDGING WORKS AT ODESA SEAPORT

Germany’s state-run development bank (KfW) could provide EUR 60 million to Ukraine for the completion of construction of a breakwater and dredging works at the Odesa seaport and EUR 90 million for overhaul of H08 Zaporizhia-Mariupol highway and restoration of H32 Pokrovsk-Bakhmut-Mykhailivka road.
“Negotiations with KfW on a loan: EUR 60 million to complete the construction of a breakwater in the port of Odesa and EUR 90 million to overhaul H08 Zaporizhia-Mariupol roads,” Deputy Infrastructure Minister of Ukraine for European integration Viktor Dovhan wrote on his Facebook page.
At the same time, according to a posting on the website of the Infrastructure Ministry, Minister Volodymyr Omelyan confirmed Ukraine’s interest in borrowing from the Federal Republic of Germany in the amount of EUR 150 million (the KfW loan) provided for the restoration of transport infrastructure in the eastern regions of Ukraine. In particular, the Infrastructure Ministry plans to implement the following projects: the construction of a breakwater and the implementation of works to deepen the water area of the port of Odesa; repair works at the national road N08 Boryspil-Dnipro-Zaporizhia (through Kremenchuk)-Mariupol on the Zaporizhia-Mariupol road section and the restoration and improvement of the transport and operational condition of the H32 Pokrovsk-Bakhmut-Mykhailivka state-sustained highway.
According to the Infrastructure Ministry, Germany also expressed interest in participating in the modernization of the electric locomotives of JSC Ukrzaliznytsia and in electrifying the railways, in particular, in the south of Ukraine, near the ports.
In addition, as a result of negotiations with Germany, Ukraine will receive an additional 20,000 bilateral permits for road haulage, which will be valid until the end of January 2019.
In addition, the parties agreed to consider the possibility of increasing the quota of permits for 2019.

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GERMAN DEVELOPMENT BANK TO ISSUE $17 MLN LOAN TO OTP

The German Development Bank (KfW) will provide OTP Leasing (Kyiv) with a subordinated loan of $17 million under the Agrofinancing program.
According to a press release of KfW, the corresponding loan agreement was signed by the parties on June 19.
The loan is granted for seven years with payment at the end of the term.
“To date, KfW has cooperated with banks in the Ukrainian financial sector, but leasing is a good alternative for financing investments, especially for small and medium-sized enterprises in agricultural sector. Therefore we are very pleased with our new partner, OTP Leasing, and, providing it with a subordinated loan, we are implementing a new financial instrument in Ukrainian leasing,” KfW Director in Ukraine Lutz Horn-Haacke said.
According to the report, the loan attracted by OTP Leasing will allow to provide Ukrainian companies with $180 million financing this year instead of the planned $100 million.
OTP Leasing is part of the European financial group OTP Group. The company was founded in June 2008 as a subsidiary of OTP Bank. It provides a full range of leasing services, works with the leading manufacturers of machinery, equipment and vehicles.

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GERMAN STATE DEVELOPMENT BANK TO GRANT EUR 9 MLN FOR SOCIAL INFRASTRUCTURE DEVELOPMENT IN UKRAINE

The Cabinet of Ministers of Ukraine has approved the signing of an agreement with the German State Development Bank (KfW, Germany) on raising EUR 9 million of financial support for the development of social infrastructure. “The Cabinet of Ministers of Ukraine on March 28 adopted the resolution on signing a financial and project agreement between the Cabinet of Ministers of Ukraine, represented by the Ministry of Social Policy of Ukraine and the Ukrainian Social Investment Fund, and KfW for the amount of EUR 9 million,” the press service of the Ministry of Social Policy said.
It is noted that the implementation of the act will allow obtaining aid from the German government in the framework of bilateral cooperation within the “Restoration in the east of Ukraine” project.

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