Business news from Ukraine

STATE-RUN NAFTOGAZ PAYS $500 MLN ON LOAN UNDER WORLD BANK GUARANTEES

NJSC Naftogaz Ukrainy has completed repayments under the loan agreements worth $500 million received under the World Bank’s guarantees and state guarantees, the press service of the company has reported.
According to Naftogaz, within the framework of these loan agreements, which were signed on December 30, 2016, the company managed to purchase about 5 billion cubic meters of natural gas from the European direction over two years.
“In general, since 2014, Naftogaz has redeemed the state-guaranteed loan debt amounting to about $3.2 billion in a timely manner and in full. Naftogaz’s loan portfolio has decreased by 6.6 times since 2014 and is a record low,” Naftogaz CEO Andriy Kobolev said.
The company noted the important role of further cooperation with the creditors and noted that this year the company plans to pump 3 billion cubic meters of gas more into underground gas storage facilities (20 billion cubic meters) compared to the previous year.

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EBRD ISSUES EUR 3 MLN LOAN TO UKRAINIAN WOODWORKING COMPANY ZUNAMI

The European Bank for Reconstruction and Development (EBRD) has provided a loan of EUR 3 million to the Ukrainian woodworking company Zunami to finance the investment program, EBRD Senior Adviser for External Affairs Anton Usov has said.
“As a result of the project, the company will introduce new methods of waste management, which will allow reducing the volume of oak raw materials needed for production of lamella by 23%, or 3,000 tonnes per year,” he wrote on his Facebook page.
According to Usov, the loan funds will be supplemented by means of technical cooperation of the European Union in the amount of up to EUR 70,000 under the EU4Business program and a stimulating grant of more than $170,000 from the Global Environment Facility under the FINTECC program.
Zunami LLC (Volyn region) was founded in 2001. The company is engaged in a full cycle of wood processing. Its capacity is 2 million square meters per year. Zunami produces wooden flooring and solid biofuel – oak shavings pellets.
Wizz Air will raise frequency of flights from Lviv airport to Slovakia, Poland, Germany from Oct 20
KYIV. June 13 (Interfax-Ukraine) – The Hungarian low cost airline Wizz Air from October 20 will increase the frequency of flights from Lviv International Airport to Bratislava (Slovakia), Wroclaw, Gdansk (Poland), Berlin and Dortmund (Germany) for the winter of 2019/2020 season.
According to the airport’s Facebook page, in particular, such plans are linked to the popularity of these airline destinations from/to Lviv, the average monthly workload of which in 2019 is 83%.
Thus, the number of flights to Bratislava will increase from two to five flights a week. They will be performed on Mondays, Tuesdays, Wednesdays, Fridays, and Saturdays.
The number of flights to Wroclaw will rise from three to five flights. They will be performed on Tuesdays, Wednesdays, Thursdays, Saturdays, and Sundays.
Flights to Gdansk and Berlin will be carried out twice as often – four times a week (on Mondays, Wednesdays, Fridays, and Sundays).
The number of flights in the direction of Dortmund will grow from two to three per week (on Mondays, Wednesdays, and Fridays).

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AUSTRIAN KRONOSPAN TO GET EBRD’S LOAN FOR BUILDING NEW PLANT IN UKRAINE

The European Bank for Reconstruction and Development (EBRD) organizes a syndicated loan of EUR116 million for the manufacturer of sheet materials based on wood Kronospan UA (Novovolynsk, Volyn region), which is part of Kronospan Group, for the construction of a new plant, according to a bank press release.
“The EBRD will be the lender of the record for the amount of EUR116 million, while EUR50 million out of the total will be syndicated to commercial banks Raiffeisen Bank International AG and Raiffeisenlandesbank Oberösterreich under an A/B loan structure,” the report says.
“The funds will finance investments in new production facilities in compliance with relevant EU standards and regulations. The company plans to expand its production in Ukraine with the construction of a new facility in Novovolynsk, western Ukraine,” it reads.
“Specialized energy efficient equipment, including a 45 MW biomass boiler energy plant, a new transformer unit and a new precipitator filter will provide an alternative power supply solution, cut energy losses and help reduce dust emissions. High value-added products manufactured at these facilities are expected to lead to oriented strand board (OSB) imports substitution and more exports from Ukraine to the EU single market and other countries,” according to the document.
Kronospan was created in Austria in 1897. Currently it is the leading European manufacturer of wood-based sheet materials, operating in 21 countries. Total sales exceed EUR2.7 billion per year.

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EBRD COULD ORGANIZE EUR 80 MLN LOAN TO SUPPORT RENEWABLE ENERGY IN UKRAINE

The European Bank for Reconstruction and Development (EBRD) could organize a syndicated loan of EUR 80 million for state-owned Ukreximbank (Kyiv) to support renewable energy and energy efficiency private investments in Ukraine.
According to a posting on the bank’s website, EBRD will provide EUR 40 million from own account.
The provision of the loan is pending the approval of the EBRD Board on June 19, 2019.
Ukreximbank, a wholly owned state bank, was established in 1992. It ranked third among 77 banks in Ukraine in terms of total assets worth UAH 232.064 billion as of January 1, 2019, according to the National Bank of Ukraine (NBU).

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BORYSPIL AIRPORT PLANS TO REPAY UAH 3.6 BLN OF LOAN TO JAPAN BANK FOR INTERNATIONAL COOPERATION BEFORE 2032

State-owned enterprise (SOE) Boryspil International Airport (Kyiv region) plans to repay UAH 3.6 billion of debt under a state-secured loan of the Japan Bank for International Cooperation (JBIC) received 10 years ago to build Terminal D in accordance with the issue terms.
“It remains for us to pay the Japanese bank UAH 3.6 billion at the current hryvnia exchange rate, which was attracted to build Terminal D. We paid about 20%,” Deputy Director General for Economics and Finance of the Boryspil airport Kyrylo Zvonarev said at a press conference at the airport on Thursday.
According to him, the total amount of the loan at the current exchange rate is almost UAH 5 billion and approximately UAH 1.4 billion was paid. He also said that according to the payment plan, the airport will repay the loan before 2032.
“Twice a year we have to pay approximately UAH 150 million,” the deputy director said.
At the same time, Zvonarev expressed concern that setting a rate of transfer to the national budget of the company’s net profit at 90% could put at risk the repayment of the said loan.

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EUROPEAN INVESTMENT BANK ISSUES EUR 200 MLN LOAN TO UKRAINE

The European Investment Bank (EIB) has issued a long-term low-interest loan in the amount of EUR 200 million to the Cabinet of Ministers of Ukraine within the Early Recovery Program, Head of the EIB Representation in Ukraine Jean-Erik De Zagon has said, when opening six repaired medical facilities in Kharkiv.
According to him, the funds are used to invest in the restoration of key infrastructure objects in Donetsk and Luhansk regions, as well as to ensure adequate living conditions for internally displaced persons.
He noted that the purpose of the loan is to improve the living standards of people in Eastern Ukraine.
“Our Early Recovery Program was specifically developed to help people of Eastern Ukraine, including thousands of IDPs, deal with tough challenges they are facing following the armed conflict. This EUR 200 million program is part of our overall EUR 5.8 billion portfolio in Ukraine. It aims at improving living standards for people in terms of housing, healthcare and education. And it is a convincing proof that as an EU Priority Partner, Ukraine can greatly benefit from EU support and financing. We are happy to provide help where it is needed most and that it will directly impact the lives of ordinary citizens,” the banker said.

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