Business news from Ukraine

ENERGY EFFICIENCY FUND PLANS TO FINANCE OVER 16,000 ENERGY-EFFICIENT MODERNIZATION PROJECTS WITHIN 5 YEARS

The Energy Efficiency Fund plans within five years to finance over 16,000 projects under the Energodom program to support energy-efficient modernization for homeowner associations, Director of the fund Yulia Holovatiuk-Ungureanu has said.
“Our Energodom program began its work on September 3. We are starting the phase of project implementation. We plan that by 2023 almost 9,000 projects will be implemented, and by 2025 more than 16,000 projects,” the director of the fund said during the presentation of the Energodom program on Wednesday.
According to her, by the end of 2025, gas savings due to energy-efficient modernization will amount to 1.5 billion cubic meters.
The Minister of Development of Communities and Territories of Ukraine Olena Babak said that energy-efficient modernization will reduce the level of thermal energy consumption for the “light” package by 20%, for the “complex” package – by 60%.
In addition, 720 energy auditors have passed certification to date, and over the next two years their number should grow to 5,000, Hennadiy Zubko, Deputy Prime Minister and Minister of Regional Development, Construction, Housing and Utilities Economy in 2014-2019, said.

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UKRTRANSGAZ WANTS TO REVISE MODERNIZATION LOAN FOR UKRAINE’S SECTION OF URENGOY-POMARY-UZHGOROD GAS PIPELINE

Ukrainian gas transmission system (GTS) operator JSC Ukrtransgaz (UTG) has addressed the European Bank for Reconstruction and Development (EBRD) and European Investment Bank (EIB) with a request to revise current modernization loan agreements for Ukraine’s section of the Urengoy-Pomary-Uzhgorod gas pipeline. UTG said in its press release that one of the reasons for which it is unable to implement the loan program was the operator’s failure to meet the financial stability requirements outlined in the loan agreements with the EBRD and EIB (due to tariffs for its services which have been set too low since the end of last year).
The company added that reliability and effectiveness of the Ukrainian section of the Urengoy-Pomary-Uzhgorod gas pipeline could be improved with a significantly smaller amount of assets (than it is envisaged in the loan agreements).
“For this reason the company is asking the EBRD to reduce the amount of its loan as long as a EUR 125 million investment (instead of EUR 300 million) is sufficient for the achievement of its primary goals,” reads the statement.
UTG also asked the financial institutions to hold consultations with the Ukrainian government in order to determine the extent of liability on the loan agreements for UTG and a new GTS operator as well as the mechanism for use of funds and loan servicing after the completion of the unbundling process in Ukraine.
As reported, UTG signed a EUR 300 million loan agreement with the EBRD and EIB (EUR 150 million from each) for the modernization of Ukraine’s section of the Urengoy-Pomary-Uzhgorod gas pipeline. Ukrtransgaz will also invest EUR 166 million of its own funds in the project.
Ukrtransgaz, a 100% subsidiary of Naftogaz Ukrainy, operates Ukraine’s system of trunk gas pipelines and 12 underground gas storage facilities.

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HENKEL TO INVEST IN MODERNIZATION OF DRY MORTAR MIXES PLANTS IN UKRAINE

Henkel Bautechnik (Ukraine) plans to invest around EUR 400,000 in the modernization of plants in Vyshgorod (Kyiv region) and Balakliya (Kharkiv region).
“The automatic line will be modernized at the plants in Vyshgorod and Balakliya from May of the current year, resulting in increased effectiveness and safety. The quality of product packaging will also improve. The amount of investment is about EUR 400,000,” Director General of Henkel Bautechnik (Ukraine) Olha Stupina told Interfax-Ukraine.
According to her, the company’s turnover in 2018 amounted to UAH 2 billion, forecasts for 2019 are positive, growth is expected. The company has significantly increased its financial performance compared to 2014, despite the loss of a quarter of the sales market.
“We estimate the results of last year as good. For the second time, Ukraine became the best company in the world in the Henkel adhesive division by consolidated financial indicators. I believe that in the conditions in which Ukraine is located relative to other countries of Europe and the world, this is a very big achievement,” Stupina said.
The total production capacity of the four factories of Henkel Bautechnik (Ukraine) is about 600,000 tonnes of products per year.
In the market of water-dispersion paints with a volume of about 150,000 tonnes, the share of Henkel Bautechnik (Ukraine) is about 17%, the press service of the company said.

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KYIV CITY TO RECEIVE $100 MLN FROM INTL DONORS FOR MODERNIZATION OF HEAT AND ENERGY COMPLEX

Kyiv Mayor Vitali Klitschko, municipal enterprise Kyivteploenergo and international partners – the U.S. Agency for International Development (USAID), the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC) – have signed a memorandum on the development of the heat and energy complex, under which Kyiv city will receive $100 million.
The press service of the Kyiv City Administration reported on Thursday that the document envisages international cooperation in modernization and development of the Kyiv’s heat and energy complex.
According to the report, under the memorandum, it is planned to build up an interim financial package of $100 million, which will finance the priority work on modernization.
“Kyiv lays the foundation for international cooperation in the modernization and development of the heat and power complex of the city. We are designing a plan to turn Kyivteploenergo into a European-level company that will provide high-quality services,” Klitschko said.
Klitschko said that the city is ready to overcome possible risks and barriers, given the imperfection of the current legislation and the difficult situation in the sphere of the country’s power system.
Foreign Service Officer at the USAID Farhad Ghaussy said that the United States actively supports the creation of an adequate level of Kyiv’s energy security.
He said that the USAID is actively cooperating with Kyiv city. It will be very difficult for the city to carry out modernization of the heat and power complex, but thanks to the assembled team it would be possible to transform it, he added.

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DCH COULD INVEST $3 BLN IN MODERNIZATION OF KHARKIV TRACTOR PLANT

The project of modernization of the Kharkiv Tractor Plant, investment in which could be around $2-3 billion, foresees the creation of a multifunctional ecosystem for business on its basis, which will include a potent industrial park, a complex with research, technological and technical base for implementation of innovative projects (a technological park) and other facilities, including logistic, training and research centers, the plant has reported on its website. “We are currently planning a big project for the reconstruction of the Kharkiv Tractor Plant. I think this is an investment of about $2-3 billion. We started yesterday and we will continue several years. It will be very interesting from the point of view of professional use. I always like projects that keep me on my toes,” the owner of the DCH group, which includes the Kharkiv Tractor Plant, Oleksandr Yaroslavsky said.
The project will, in particular, attract students and scientists from Kharkiv. Yaroslavsky said that the medium-term program for the development of the enterprise currently being implemented provides for an investment of DCH in the amount of about UAH 230 million. “We have focused mainly on the modernization of tractors. Almost more than 200 innovations in the model were made. The model has changed in quality both externally and internally, therefore the tractor has become more competitive,” Yaroslavsky said.
He said that about 800 new tractors would be off the line this year, approximately the same volumes are planned for next year: the plant does not work “for storing in a warehouse,” but manufactures products in accordance with the order portfolio. “We end this year and make the same plans, at least. Every year, every time, they create difficulties and problems for me with the Kharkiv Tractor Plant. Previously, it was running hurdles, now swimming in a pool without water. Tit is the more interesting, the more fun. I am responsible for the team. The team should be with a salary, and I will find options for a solution,” the businessman said.
Yaroslavsky recalled that the main market for the plant is Ukraine, and foreign markets are important to a lesser extent. “Taking into account that the markets have been lost, we have to restore. However, this process will take a certain amount of time. We are used to work. The company is interesting, the Kharkiv Tractor Plant is the leader of Ukrainian engineering and will not be left without attention,” Yaroslavsky said.
According to the information on the company’s website, earlier, Kharkiv Tractor Plant Director Andriy Koval reported that this year the plant increased sales of products in Ukraine by 40%.

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ARCELORMITTAL KRYVYI RIH WILL BE MODERN ENTERPRISE AFTER MODERNIZATION BY 2025 – CEO PARAMJIT KAHLON

PJSC ArcelorMittal Kryvyi Rih (Dnipropetrovsk region) after a radical modernization by 2025 will become a modern European enterprise, Director General Paramjit Kahlon told the employees of the plant on occasion of the 84th anniversary of its establishment. “I am sure that by 2025 we will have a modern European plant in accordance with all European standards, with minimal emissions of pollutants, with a very high level of productivity, with very low production costs and with the generations, who will then link their lives with metallurgy and this enterprise,” the top manager said.
At the same time, he stressed that the company is not standing still, is developing, and this gives hope for its future. “Once this modernization is completed, we will work in a new way,” the head of the enterprise is convinced, urging everyone to be participants in these changes and become architects of the success story that the administration is trying to create. According to Kahlon, ArcelorMittal Kryvyi Rih has three main goals: the first one is the modernization of the enterprise, still with an emphasis on ecology and environmental protection. The second one is the development of personnel and training new generations, the third one is partnership with the public.
The head of the company in December 2017 reported that ArcelorMittal Kryvyi Rih intended to invest $250 million annually in the renewal of production until 2025.

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