Office of the National Investment Council of Ukraine presents weekly reports as handy tools to keep track of the key news in business and investment climate in Ukraine and the world. The following report covers events dated June 10-June 17, 2019

1. WEEKLY REPORT
June 10th → June 16th, 2019

2. National joint-stock company Naftogaz of Ukraine has calculated the new price of
natural gas for the needs of households for June, setting it at UAH 5,553.89 per 1,000
cubic meters, what is 11.8% lower than price announced earlier. The company said
that the price was calculated in accordance with government resolution No. 485 dated
June 5, 2019, according to which Naftogaz takes the smallest of the four indicators
when determining the gas price for households
WEEKLY REPORT June 10th → June 16th, 2019
Business climate in Ukraine
GDP growth +3.3%
Export $15,151
Import $15,118
Industrial output 0.6%
CPI 9.0%
Oil
Coal
Natural
Gas
Iron Ore
Copper
Corn
Wheat
USD/bbl
USD/ton
USD/MWh
USD/ton USD/bushel
2018, y-o-y
Jan - Jan 2019
Jan-Jan 2019 y-o-y
Jan – Jan 2019
Jan-Jan 2019 y-o-y
Jan - Feb 2019, y-o-y
Feb 2019
Macroeconomic indicators
Jan - Mar 2019, y-o-y
Mar 2019
UAH/USD (NBU, average) 26.42
Source: Ukrstat, NBU
62.01
54.55
12.89
104.33
USD/ton
USD/bushel
5797.75
4.64
5.42
million
+8,2%
+10,1%
-7%
9,6%
million
Ukraine’s Ministry of Finance has announced the pricing of new eurobonds issued in
euros in the amount of EUR 1 billion with maturity on June 20, 2026, the demand stood
at EUR 6 billion. New issue is expected to be rated “B-” by Standard & Poor’s and “B-”
Fitch. The proceeds of the notes will be used for general budgetary purposes.
The European Bank for Reconstruction and Development (EBRD) has asked the
Ukrainian side to intensify preparation of the project to provide PJSC
Ukrgazvydobuvannia with a loan of EUR 52 million to buy equipment for well repairs, as
well as for energy efficiency projects
Ukraine is preparing for a possible launch of the new three-four-year program of
cooperation with the International Monetary Fund (IMF) at the end of 2019. Deputy
Head of the Presidential Administration Oleksiy Honcharuk said that there are good
starting conditions for the new program: during the past 14 quarters, the economy has
been growing steadily, although not rapidly, with acceptable inflation and reserves, as
well as an improvement in the Doing Business rating
The European Bank for Reconstruction and Development (EBRD) confirms its position
on the need to postpone the launch of the electricity market from June 1, 2019 for
three or six months to better prepare for it, considering the longer periods to be
excessive and bearing negative consequences

3. National Power Company Ukrenergo plans to reconstruct 18 automatic transformers at 12
substations this year. Updating the main equipment of the substations significantly increases
the reliability of the transmission system, and for some projects it can increase the overall
transformer capacity of the substations, directly influencing the operational safety of the power
grid and the possibility of regional development. European Bank for Reconstruction and
Development (EBRD) can provide Ukrenergo EUR 149 million for a project to upgrade
transmission networks
WEEKLY REPORT June 10th → June 16th, 2019
Ukrainian Business News World Business News
French energy giant Total SA is acquiring a 30% stake in Indian gas
distribution company Adani Gas for upwards of USD 800 million. The deal is
expected to trigger an open offer to public shareholders of Adani Gas, and
Total may end up having a roughly equal stake in the company
Boeing Co would buy aerospace interiors company EnCore Group, the
planemaker’s second foray into aircraft seats after it partnered with auto seats
maker Adient last year. The deal could help cut delays in the supply chain and
improve profit margins for the planemaker
Facebook is buying a stake in Indian e-commerce start-up Meesho, the head
of the U.S. tech giant’s Indian business, looking to deepen its reach in one of
the world’s biggest internet markets. The investment will help Meesho to
further its efforts to enable independent entrepreneurs to build businesses and
grow their customer base via social channels
Automakers Volkswagen and BMW are among the investors in Europe’s
biggest lithium-ion battery plant, Sweden’s Northvolt after it raised USD 1
billion in equity capital to complete funding for the facility. Construction of the
plant would begin in August, to provide an initial 16 GWh of cell manufacturing
capacity
South Korean battery maker LG Chem had signed an agreement to set up a
joint venture with China’s Geely Automobile to produce batteries for electric
vehicles. The JV would have annual production capacity of 10 GWh by the
end of 2021, and its products would be supplied to Geely’s electric vehicles
from 2022. The two parties would invest USD 94 million each in the venture
Hyundai Motor would invest in self-driving car software startup Aurora along
with Kia Motors to speed up development of autonomous vehicle
technologies. the companies have agreed to expand research to a wide range
of models and to build an optimal platform for Hyundai and Kia’s autonomous
vehicles. Hyundai and Kia’s investment is part of a series B financing round,
which has now raised more than USD 600 million
Kyiv City State Administration (KCSA) plans to build waste recycling plant with a capacity of
700 ths tons per day. KCSA is gradually planning to move from waste disposal to recycling
technology. In 2017, National Waste Management Strategy was adopted, and in 2019, the
National Plan. Now, KCSA is preparing its own regional waste management plant
The EBRD is contributing to sustainable forest management in Ukraine by supporting a major
domestic wood processing company Zunami with the introduction of new waste management
techniques aimed at reducing wood waste by 23 per cent or 3000 tons per year. The Bank is
providing a financial package of up to EUR 3 million to finance the investment
During 2018-2019, Ukraine has a steady trend towards the expansion of a network of airline
routes, in particular low-cost airlines. The share of low-cost airlines makes up to 27% of the
total number of air carriers that operate regular flights to / from Ukraine. In 2017 there were 21
foreign air carriers, including eight low-cost airlines, and in 2019 - 39, including 11 low-cost
carriers
Metinvest, a large Ukrainian group of metals and mining companies, signed a new long-term
contract with Air Liquide, the world leader in gases for industry, health and environment. Air
Liquide will supply oxygen, nitrogen and argon for Yenakiievo I&SW of Metinvest, Donetsk
Region. Total volume of Air Liquide investments in construction of the air separation unit will
comprise EUR 100 M, and financing will be provided jointly with EBRD (European Bank for
Reconstruction and Development)