1. UKRAINIAN INVESTMENT SUMMIT
INVESTMENT POTENTIAL OF LVIV REGION
EMERGING MARKET
AS ANSWER TO WORLD RECESSION
MYKOLA KMIT’
HEAD OF LVIV REGIONAL STATE ADMINISTRATION
March 10th 2009

2. WHY LVIV REGION?
COMPETITIVENESS OF THE REGION

3. A BRIDGE BETWEEN THE EU AND UKRAINE
• For the EU – access to significant
• Lviv region – transit
market:
border territory:
– 2.5 million consumers – Lviv
region – Key airport for all
– 12 million consumers – Western Western Ukraine
Ukraine
– International carriers:
– 47 million consumers – Ukraine
Wizz Air, LOT,
Austrian Airlines
– Lviv – 70 km to the
EU border
– 400 km to Warsaw
– 630 km to Budapest
• Extensive goods turnover with Europe: – 720 km to Vienna
– Export – 998,5 million US dollars (in – Border with Poland
2008) stretches for – 278
– Import – 2,6 billion US dollars (in km
2008) – 7 border crossings

4. LESS EFFECTED BY CRISIS
• European economy structure
– Small business
• 87% in real numbers, 75% in tax earnings
– Business growth
• 25,5% in 2008 (almost 15 thousand of new entrepreneurs)
• Less effected by economic crisis
– 2008:
• Industrial production – increase of 0,8% while the Ukrainian-wide decrease
is up to 3,1%
• Official unemployment level 2,7%, while Ukrainian-wide it is 3%
2,7%
– 2009 outlook:
• Decline in industrial production by 15%, but
15%
• Increase in gross agricultural production to 4,467 billion UAH (1,7%)
1,7%

5. COMPETITIVENESS
Lviv region is rated 4th competitive region among
other Ukrainian regions
– (Ukraine Competitiveness Report, World economic forum,
2008)
• Rationale:
– Intellectual potential and qualified workforce
• Rated 2nd by the quality of education in Ukraine
(Ukraine Competitiveness Report, World Economic
Forum, 2008)
• 25 universities and academies, 110 thousand
students: every 5th person in Lviv is a student
• Ivan Franko Lviv National University – one of
the oldest in Europe (est. 1661)
1661
– Innovations and IT
• 15% innovation-rich industrial enterprises
• Lviv is one of 30 most promising cities in the
world for IT development (KPMG research)
• More than 100 companies and 5 thousand
persons are involved in IT
• 1000 students graduate from National
University “Lvivska Politechnika” annually
– Competitive labour costs
• Average wages:
– Almost 30 times less than in France
– 6 times less than in Poland.

6. COMPETITIVE LABOUR COSTS
Average wages, Euro per hour

7. CENTRE FOR CULTURE AND RECREATION
Resort and recreation area attractive for investors
– Cultural monuments
• 50% UNESCO heritage of Ukraine
• 25% of all Ukrainian historic and architectural
monuments of ХІІ-ХХ centuries
• Lviv first mentioned in history in 1256
– Nature recreation
• Balneology: 7 of 8 world famous mineral waters
(Truskavets, Morshyn, Skhidnytsya)
• Carpathian mountains: a range of mountain resorts
– Tourist flow
• 2.5 million in 2008
• 40% more than in 2007
– 10% of potential used.

8. HIGH FINANCIAL STABILITY
• Lviv – the only regional centre of Ukraine,
which was rated uaA in 2009
– The highest rating of financial and loan
stability in Ukraine from Standard & Poor’s
– Reasonably high ability to completely fulfill
debt liabilities before other parties on time
– Independent evaluation of credit quality of
the city is based on the analysis and
calculations of financial plans and
evaluation of management strategy
• Approval of the second framework
agreement with EBRD for 50 million Euro
in 2009
– Capital repairs and reconstruction loan for
Lviv city streets
– Confirmation of financial stability of the
region.

9. INVESTMENTS INTO LVIV REGION:
REGION’S PROFILE
INVESTMENT CLIMATE
PROJECTS AND OPPORTUNITIES

10. INVESTMENT PROFILE OF THE REGION
FDI into Lviv Region in 2008
SECTOR SPLIT
industry
• Investment volume:
– 4th among Ukrainian regions agriculture
– 1st in Western Ukraine
finance
– 930,7 million USD of FDI
attracted into the region as of real estate
1.01.2009
– 1273 enterprises-recipients automotive trade
• Dynamics: construction
– 319,1 million USD in 2008
FDI into Lviv Region in 2008
– 350 million USD (outlook for COUNTRY SPLIT
2009)
Cyprus
• Structure:
– More than 50% - real sector Great Britain
– industry and agriculture per USA
26% each
Austria
Poland
Denmark
other

11. INVESTMENT CLIMATE
Maximum support in:
• Simplifying procedures for setting up of
business
– Simplification of a permit system
– Establishment of a “single permission window”
in all Lviv region district administrations
• Information support
– Regular meetings with entrepreneurs, investors
– Every investment project has a responsible
executive within Lviv Regional State
Administration (Head of the Department/Deputy
Head of the Department)
• Promotion:
– Lviv International Economic Forum
– Ukrainian Investment Summit.

12. KEY INVESTORS WORKING IN THE REGION

13. INFRASTRUCTURE PROJECTS:
INTERNATIONAL AIRPORT
• Construction timeframe:
– 2009-2010
• Cost:
– 100-150 million USD
• Funding:
– State budget of Ukraine
• Project:
– new passenger terminal:
• handling capacity –1000 passengers
per hour
• area 34 thousand sq.m
– ground infrastructure
– runway built according to the
requirements of ІCАО CAT II
• transnational planes allowed (critical
plane – Boeing 767-400)
• Development started in 2009.

14. INFRASTRUCTURE PROJECTS:
CONCESSION ROAD
Krakovets-Lviv road:
• part of the international
transport corridor #3
Berlin/Dresden-Wroclaw-
Lviv-Kyiv
• will connect “Krakovets”
Ukrainian-Polish border
crossing with existing
highway М-06 Kyiv-Lvov-
Chop
• Investment volume: 317 million USD
• Project: length 84,4 km, design speed – 150 km/hour
Project
– the challenge of connecting international transport corridor #3 will be solved,
including the high accident part of the road Krakovets-Yavoriv and near the city of
Lviv
• Construction started in 2009
– Preparatory operations have been carried out – first construction leg
(communications placed, archeological works and tree cuttings completed).

15. INFRASTRUCTURE PROJECTS: EUROGAUGE
1435 mm gauge railway connection
Polish border – Lviv
• Improving connection from Western – Lviv, 85 km
Przemysl
Europe to Lviv area along the III
pan-European Corridor
• Boost to international high-speed
railway connection across the EU
• Multiple stakeholders – the EU, state
& local authorities, transport
ministries and railway operators in
Ukraine and Poland
– Part of the State Programme of implementing high-speed railway passenger
traffic in Ukraine for 2005 – 2015
– Outlook for EURO-2012 and the 150th anniversary of the 1st railway connection
Vienna – Krakow – Lviv (1861-2011)
• Investment volume: 628 million USD
– Including the fleet of high-speed railway trains
• Implementation frame: 2-3 years
• Design speed – 300+km/hour
300+
• Revenue forecasts: during the 1st year of direct commercial exploitation of 4
trains (box-office returns only) – over 25 million USD.

16. INDUSTRIAL AND MINING PROJECTS
• Cement plant “Lafarge” of “Mykolaivtsement”
corporation
– “Dry” method of cement manufacturing
– Total investment – 326 million USD
– Land plot for this project sold at an auction on
December 30, 2008
– Growth of cement sales by 250 thousand tons
per year
– Decrease in harmful emissions into environment
• “Lyubelska” mine
– First private mine in the country with foreign
investment
– Implementation timeframe: 2009-2014
– Total investment – 1 billion USD, 25 million USD
– 2009, 20 thousand jobs
– Coking coal of one of the most valuable varieties
– Balance reserve – 86 million tons of coal will
partially cover the deficit of coking coal in Ukraine.

17. TOURISM & RECREATION PROJECTS
Hotel and resort with in-house therapeutic
pools in Truskavets
• Construction timeframe:
– 2007-2010
• Cost:
– 36 million USD
• Project:
– 5* hotel: 210 rooms, 9 floors
– Aquapark:
– 4 floors
– Water area – 5 554 sq.m
– Water surface area – 1 320 sq.m.

18. PRIORITIES FOR THE DEVELOPMENT AND
INVESTMENTS
• Region of sustainable economic and business development
• Lviv region: environmentally friendly manufacturing
• Lviv region: agricultural business
• Ukrainian Gateway to the European Union – EURO 2012
– Infrastructure, tourism and recreation:
– Border areas, Lviv: transport, housing and utility sector
– Lviv and Pre-Carpathian territory: network hotels with international brand
names
– Lviv: exhibition and conference halls
– Pre-Carpathian are and Carpathian mountains: hotels providing sport and
recreation services
• Region of well educated population, innovation potential and
technologically advanced companies
– Lviv: professional services, ІТ sector, energy-saving technologies and
innovations.

19. THANK YOU FOR ATTENTION
AND WELCOME TO LVIV REGION!
http://www.loda.gov.ua
mykola_kmit@loda.gov.ua