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 March 18-24, 2019

1. WEEKLY REPORT
March 18th → March 24th, 2019

2. In March, Naftogaz Ukrainy bought natural gas from the European Union at USD 226/1,000 m³,
which is 6-13% cheaper than the price that could be offered by Gazprom under a contract with
Ukraine. Under the current contract amended in the tribunal, Gazprom has to sell gas to
Ukraine at a price 48% cheaper than the price that would have been obtained in March using
the formula in the original contract. At the same time, the Russian company refuses to comply
with the arbitration award
Ukrzaliznytsia (Ukrainian Railways) has completed the first phase of strategic cooperation with
General Electric (GE) under the $1 billion 15-year framework agreement which was signed in
winter 2018. The last 5 out of 30 diesel locomotives made by GE have been sent to the UZ
depot from the Kryukovsky Railway Car Building Works (KRCBW)
Ukraine’s GDP in 2018 grew by 3.3% after growing by 2.5% in 2017 and by 2.4% in 2016.
Nominal GDP amounted to UAH 3.559 trillion, UAH 84,190 per capita. The national budgets for
2018 and 2019 have been developed based on the forecast of economic growth in these years
by 3% annually
The Government of Ukraine expects Naftogaz Ukrainy to increase natural gas production in
2019 by 10.3% (1.7 billion m³) compared to 2018, to 18.2 billion m³. Cabinet of Ministers also
instructed the company's management to finish the unbundling process by January 1, 2020, by
creating the necessary legal and technical prerequisites
Capital investments in the agro-industrial complex in 2018 amounted to 90 billion UAH, of
which 25 billion UAH was made in food processing. According to the Prime Minister, the share
of agro-industrial complex in Ukraine’s GDP is 17%, of which only 4% goes for food
processing. The Government now aims at changing this structure: at least a quarter of GDP
should come from the agro-industrial complex, while the share of food processing segment
should be increased
WEEKLY REPORT March 18th → March 24th
Business climate in Ukraine
GDP growth +3.3%
Export $59,195
Import $62,947
Industrial output 1.1%
CPI 10.9%
Oil
Coal
Natural
Gas
Iron Ore
Copper
Corn
Wheat
USD/bbl
USD/ton
USD/MWh
USD/ton USD/bushel
2018, y-o-y
Jan - Nov 2018
Jan-Nov 2018 y-o-y +10.2%
Jan - Nov 2018
Jan-Nov 2018 y-o-y +14.5%
Jan - Dec 2018, y-o-y
Dec 2018 -3.5%
Macroeconomic indicators
Jan - Dec 2018, y-o-y
Dec 2018 9.8%
UAH/USD (NBU, average) 27.2
Source: Ukrstat, NBU
67.03
65.05
17.46
85.89
USD/ton
USD/bushel
6314.5
3.78
4.66
million
million

3. The ICU Group seeks to launch the largest unsorted solid household waste treatment plant in
Ukraine in Zhytomyr using the MBT technology (mechanical, biological and thermal treatment
of solid municipal waste). The company plans to invest up to EUR 10 million in construction.
After the successful implementation of this project, ICU will consider the possibility of building
plants of the kind in other cities of Ukraine
VR Capital Group (USA) identifies investment opportunities in Ukraine's wind power sector,
mulling several projects. The company has already implemented three solar power plant
projects in partnership with Ukrainian ICU group, with total capacity of 225 MW, and the total
investment reaching USD 180 million
The European light launch vehicle (LV) Vega with a Ukrainian engine has successfully
deployed an Italian remote sensing satellite PRISMA into orbit. The propulsion engine for the
4th stage was developed by the Yuzhne Design Bureau and manufactured by Yuzhmash. In
July 2017, Ukrainian participants in the Vega program extended the contract signed in 2012
with Italian Avio for the supply of propulsion engines for the Vega rocket until 2020
EBRD will provide Kyiv with a $320 million loan for transport infrastructure making the city the
second participant of the Green cities program in Ukraine. The funds will allow the city
administration to extensively renew the public transport fleet and conduct major repairs of the
metro bridge
US mobility start-up Uber has launched an eco-friendly service UberGreen in Kyiv. A fleet of
more than 200 electric cars is expected to transfer about 10,000 people using the service by
the end of April. Uber has expanded rapidly in Ukraine since entering the market in 2016,
opening a regional head office in Kyiv the following year and launching the Uber Eats food
delivery service early in 2019
The world’s largest sports goods retailer Decathlon officially opened its first store in Kyiv.
During two past years Decathlon's geography grew from 20 to 56 countries, including
Ukraine, Japan, Greece, Croatia and others. The retailer with a turnover of $ 11 billion a year
is now selling competitively priced goods for 70 kinds of sports
WEEKLY REPORT March 18th → March 24th
Ukrainian Business News
A private equity consortium led by Apax Partners agreed to buy
Inmarsat Plc for about USD 3.4 billion in cash. A takeover of the
company could be closely scrutinized by the British authorities because
of Inmarsat’s position as a strategic asset
Boeing Co has created a new venture with Brazilian planemaker
Embraer, valued USD 4.2 billion. Control of this division will be
transferred to Boeing as part of the transaction. The new venture will be
80% owned by Boeing and 20% by Embraer
Real estate services provider Jones Lang LaSalle will buy capital
markets services provider HFF in a cash-and-stock deal valued at about
USD 2 billion. The combined company is expected to deliver savings of
USD 60 million over two to three years after the deal closes
A consortium of investors including Poland’s sovereign wealth fund PFR
has agreed to buy the country’s largest container terminal in Gdansk
from the infrastructure fund of Australia’s Macquarie in a deal worth
more than USD 1.3 billion. IFM and PFR will each hold 30%, while PSA
will hold 40%
Lyft kicked off the investor road show for its IPO, targeting a valuation
of up to USD 23 billion and seeking to woo money managers before
larger ride-hailing rival Uber Technologies goes public. Lyft is on track
to be the 10th internet IPO of all time in the United States
Levi Strauss fetched a higher price than expected in its initial public
offering (IPO), selling USD 623.3 million in shares as the U.S. jeans
maker looks to return to the stock market after 34 years as a family-
owned company
World Business News