Ukraine: comfort for investors

1. UKRAINIAN
INFRASTRUCTURE:
OPEN FOR
INVESTORS
MINISTRY OF INFRASTRUCTURE OF UKRAINE
October 2016

2. U k r a i n e
Kyiv
ATTRACTIVE GEOGRAFICAL LOCATION:
UKRAINE CONNECTS EUROPE AND ASIA
5Pan European transport corridors
18 EU routes
Geographical center of Europe
Ideal trade hub between EU, Middle East and Asia
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3. UKRAINE:COMFORT FOR INVESTORS
SIMPLIFIED
COMPANY
REGISTRATION
PROCESS
BAN ON
REPATRIATION
OF DIVIDENDS
LIFTED
VAT
REIMBURASMENT
PROBLEM
SOLVED
EFFICIENT &
CHEAP
LABOR
FORCE
BEST TIME
TO ENTER THE
MARKET
POLITICAL
WILL AT ALL
LEVELS
INVESTMENT
PROMOTION
OFFICE IS IN
PLACE

4. INFRASTRACTURE: KEY PRIORITIES
4
CAPEX in Ukrainian POST
PPP/ Concession of SEAPORTS
Private Operators on RIVERS PORTS
PRIVATIZATION of SOEs
RAILWAYS Private Operators
CAPEX in MOTORWAYS
PPP/ Concession of AIRPORTS
New Law on Privatization
is in process
Law on Railways
New Law on Concession is
to be voted in 2017
PPP Project Office is
established
Law on Inland Waterways
is in process
REFORMS TARGETS LEGISLATION
State road fund is
established

5. 5
5 out of 10 European transport corridors
run through Ukrainian territory
Ukraine has the most extensive railroad
networks in Europe handling a substantial part of
passenger and freight traffic
Ukraine’s road network is no less extensive, it covers the
country’s entire territory and makes possible
deliveries to any point of destination
The upcoming reconstruction of river waterways
will help river transport become a worthy alternative to its rail and road
counterparts
50%
28%
13%
8%
Railway Roads Water Avia other
INFRASTRUCTURE: HUGE GROWTH POTENTIAL
Ukraine cargo transportation structure,
2015

6. 6
42%
33%
11%
6%
Russia Ukraine Romania Bulgaria Georgia Turkey
452
mln. tons
13 seaports*
Ukraine position in worldwide trade volumes:
# 1Sunflower oil
# 3Grains following whole EU and USA
# 4Iron ore following Australia, Brazil and South Africa
Ukraine handles every 3rd ton of
cargo in the Black Sea region, 2015
UKRAINIAN SEAPORTS – KEY IN THE BLACK SEA REGION
29.6
18.6
16.0
11.6
5.8
4.3 4.1 2.9 2.7
1.1
Cargo turnover by sea ports, Mt
9m2016
Total 96.7 Mt
* Not included Crimea
Chornomorsk
Olvia
(ex Oktyabrsk)

7. 28%
27%
13%
32%
Grains, Iron ore, Black iron - 68%
of ports turnover in 9m 2016
Grain
Iron ore
Black iron
other
⇒Government initiates new
concession legislation
⇒Big4 audit of all state stevedores
⇒Further deregulation: in 2015
vessels waiting time decreased by
14x times. Current vessel
clearance procedure is15 minutes
Investments in Ukraine
OPPORTUNITIES IN SEAPORTS
97
mln tons
Grain becomesmain product for seaports in
2016:
• 27.4 mln tons for 9m2016
• +6% vs 2015 and +20% vs 2014
Huge potential for grain logistics growth
• 90% of grain export is transported
through seaports
• Up to 50% of grains cargo supplied by
multinational companies
ALREADY 2017E
7

8. Key points:
5,5 km quay line
Up to 19.0 m max draft
Ore, coal, grain, chemicals – core products
Vessel types: Capesize, Panamax
9m 2016 results:
29.61 mln tons turnover
61`580 TEU
53%
18%
9%
7%
9% Ore
Grain
Coal
Chemicals
Other
Fertilizers
Yuzhnyy harbour turnover, 9m 2016
YUZHNYI HARBOUR - #3 IN THE BLACK SEA REGION
29.6
mln tons
Yuzhnyy seaport view 8

9. STATE STEVEDORING COMPANY “YUZHNYI CSP”
9
1,000 ths tons storage capacity
40k t / day loading intensity
7 berths14.3-19.0 m draft
41 cranes 7 port fleet
650 railcars/ day loading intensity
16.8 mln tons cargo in 2015
Balk cargo, steel
Largest iron ore and coal terminal Maximum draft in Ukraine&
31% of cargo in Yuzhnyi Harbour

10. Chornomorsk seaport view
Key points:
6 km quay line
Up to 13.5m max draft
Grain, ores, containers– core products
Vessel types: Panamax
9m 2016 statistics:
11.61 mln tons turnover
18`160 TEU
47%
19%
16%
8%
7%
Grain
Ore
Containers
Seeds oil
Other
Constructions materials
Chernomorsk harbour turnover, 9m 2016
CHERNOMORSK HARBOUR
11.6
mln tons
10

11. Chornomorsk seaport view
STATE STEVEDORING COMPANY “CHORNOMORSK”
11
30.3 mln tons annual capacity
13 tags 63 handling equipment
11-13.5 m draft
11.9 mln tons cargo in 2015
grain, iron ore, autos
254k auto vehicles
incl. 1`150kTEU

12. Yuzhniy
Odesa
Illichivs
k
Olvia
Kherson
Mariupol
Berdyansk
Kerch
Feodosiya
Yalta
Yevpatori
a
SEAPORT CONCESSION: PILOT PROJECTS
agricultural Southern region location
OLVIA SEAPORT (EX-OKTIABYRSK)
Azov Sea
Black Sea
178.8 ha area
vessels < 230 m long, < 80k tons DW
1.53 km length 10.3 m depth
capacity is 2.57 mln tons per year
318k sq. m storage
located between river Dnipro and sea
16 ha area
vessels < 200 m long, < 15k tons DW
1.26 km length 7.6 m depth
capacity is 3.25 mln tons per year
sand pit facilities
KHERSON SEAPORT
12

13. 13
PRIVATIZATION OF UKRAINIAN DANUBE SHIPPING
COMPANY
TOP national transportation operator on the Danube
2.7m tons of cargo per year
Revenue $55m
EBITDA $2m
20% of all Danube shipping
469 units of fleet
Danube basin
Romania
Moldova
Bulgaria
Serbia
Croatia
Hungary
Slovakia
Austria
Germany
Ukraine
13

14. 3
KEY PROJECTS ON ROADS RECONSTRUCTION
SEE MAP
Lviv – Krakovets (85 km, 1 cat),
Odesa – Mykolaiv – Kherson (190 km, 1 cat),
Dubno – Ternopil – Ivano-Frankivsk (220 km, cat 1),
Rivne – Lutsk (65 km, cat 1),
Poltava – Kharkiv (140 km, 1 cat),
Zhytomyr – Vinnytsya (120 km, cat 1),
Odesa – Palanki – Monashi (84 km, cat 2),
Terebovlya – Chernivtsi (138 km, 2 cat).
$4,5bn required level of investments
ROADS: KEY INVESTMENT PROJECTS
EXPECTED RESULTS
• Realization will boost the economy of Ukraine
• Improve quality of roads according to the
international standards
• Provide safer road infrastructure. Decrease ‘death
on roads ratio’
4 years timeline
925 kmroads length

15. 5
+ 15% of annual traffic growth stimulates
provides the need for construction of new
roads and bridges
• Length: overall – 214.6 km, new direction – 148.4
km, existing road – 66.2 km
• Category: 1A
• Lane: 4
• Width: 3.75 m
• Bridges across the Dnipro river:
• North crossing 8200 m
• South crossing 4823 m
• Bridge across the Desna river - 1505 m
• Overpass: 7 pcs., 8910 m
• Pipelines: 78 pcs.
• Interchange of two levels: 35 pcs.
• Land allocation: 1415 ha
• Landwork volume: 21 840 thousand m3
• Pavement area: 3.6 million m2
THE PROJECT WILL:
• unload city of Kyiv from freight transit transport
• develop infrastructure of Kyiv region
• improve roads safety
4 years timeline
151.6 km roads length
CONSTRUCTION OF KYIV RING ROAD
3 large bridges
72 small bridges

16. 16
RAILWAY INFRASTRUCTURE: NEEDS FOR INVESTMENTS
 Corporatization is done: Supervisory Board
and new professional management
team since mid 2016
 Serious shortage of hoppers - railway reform
is to open market for private
operators
 International partners are needed: GE,
Bombardier and others, to facilitate
JV’s with Ukrainian producers
Requirements for renewal of hoppers in Ukraine,
units
6367
7300
8226
9150
10095
11000
0
2000
4000
6000
8000
10000
12000
2015 2016 2017 2018 2019 2020 16
Reform targets in 2016-2017
350 m
tones of
cargo per
year
UKRZALIZNYTSYA TODAY
22 000 km
of railway
network
4 000
locomotives
and 123 000
hoppers
Largest
employer
in Ukraine
Requirements for renewal of hoppers in Ukraine, units

17. 17
Key points:
19 airports: 2 SOEs, 2 PPP, 15 municipal
10.7 mln passengers
120.7k aircrafts served
Boryspil makes 60% of passengers flow
Open Sky implemented for Odessa and Lviv
Key functioning airports locations
AIRPORTS DEVELOPMENT
Strategy highlights:
Governmental program of airports development
till 2023 approved in 2016 with targets:
• to create single state company to manage
airports infrastructure
• to reach 2x times passengers flow
increase till 2023
Ongoing reforms:
Harmonization of legislation and technical
regulations with the EU
Open Sky agreement with the EU is negotiated
Realization of 2023 airports development
program

18. 18 18
BORYSPIL: OPEN FOR INVESTORS
Cargo terminal8 mln
passengers
per year
33 airlines
76 regular
flights
2 runways
and new
terminal
Revenue
$100 m
2016E
Area 14 580 m2 Warehouses 5 072 m2
Capacity 2 686 pallets, 805 tons per day
KEY FACTORS INVESTMENT PROJECT

19. 19
LVIV AIRPORT: OPEN FOR INVESTORS
556k passengers in 9m2016
32 regular flights
new terminal
KEY FACTORS
2`000 PAX/hour capacity
+25% in 9m2016 vs 9m2015
KEY FIGURES
6`571 flights in 9m2016
FACILITIES
up to - 80% discount
for new regular flights
47`233 m2 terminal area
3`305 m runway
9 departure gates
1`125 parking places

20. 20
• 11500 branches with 1.3
mln sq m of real estate
• 3rd largest employer in
the country
• 28 mln clients out of 44
million population
• # 1 company in parcels and
letters
• $ 1B of communal payments
• $ 4B of retirement
payments
• Over +20% growth in parcels
from China
• +30% annual growth of
e-commerce market
• Exclusive opportunity to reach
over 50% of population
with financial services
Looking for strategic
partners and investors
to become the core of
the new Ukrainian
economy and transit
hub for Asian trade
flows
NATIONAL POSTAL OPERATOR UKRPOSHTA – GROWTH
STORY FOR PARTNERS AND INVESTORS
• Only 21% of branches are
computerized
• Average age of truck fleet
over 10 years
• Over 30 large manual
sorting centers country
• $ 12-15M in
computerization of the
network
• $ 70-100M in new car
and truck fleet
• $ 2-5M in transport
management systems
• $ 120-150M in 5 new
sorting centers around the
country
UKRPOSHTA TODAY …FACES CHALLENGES …REQUIRES INVESTMENTS
…PRESENTS GROWTH
OPPORTUNITY

21. THANK YOU FOR
ATTENTION!
Detailed information is available on
our investment data:
www.mtu.gov.ua/inv
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