Digest of Economy & Markets, International Support, Politics & Culture
Markus CIUPEK
Dr.-Ing. | ?? ????Entrepreneur & Investor Empowering Manufacturing in Ukraine ???? | Co-Owner, Time & Space Ukraine | Mentor & Resilience Expert | Public Speaker | Author | Connecting ????????????Businesses
Welcome to our 10th issue of "Ukraine Through My Eyes." We are excited to celebrate this small milestone with you. We are very thankful for your interest in our newsletter. Thank you so much!
This week, we had a lot of special events related to Ukraine. The Ukraine Recovery Conference #URC2024, held in Berlin on June 11-12, 2024, brought together over 3,000 representatives from more than 60 countries, including government officials, international organizations, business leaders, and civil society representatives. Additionally, the #G7Summit also focused on Ukraine. We have in this issue summarized the most important outcomes for you.
In our "Topic of the Week" section, we want to highlight the humanitarian demining efforts in Ukraine. In May 2024, Ukrainian mine action operators surveyed nearly 31,000 hectares of agricultural land, with over 146,000 hectares returned to economic exploitation this year. Tetiana Babych, PhD has highlighted the key points.
Moreover, in this current issue, we have gathered various topics that we believe will interest our audience, such as:
Economy and Markets
International Support
Political Updates
Culture
We hope you find this issue both engaging and insightful.
Your feedback is crucial to us! Wishing everyone a safe and peaceful start to the new week!
Glory to Ukraine—Stronger Together—To Victory!
Слава Укра?н? - Разом сильн?ш? - до перемоги!
Sincerely yours, Markus Ciupek
The Ukraine Recovery Conference (URC2024), held in Berlin on June 11-12, 2024, brought together over 2,000 representatives from more than 60 countries, including government officials, international organizations, business leaders, and civil society representatives. This diverse group convened to support Ukraine’s reconstruction and development, resulting in significant achievements such as the signing of over 100 agreements and commitments totalling €16 billion. The conference highlighted extensive collaboration on projects across various sectors and underscored the global commitment to Ukraine's resilience and future prosperity
The URC2024 in Berlin resulted in several significant achievements that are pivotal to Ukraine's reconstruction and future development:
Overall, URC2024 solidified strong international support across multiple sectors, demonstrating a unified commitment to Ukraine's resilience and recovery amidst ongoing challenges.
Humanitarian demining of Ukraine
In May 2024, Ukrainian mine action operators surveyed nearly 31,000 hectares of agricultural land, with over 146,000 hectares returned to economic exploitation throughout the year. The joint efforts of Ukraine and its international partners to strengthen the capabilities of operators have yielded results, with land surveying and clearing accelerating compared to the previous year. The Kherson regional military administration demonstrated effective coordination of all operators working in the region, allowing for the return of land twice the area of the city itself.
The priority return of land to economic exploitation will take place in eight regions: Donetsk (12.8 thousand ha), Chernihiv (2 thousand ha), Sumy (85 ha), Dnipropetrovsk (6.6 thousand ha), Kyiv (9.4 thousand ha), Mykolaiv (44 thousand ha), Kharkiv (190 thousand ha), and Kherson (248 thousand ha). Ukraine aims to return 80% of land potentially contaminated by explosive objects and mines to agricultural use within 10 years. If the problem of landmines is not effectively solved, the number of victims from landmines may reach 9,000 by 2030.
To speed up demining, Ukraine intends to use all tools at its disposal:
A $50 billion loan for Ukraine at the expense of Russian-frozen assets
The G7 has agreed to provide Ukraine with a $50 billion loan for budgetary, military, reconstruction, and humanitarian purposes, backed by future revenues from frozen Russian assets. Russia's assets will remain blocked until Moscow ends its war against Ukraine and compensates for the damage caused. The deal involves creating a "credit syndicate" with multiple lenders to share risks, but the exact shares of the $50 billion for each country have not been agreed upon.
Western officials believe that the agreement to provide additional support to Ukraine using frozen assets demonstrates unity in defense of Kyiv and broader foreign policy priorities amidst the European Parliament elections and the US presidential race.
Source: Ursula von der Leyen Twitter, 13/06/2024
Security agreement between Ukraine and Japan
Japanese Prime Minister Fumio Kishida has signed a security agreement with Ukraine, providing $4.5 billion in support for a 10-year term. The agreement includes assistance in intelligence and cyber security, treatment of wounded soldiers, industrial base development, support for Ukraine's peace formula, transfer of non-lethal equipment, and aid in IT and demining. This is the first such agreement with a Pacific region country, making Japan a strong ally in Asia.
Source: Zelenskiy Facebook, 13/06/2024
Russia Must Compensate Ukraine for $486 Billion in Damages - G7 Declaration
The G7 countries have declared that Russia must pay for the damage caused to Ukraine through its illegal war of aggression, which has cost the country over $486 billion, according to the World Bank. The declaration states that Russia's obligations under international law to compensate Ukraine for damages are clear, and the G7 leaders are considering all possible legal avenues to force Russia to comply.
The G7 leaders also promise to continue pressure on Russia's profits from the trade in raw materials and energy carriers. Additionally, they pledge to provide ongoing military, financial, and humanitarian aid to Ukraine. Their ultimate goal is to achieve a just, strong, and comprehensive peace in accordance with international law, the UN Charter, and its principles, with respect for Ukraine's sovereignty and territorial integrity.
Source: ANSAit, 14/06/2024
Security Agreement for 10 Years Between the USA and Ukraine
The United States has signed a 10-year treaty with Ukraine, marking the 17th country to sign such an agreement with Ukraine. The treaty aims to strengthen Ukraine's defense capabilities through ongoing military assistance, modernization of the Armed Forces, and increased interoperability with Alliance allies. The US emphasizes its long-term commitment to Ukraine's security, sovereignty, and territorial integrity, providing constant support for deterring and responding to potential aggressions, primarily from Russia.
The agreement also promises significant economic and humanitarian aid for the recovery and reconstruction of Ukraine, as well as support for promoting investments in Ukraine and the restoration of the energy sector. The US expects reforms from the Ukrainian government, including judicial reform, development of anti-corruption institutions, adoption of NATO standards, and assistance with the modernization of the Air Force of the Armed Forces of Ukraine.
Western and Ukrainian media have speculated that the next US president could terminate the agreement with Ukraine, hinting at the possible election victory of Donald Trump.
Source: WhiteHouse.gov, 13/06/2024
German Company to Build Wind Power Plant in Odesa Region
The German company Notus Energy is constructing a 300 MW wind power station in the Odesa area. The first stage of the wind farm, with a capacity of 120 MW, is set to begin construction.
Notus Energy affirms that development on the project will continue despite the full-scale invasion. Currently, all required permissions, including a land permit, have been received, and project finance has been secured through banking agreements.
The first phase of the wind farm is unlikely to begin operations this winter, but the company is working hard to have the project operational as soon as possible. There are certain issues with equipment logistics that Notus Energy is currently addressing.
Source: Notus Energy Facebook, 11/06/2024
"e-Entrepreneur" Service Launched on the Diia Portal
The Diia portal has launched an "e-Entrepreneur" service, simplifying business registration for adult citizens of Ukraine. The service allows users to apply for 10 services online in 15-40 minutes, including:
The questionnaire provides detailed information on the services, and the application is automatically sent to state authorities after business registration. The service is designed to help individuals register, change, or expand their businesses.
Source: KMU.gov, 12/06/2024
EBRD to Finance OKKO Bioethanol Plant
The European Bank for Reconstruction and Development (EBRD) has provided a €60 million loan to Ukrainian private company "Lan-Oil" for the construction of a bioethanol production plant. The loan is accompanied by a financial guarantee from the European Union, as part of the Ukraine Investment Framework program, which totals €150 million.
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This is the bank's first investment in private biofuel production during the war in Ukraine. The project is being implemented by Galnaftogaz and the OKKO group of companies, the leading distributor of automotive fuel in Ukraine. The bioethanol produced will meet the EU Renewable Energy Directive (RED III) requirements.
Source: European Bank for Reconstruction and Development, 12/06/2024
Fincompany NovaPay Starts Crediting Businesses
NovaPay has introduced a new business credit product aimed at supporting and developing Ukrainian individual entrepreneurs who are residents of Ukraine and clients of Nova Poshta and NovaPay. The program offers two types of loans: short-term (up to 3 months) and long-term (up to 2 years). The basic interest rate is 30% per annum, with repayment at the end of the loan period or through annuity payments.
To apply for a loan, entrepreneurs must:
To issue a loan, entrepreneurs must prepare the necessary documents, obtain approval for the loan amount and type, and sign a credit agreement.
Source: NovaPay Facebook, 13/06/2024
"Rivneazot" Launches Modernized Workshops for Mineral Fertilizer Production Amid Growing Demand
Group DF has restarted key workshops for mineral fertilizer production at Rivneazot, including those for ammonium nitrate, ammonia (A-2), and unconcentrated nitric acid. The company experienced an unusual increase in demand for nitrogen fertilizers in May and June due to rising grain prices, additional resources for fertilizer purchases, decreased prices for basic fertilizers, disruptions in importer logistics chains, and the situation in the Ukrainian electricity industry.
Rivneazot, part of Group DF's nitrogen business, has repaired the ammonia line, which now produces 650 tons of ammonia daily and 1,000 tons of unconcentrated nitric acid daily. The ammonium nitrate workshop will operate at the maximum capacity of the ammonia line, ensuring at least 40,000 tons of nitrate per month. Products are already being shipped to customers across Ukraine, and all contracts are expected to be completed on time. The OSTCHEM investment program, which began two years ago, has also contributed to the company's success.
Source: Group DF Facebook, 14/06/2024
The EU Wants to Continue Gas Transit Through Ukraine
The European Union is negotiating with Ukraine to preserve gas transit through Ukraine while replacing Russian gas with Azerbaijani gas. The EU proposes that European companies buy and pump gas from Azerbaijan into a pipeline in Russia and deliver it to Europe through Ukraine. This would allow the EU to completely abandon Russian gas and reduce the Kremlin's revenues from gas sales.
This idea is gaining momentum, as Ukraine supports this plan due to the significant transit revenues, which amounted to about $1 billion in 2021. However, there are concerns that decommissioned pipelines could become military targets or fall into disrepair, which would be expensive to restore.
Currently, Russia supplies about 15 billion cubic meters of gas to Europe annually, mostly to Slovakia and Austria. The existing transit contract between Gazprom and Naftogaz of Ukraine, concluded at the end of 2019, is set to expire at the end of 2024. Ukraine has announced that it will not extend the contract for the transportation of Russian natural gas to Europe beyond 2024.
The transit of Russian natural gas through Ukraine's gas transport system (GTS) decreased by 28.4% in 2023 compared to 2022, to 14.65 billion cubic meters.
Source: Bloomberg, 11/06/2024
EBRD Allocates €20 Million Loan to Ukrainian Bank "Lviv"
The European Bank for Reconstruction and Development (EBRD) has provided a €20 million loan to Ukrainian bank Lviv to support private small and medium-sized enterprises affected by the war in Ukraine. The loan, designed for three years, will help Lviv Bank provide a stable and diversified funding base for Ukrainian businesses.
The cost of the loan is partially covered by an interest rate subsidy provided as part of the US's local currency SME lending support program in Ukraine. The EBRD's "Transition to a Green Economy" approach requires at least 30% of all sub-loans financed from the new loan to support "green" projects.
The signing of the loan at the Berlin Conference on the Reconstruction of Ukraine confirms the spirit of unity in international efforts to strengthen the Ukrainian economy. Lviv Bank, owned by European shareholders, is one of the most dynamically growing banks in western Ukraine, with 19 branches and a main office in Lviv. The bank's loan portfolio increased from €38 million in 2017 to €167 million in the first quarter of 2024.
Source: The European Bank for Reconstruction and Development, 12/06/2024
The German Government Announces New Military Aid Package for Ukraine
The German government has announced the allocation of a new package of military aid to Ukraine. The package includes a variety of weapons and equipment, such as tanks, armored vehicles, air defense systems, artillery, engineering and auxiliary equipment, and ammunition.
Specifically, the package comprises:
Source: Delo.ua, 14/06/2024
Zelenskiy Visits Saudi Arabia
Ukraine's President Volodymyr Zelenskiy visited Saudi Arabia on June 12, where he met with state officials and Crown Prince Mohammed bin Salman al Saud. The visit focused on bilateral relations, the implementation of previous agreements, and cooperation between the countries. Zelenskiy also discussed preparations for the first "Global Peace Summit" and its expected results and implementation.
Both sides exchanged views on the international situation and prospects for its development. Ukraine expressed gratitude to Saudi Arabia for its support and the Crown Prince's desire to help in the faster restoration of peace. Saudi Arabia has not yet confirmed whether it will attend the "Global Peace Summit" in Switzerland.
Zelenskiy last visited Saudi Arabia in February to promote his peace plan and discuss a potential prisoner-of-war exchange.
Source: Zelenskiy Facebook, 12/06/2024
Mustafa Nayem Resigns as Head of the Agency for Reconstruction
Mustafa Nayem, the head of the State Agency for the Reconstruction and Development of the Infrastructure of Ukraine, has submitted his resignation "due to systemic obstacles that do not allow him to effectively carry out his duties."
Nayem noted that he will continue to perform his duties until the government makes a decision on his dismissal and will hand over his responsibilities to his successors.
Since August 2021, Nayem worked in the team of the previously dismissed Deputy Prime Minister - Minister of Reconstruction, Oleksandr Kubrakov.
In January 2023, the Cabinet of Ministers created a new structure based on the State Agency for Infrastructure Projects and the State Agency for Motor Roads, forming the State Agency for Reconstruction and Development of Infrastructure of Ukraine. At the end of January last year, Nayem was appointed head of the newly created Recovery Agency.
Source: Mustafa Nayem Facebook, 10/06/2024
NATO Approves Plan to Expand Support to Ukraine but Without €40 Billion in Annual Funding
NATO defense ministers have approved an operational plan to expand support to Ukraine, but the military bloc did not approve the financing plan, which requires maintaining annual aid allocation at €40 billion.
The plan aims to increase NATO's role in supplying weapons and training the Ukrainian military. NATO will take over the international coordination of arms supplies and training for the Armed Forces of Ukraine in the future. The headquarters for aid coordination will be located in Wiesbaden, Germany, where a US military base is already in operation. Logistics hubs will be created in the eastern part of the Alliance.
NATO will supervise the training of the Ukrainian military, support Ukraine through aid planning and coordination, manage the transfer and repair of equipment, and provide support for the long-term development of the Armed Forces of Ukraine.
NATO will continue negotiations on a position to maintain annual aid allocation at €40 billion until the summit in Washington.
Source: European Pravda, 14/06/2024
Presentation of the "Veterans' Theater" Project to Take Place in Kyiv
The "Veterans' Theater" is a project aimed at assisting Ukrainian soldiers in their creative and emotional recovery. Run by TRO Media and the Kyiv Playwrights Theater, the project will involve veterans studying drama, acting, and writing their first plays. The goal is to create a full-fledged artistic product that presents the stories of Ukrainian soldiers on international art stages, allowing the global community to see the events of the Russian-Ukrainian war through the eyes of Ukrainian citizen-defenders.
Additionally, the project aims to demonstrate to Ukrainian society that individuals with traumatic combat experiences can be a powerful source of creativity and energy for development and change. The first presentation of the Veterans' Theater will take place on June 18, at 11:00 a.m., at the Playwrights Theater. The project seeks to create multi-faceted connections and reduce tension in society.
Source: Theater of Playwrights, 14/06/2024
Exhibition on the Architecture of Kyiv Takes Place in the Capital
The "Eternal City" project, launched in the "Art without Borders" art space of the Lavra gallery, showcases the unique and magical beauty of the Ukrainian capital, Kyiv. The project highlights the city's centuries-old grandeur and coziness, which Balzac called the "second Rome." The city's divine and mystical elements are harmoniously combined, featuring famous landmarks like the Cathedral Bells, Lysa Gora, House of Chimeras, and Richard's Haunted Castle.
The exhibition features graphic works by architect and artist Yevhen Kamshiy, depicting famous Kyiv landmarks such as the House with Chimeras, Richard's Castle, Kyiv Passage, Khreschatyk, and St. Nicholas Church. These works capture the unique atmosphere of old Kyiv. Kamshiy believes that architecture shapes the space and influences the spirituality, outlook, and level of development of the people living in it.
Source: VechirniyKyiv, 14/06/2024
Management of investment projects in Ukraine. ? Attracting foreign investors to finance key initiatives. ? Developing strategies for entering new markets. ? International trade.
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