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 July 15-21, 2019

1. WEEKLY REPORT
July 15th → July 21st, 2019

2. President of Ukraine Volodymyr Zelenskyy met with representatives of business and financial
circles of the People’s Republic of China, who are ready to invest USD 10 billion in projects in
Ukraine. President suggested to invest in infrastructure development, including concession
construction of the road around Kyiv, agriculture, and development of gas fields
WEEKLY REPORT July 15th → July 21st, 2019
Business climate in Ukraine
Oil
Coal
Natural
Gas
Iron Ore
Copper
Corn
Wheat
USD/bbl
USD/ton
USD/MWh
USD/ton USD/bushel
Macroeconomic indicators
Source: Ukrstat, NBU
62.47
53.80
12.52
120.99
USD/ton
USD/bushel
6055.25
4.36
5.03
The National Bank of Ukraine has improved its macro forecast for 2019–2021: the estimate of
the real growth of the economy this year has been raised from 2.5% to 3%, and in the next year
from 2.9% to 3.2%. the estimate of growth in 2021 remained unchanged at 3.7%, as well as the
inflation forecast at 6.3% in 2019 and 5% in 2020 and 2021
The updated macro-forecast of the National Bank of Ukraine (NBU) assumes receiving USD 2
billion from the International Monetary Fund (IMF) under the Extended Fund Facility, as well as
the issue of eurobonds worth USD 1 billion.
Russia's Gazprom has boosted gas transit to the European Union through the territory of
Ukraine by 25%, by 60 million cubic meters (mcm) per day. This is related to a halt for repairing
two lines of Nord Stream. Ukraine's existing free gas-transit capacity allow for additional
volumes of gas equivalent to the maximum of Nord Stream 2 and a hypothetical Nord Stream 3
together to be pumped to European countries
National Nuclear Energy Generating Company Energoatom, which was obliged by the
government to sell 90% of generated electricity outside the competitive market with the launch
of a new model of the electricity market on July 1, is ready to increase supplies to the biggest
industrial consumers complaining about power rates hikes, and, as before, to provide low-
priced electricity to households
NJSC Naftogaz of Ukraine and its member companies in January-June 2019 paid UAH 58.6
billion in taxes and dividends to the national budget. Revenues from the group accounted for
over 15.9% of the total revenue of the national budget for the six months of 2019
GDP growth +2.5%
Export $20,895
Import $23,529
Industrial output 0.9%
CPI 9.0%
1Q 2019, y-o-y
Jan - May 2019
Jan - May 2019 y-o-y
Jan – May 2019
Jan - May 2019 y-o-y
Jan - May 2019, y-o-y
May 2019
Jan - jun 2019, y-o-y
Jun 2019
UAH/USD (NBU, average) 26.03
Source: Ukrstat, NBU
million
+7.4%
+9.3%
+1.6%
9.0%
million

3. The Cabinet of Ministers of Ukraine officially launched Ukrainian National Startup Fund (UNSF) –
a public initiative to support innovation projects. UNSF is a state organization which will issue
grants to Ukrainian startups. The fund’s resources now amount to UAH 390 million allocated by
the state treasury
WEEKLY REPORT July 15th → July 21st, 2019
Ukrainian Business News World Business News
U.S. diesel engines maker Cummins has made an indicative offer for Volkswagen’s
MAN Energy Solutions, as the carmaker seeks to slim down its portfolio of
disparate assets. MAN Energy makes large diesel engines used in ships and power
stations. To maximize price, VW has also engaged in talks with engine maker
Jenbacher, a former General Electric business, as well as at least one Asian peer
Chinese telecom giant Huawei has won a tender for construction of a 4G network in Kyiv
subway. The tender was organised by Ukrainian mobile operators Kyivstar, Vodafone Ukraine
and lifecell. It is planed to cover the entire subway by 2020. The project costs are estimated
around USD 10 million.
Polish venture capital firm bValue opens a third fund with a capitalization of about USD 14
million. This time the investment region will cover not only Poland, but also Ukraine. The fund is
planning to invest EUR 100k+ in early stage startups and EUR 1M+ in more mature startups.
The primary focus of the fund is technology startups with global ambitions
Fitch Ratings has approved Odesa city long-term issuer default ratings (IDRs) of ‘B-’. The
outlooks are stable. In 2017 Odesa City Council had renewed the practice of cooperation with
rating agencies. Department of Economic Development of Odesa City Council has signed an
agreement with Fitch Polska S. A.
The interdepartmental commission for concluding and implementing production sharing
agreements (PSAs) in a tender for the development of the Dolphin hydrocarbon section on the
Black Sea shelf has given the same number of points (170 points) to bids of Caspian Drilling
International and Trident Black Sea
Anheuser-Busch InBev, the world’s largest brewer, is selling its Australian
operations to Japan’s Asahi for USD 11 billion and could revive the stalled
flotation of its Asian business as it looks to cut debt. For Asahi, the deal is its
biggest ever and will turn the Japanese firm into the world’s third biggest brewer
after AB InBev and Heineken
PepsiCo has struck a deal to buy South Africa’s Pioneer Food Group for USD 1.7
billion, lifting Pioneer’s shares and boosting a sector that has been hit by drought
and tough trading conditions. Pioneer’s product portfolio was complementary to
its own and would help PepsiCo to expand in sub-Saharan Africa by adding
manufacturing and distribution capabilities
EU approved Vodafone’s USD 22 billion purchase of Liberty Global’s cable networks
in Germany and central Europe, clearing the way for the British company to
become Europe’s largest mobile broadband and TV provider. The deal is the
standout move by Vodafone in its bid to become a provider of superfast
broadband and pay-TV, rather than just a pure mobile provider. The strategy is
designed to increase customer spending and deepen user loyality
International bottler Coca-Cola HBC will launch Costa Coffee products in several
markets next year after company bought the café chain from Whitbread in a USD
5.1 billion deal several months ago. The company, which sells Coca-Cola drinks in
28 countries mostly in Europe, plans to launch Costa Coffee in at least 10 of
those markets, including Bulgaria, Greece, Hungary, Poland, Romania, Russia and
Switzerland
Australian LendLease Group secured a contract with Google to develop USD 15
billion worth of residential and retail space in Silicon Valley. The deal is a
significant boom for LendLease, coming at a time when Australian developers
navigate the domestic property market’s worst downturn in a generation. It is also
a major win for LendLease’s strategy to expand abroad, and will see it reinforce its
core role as a residential developer after being hobbled by its engineering division
The Kyiv Court of Appeals has granted the petition of the British company JKX Oil & Gas with
assets in Ukraine to recognize and enforce the arbitration decision of the London Court of
International Arbitration of February 6, 2017 to recover losses of over USD 12 million