Contents
Just The Facts: Ukraine's ARX signs reinsurance deal with DFC to cover homes and business property against Russian missile attacks, European Commission approves €4.1 billion allocation under Ukraine Facility, Ukrainian lawmaker sentenced to 8 years in prison in first-ever crypto bribery case, EBRD mulls €180 million loan to Ukrainian Railways for 270 MW of power capacity.
Here's What They Think: The Atlantic Council warns that freezing the front lines would live millions of Ukrainians under Russian rule, and The Washington Post says Biden has an opportunity to strengthen Trump's hand for eventual negotiations with Putin.
Sober Second Thought: Ukraine may suffer a shortage of 108,000 teachers by 2030, a study conducted by Ukraine's non-profit organization Osvitoria found. The teaching staff suffered the most significant losses with the beginning of the full-scale invasion. During the period, the teaching staff was reduced by 12%, or by almost 40,000 teachers.
The Rebuilder's Social: JETRO Kyiv visits Horizon Capital in Kyiv to discuss "promising business areas" while Integrites offers an overview of the "reboot" of Ukrainian customs regulation, Ukrhydroenergo met with the CEO of Slovenia's RIKO, to discuss "opportunities to restore lost capacities" and Sayenko Kharenko explores "the challenges of enforcing arbitral awards involving sanctioned entities in Ukraine."
Dear subscribers,
Commercial flights to Ukraine in January?
Crispin Ellison, who is working closely with the Ukrainian government as senior partner at Marsh McLennan, said last week at the 10th Kyiv International Economic Forum that Ukraine would likely resume operations at an international airport in January.
It would be easier to provide insurance arrangements for aviation if aircraft start flying from Lviv, he said, but President Volodymyr Zelensky insists that Boryspil be the first to open.
So URN Daily was eager to ask him for more details in Warsaw this week, but ...
"I'm not going to say anything more about aviation, because I got into severe trouble when my comments went viral last week," Ellison said.
He did, however, add that "we're trying to put insurance together to help Ukraine open up western Ukraine airspace to commercial transport. We're quite close to being ready to do that."
So we may have to wait for January for more news.
Complete notes coming from the Warsaw ReBuild expo soon.
Ukraine's ARX signs reinsurance deal with DFC to cover homes, business property against Russian missile attacks
Ukraine's ARX Insurance has started offering coverage for property against missile and drone attacks in Ukraine with a reinsurance contract with the US International Development Finance Corporation (DFC).
The insurer, a subsidiary of Canadian insurer Fairfax Group, is using the DFC reinsurance to help it cover property at least 100 kms from the front line for damages of up to 100 million hryvnias ($2.5 million) per object, said ARX Deputy CEO Maksim Mezhebitsky.
Each object must be at least half a kilometer from any other insured object to minimize risk of catastrophic damage, he said.
"Despite these limits, the demand for this cover is quite huge," Mezhebitsky said at a meeting on war risk insurance organized in Warsaw, attended by Ukraine Rebuild Newswire. "We insured almost 300 objects, commercial properties and private houses."
The company had been devising and testing the insurance since the full-scale Russian invasion of 2022 with the goal of eventually attracting a reinsurer. He started negotiations with DFC in January and signed the contract Nov 1 - about two weeks ago.
The US special envoy to the reconstruction of Ukraine, Richard Verma, also commented on the deal during a speech in Warsaw, calling it a "$50 million commitment for a new War Risk Reinsurance Facility."
"This facility will unlock more than $200 million in new coverage for static assets in Ukraine," he said. "The deal, brokered by the American insurer AON and facilitated by the Special Rep’s office, will offer coverage for agriculture, retail, and other key business assets."
ARX also hoped to attract the attention of commercial insurers with the offer.
"And that's exactly what happened," said Mezhebitsky. "I had a call from a Lloyds broker saying that some syndicates, when they realized that insurance is going on already in Ukraine, decided to allocate from a $5 million to $25 million limit, based on our coverage, first of all in the western part of Ukraine."
He added no further details but referred to the call as "a huge step forward."
A few days ago, though, the company suffered its first loss, with "damage to an industrial facility from a drone strike," he said. "The potential loss is half a million dollars based on our assessment."
Many of the original insurance contracts, however, were signed last year, before the contract with the DFC, which has also signed a contract with insurer Aon for war-risk reinsurance.
"Some of them already renewed for the second year because those contracts started last year from August and September," he said at the meeting, organized by the European Commission at the annual ReBuild Ukraine exhibition in Warsaw.
Although no representative of DFC was at the meeting, ARX passed on a comment from Agnes Dashevych, head of the DFC Investment Committee.
"In cooperation with the private sector, DFC builds investor confidence where it is most needed, and also mobilizes the capital necessary to strengthen the economy of Ukraine - now and in the future," she said. "DFC political risk insurance will provide significant support to the Ukrainian people and the country's economy, for which we will continue to work to create a brighter and more secure future for the country."
In June, DFC and insurer Aon agreed to offer a $350 million war insurance program for Ukraine to encourage investment and economic recovery in what Aon called a first-of-its-kind offering that included $50 million in war reinsurance.
European Commission approves €4.1 billion allocation under Ukraine Facility
The European Commission (EC) has greenlighted the second regular payment of nearly €4.1 billion under the EU's Ukraine Facility, to support the country's macro-financial stability and its public administration.
When adopted by the Council, this decision will raise total 2024 disbursements for the Ukraine Plan to €16.1 billion, the EC said in a press release on Thursday.
The EC said it found that Ukraine has satisfactorily met the nine agreed reform indicators for the payment, encompassing areas such as anti-corruption efforts, business environment, labor market, regional policy, energy market, and environmental protection.
The EU's €50 billion Ukraine Facility, provided in grants and loans for the period 2024-2027, supports Ukraine in sustaining macro-financial stability, promoting short-term recovery and rebuilding the country while implementing key reforms to advance on its EU path, the statement read.
The Ukraine Plan, which outlines Ukraine's strategy for modernization, recovery, and reconstruction, includes reforms in energy, agriculture, transport, the green and digital transition, human capital, state-owned enterprises, the business environment, public finances, and decentralization.
Ukrainian lawmaker sentenced to 8 years in prison in first-ever crypto bribery case
Ukraine's High Anti-Corruption Court (HACC) found member of parliament Andrii Odarchenko guilty of attempting to bribe the former head of the State Agency for Reconstruction, Mustafa Nayem, with bitcoin, and sentenced him to eight years in prison.
The case marks the first-ever documented instance of a bribe offer in cryptocurrency, HACC said in a statement on Thursday.
Odarchenko allegedly offered Nayyem a bribe equivalent to $50,000 in crypto in August 2023. Odarchenko sought out Nayyem to facilitate the allocation of funds for the repair of the university buildings, where Odarchenko continues to hold the position of rector, the court said.
As soon as the funds were allocated, Nayyem received bitcoins equivalent to $10,000 in his crypto wallet. Nayyem, however, reported the bribery attempt to the National Anti-Corruption Bureau and became a whistleblower in the case.
Odarchenko left Ukraine before the court hearings began, according to Transparency International Ukraine. The MP was put on the wanted list but joined the hearing online, claiming he left the country due to "a threat to his life and health," Transparency wrote in a post on LinkedIn.
The court's verdict is subject to appeal.
Nayyem resigned from the State Agency for Reconstruction in June, citing "systemic obstacles that do not allow him to effectively carry out his duties."
EBRD mulls €180 million loan to Ukrainian Railways for 270 MW of power capacity
The European Bank for Reconstruction and Development (EBRD) is considering providing a €180 million sovereign guaranteed loan to Ukrainian Railways (Ukrzaliznytsia) for the installation of up to 270 MW of small-scale gas-fired power generation capacity.
The funding would help Ukrainian Railways address the electricity shortage and ensure continuous energy supply for residents and businesses, the EBRD said on Thursday in a project document.
The approval date for the loan is set for Dec 4.
The EBRD said the total cost of the project amounts to €248 million and that it will be co-financed by parallel investment grants of €12 million from the UK and €56 million from a multilateral or bilateral international donor.
Veon explores US IPO for Ukraine's Kyivstar
Wireless operator Veon is considering an initial public offering (IPO) in the US as early as next year for Ukraine's biggest mobile company, Kyivstar, Veon CEO Kaan Terzioglu told Reuters in an interview.
"We have not made those decisions yet, but we are committed to looking into IPOs of our local assets," Terzioglu stated. "And clearly, Kyivstar is one of those assets which could be in the line of this process."
Terzioglu said the process is still in the early stages and no discussions on the topic have been held with Ukrainian officials.
If the IPO proceeds, Kyivstar would be the first Ukrainian company to be listed in the US, according to Reuters.
In October, Veon shareholder Shah Capital Management urged the telecoms firm to list Kyivstart to boost its share price. US-based Shah Capital argued at the time that Kyivstart should be listed on Nasdaq.
In an interview with Bloomberg earlier this year, Terzioglu identified Kyiv, Warsaw and London as potential venues for the Kyivstar IPO.
"For Ukraine, I think the local IPO in the Ukrainian market probably is a little bit more longer term issue than having an IPO in an international market," Terzioglu told Reuters.
US to allocate $100 million for Ukraine's cybersecurity infrastructure
The US will provide $100 million to Ukraine to strengthen the country's cybersecurity infrastructure, said Richard Verma, the US special envoy for the reconstruction of Ukraine.
The funding will also be used to boost critical government services and access to information and communications technology for Ukrainians, Verma stated at the ReBuild Ukraine conference in Warsaw.
The package will strengthen Ukraine's cybersecurity across all government sectors by providing technical assistance, workforce development, and modernizing critical network infrastructure, he noted.
"The United States is committed to helping Ukraine's defense and cyber industries so they can help win the war, protect the country, attract private sector investment, scale up, become exporters, and contribute to Ukraine's future economic greatness," Verma said.
Atlantic Council: Freezing Ukraine's front lines would leave millions under Russian occupation
Western leaders must understand that trading land for peace in Ukraine would abandon millions of civilians to the harsh realities of Russian occupation and the fate of these Ukrainians should not be overlooked as discussions about a negotiated settlement progress, program assistant at the Atlantic Council's Eurasia Center, Mercedes Sapuppo, wrote in an op-ed.
In occupied regions, the Kremlin is trying to erase Ukrainian identity by renaming streets, switching to Moscow time, and pressuring residents to accept Russian citizenship for basic services like healthcare and pensions, Sapuppo wrote. Ukrainian schools now teach a Kremlin-approved curriculum that vilifies Ukraine and glorifies invading soldiers, with parents who resist facing the risk of losing custody of their children, she noted.
Sapuppo also wrote that a large number of Ukrainians in occupied regions of the country have been subjected to forced deportation or have simply disappeared and that at least 20,000 Ukrainian children have been abducted from occupied regions since the start of the full-scale invasion.
Sapuppo noted that while US President-elect Donald Trump has not clarified his vision for a potential settlement in Ukraine, allies like Vice President-elect JD Vance have indicated that any agreement might involve freezing the conflict along current front lines and allowing Russia to retain control over about 20% of Ukraine.
The Washington Post: How Biden can influence Trump's potential Ukraine deal
Despite not managing to put forward a vision for ending the war in Ukraine, the Biden administration still can help strengthen Trump's hand at the negotiating table, Columbia University senior researcher Edward Fishman wrote in an op-ed published by the Washington Post.
The US maintains leverage over Kyiv as its most important weapons supplier, but its influence over Moscow has dwindled over the past 18 months due to the Biden administration's failure to address major sanctions loopholes, Fishman argued. President Joe Biden was hesitant due to political considerations - for example, ramping up Russian oil sanctions might spike oil prices, resulting in inflation that could damage Democrats' chances in the 2024 elections.
To overcome mishaps, Fishman continued, the Biden administration should close the Russian energy loophole. This could make it harder for Russian President Vladimir Putin to fund the war, giving Trump leverage when negotiating a peace deal.
The second step for Biden is to expand secondary sanctions to target buyers of Russian oil and companies aiding Russia's energy industry, which would limit Russia's abilities to bypass Western sanctions by building a "shadow fleet" of oil tankers. Imposing secondary sanctions before leaving office, with a phase-in period of a few months would allow markets to adjust and incentivize producers with spare capacity to increase production output.
The final step is to ensure Congress has a say in any future decision to lift sanctions on Russia, as the current framework allows the president to lift sanctions without Congressional approval. Restoring congressional oversight would strengthen Trump's negotiation position with Putin, and would reduce the possibility of Putin persuading Trump to accept a bad deal.
"There is no greater contribution Trump could make to the cause of world peace than ending the Russia-Ukraine war," Fishman concluded, adding that the Biden administration should do everything it can in the little time it has to support Trump in ending the war.
Ukraine to lack 108,000 teachers by 2030, study finds
Ukraine may suffer a shortage of 108,000 teachers by 2030, a study conducted by Ukraine's non-profit organization Osvitoria found.
The teaching staff suffered the most significant losses with the beginning of the full-scale invasion. During the period, the teaching staff was reduced by 12%, or by almost 40,000 teachers, Osvitoria said in a press release.
From 2018 to 2023, the number of teachers in cities declined by 10.9%, while in villages this indicator is more than twice as high – 22.8%, according to the study.
In addition, the teaching staff is gradually becoming older. The average age of Ukrainian teachers is 45 years, and more than 30% of the teaching staff are teachers of pre-retirement and retirement age. Over the past 5 years, the number of young teachers under 30 has decreased by 1.6 times, the study found.
The results showed that more than 40% of teachers are determined to leave the profession by 2030, while less than half of teachers are satisfied with their work.
More than 10,000 educators were involved in the study, which lasted for over a year.
Ukrainian law firm Sayenko Kharenko has launched a series of articles "exploring the challenges of enforcing arbitral awards involving sanctioned entities in Ukraine." The first one looks at how Ukraine balances its obligations under the New York Convention "with the need to safeguard national security."
JETRO Kyiv, the local office of Japan External Trade Organization, said its staff visited private equity group Horizon Capital in Kyiv to discuss the group's "investment policy" as well as "promising business areas for business development between Japan and Ukraine."
Thus, the management of Ukrhydroenergo met in Warsaw with Janez Škrabec the CEO and founder of Slovenia's RIKO, to discuss "opportunities to restore lost capacities and implement new hydropower projects."
Ukrainian law firm Integrites offered an overview of "the reboot" of Ukrainian customs regulation aimed at aligning national customs with the EU norms. "Some changes will come into effect in spring 2025. However, certain provisions took effect immediately upon publication and are already in force."
