Today's Contents
Just The Facts:
- Trump calls for 'immediate' ceasefire in Ukraine
- Ukraine to cut number of SOEs to 100 from 3,000, economy minister says
- EBRD lends €80 million to Ukrnafta for 100 MW in power capacity
- US announces nearly $1 billion in new military aid to Ukraine
- Polish Gaz-System offers firm capacity to Ukraine in 2025 to ensure stable gas flow
Here's What They Think:
- Kyiv Post: Scenarios for peace in Ukraine
- Eurasia Review: View over Zelensky's leadership is polarizing
- Arab News: Ukraine war sparks concerns of global nuclear proliferation
Sober Second Thought:
- Ukrainian children face speech defects, twitching, sleep disorders amid war, analysis finds
The Trump Effect
Dear subscribers,
As URN Daily's Adam Brown unpacks his notes from the 8th annual Ukraine Investment Roadshow in London on Friday, we can offer some interesting perspectives.
The Trump presidency, one of the most important aspects of Ukraine's immediate future, was barely discussed at all. This is the trend URN Daily has seen at other conferences and in other conversations since the Nov 5 US election.
Part of the reason for avoiding discussion of Trump may be political - such discussion seems like a minefield after the divisive elections. But it's also the sheer scale of the unknown.
Alina Slyusarchuk, head of CEEMEA economics at Morgan Stanley, said Trump's peace plans for Ukraine are unknown, but are vital to Ukraine's immediate, mid-term and possibly long-term future.
If the private sector believes any peace deal he sponsors will last, it will help rebuild Ukraine. If it thinks the peace is just a fragile ceasefire, though, it will continue to steer clear of Ukraine, even if the actual fighting has stopped. Also, refugees would be more reluctant to return, denying the country crucial labor for reconstruction.
"With a fragile peace, Ukraine can continue on the current pace of (annual) growth of 4% or 5%," she said. "If there is more secure peace deal, we see 6% or 7% growth."
While the difference between the two scenarios may seem slight, she said the 7% forecast takes into account the projection that imports into Ukraine would surge in a massive reconstruction effort under the more optimistic scenario, curbing short-term growth.
At least one important aspect of Ukraine's future, which was in doubt in the past, is now clear, she said.
"Once there is a peace deal and stability, Ukraine will have to go through
longer elections at some point, and I don't have doubt anymore that the next leadership will be pro-European, pro-Western, rather than pro-Russian."
Nick Bias, head of investor relations and corporate communications for Ukrainian miner Ferrexpo, said his company's share price and its reaction to Trump's election hint at just how much demand is built up to participate in the reconstruction.
Ferrexpo shares, listed on the London Stock Exchange, have jumped from about 40 pence in September to 120 pence currently, due to optimism over an early peace for Ukraine.
"Our share price has risen three-fold since September," Bias said. "It started when it looked certain that Trump was going to win, and it's just rallied since then to the point that this evening, as we close, we're just shy of billion dollars" in market cap.
"We're actually the best-performing stock in London, and better performing than Bitcoin," he said. "But let me explain to you how that has happened. What we have noticed is that our register has grown with US shareholders in particular.
"As North America comes on at 9 am typically the volumes go up and the price goes up. My evenings are filled with chats and calls with people from the East Coast all the way to the West Coast. So many private investors, so many special situation funds, traditional institutions, all coming into Ferrexpo because we are the bellwether as the only equity listed as a Ukrainian company.
"They are passionate about Ukraine. They are passionate about reconstruction."
Trump calls for 'immediate' ceasefire in Ukraine
US President-elect Donald Trump on Sunday called for an "immediate" ceasefire in Ukraine and the launch of peace negotiations.
Trump made the remark after a meeting with Ukraine's President Volodymyr Zelensky on Saturday in Paris, where the leaders were attending a ceremony marking the reopening of the Notre-Dame cathedral.
"Zelensky and Ukraine would like to make a deal and stop the madness," Trump wrote in a post on Truth Social. "I know Vladimir well. This is his time to act. China can help. The World is waiting!"
Later on Sunday, Zelensky wrote on X that he had "a very good" meeting with Trump in Paris, noting that the war "cannot simply end with a piece of paper and a few signatures."
"A ceasefire without guarantees can be reignited at any moment, as Putin has already done before. To ensure that Ukrainians no longer suffer losses, we must guarantee the reliability of peace and not turn a blind eye to occupation," Zelensky said.
Kremlin spokesman Dmitry Peskov said on Sunday that Russia is open to peace negotiations, but that these had to be based on agreements reached in Istanbul in 2022 and on the current battlefield realities, as cited by Reuters.
In Istanbul, the Ukrainian and Russian negotiating teams drafted the Istanbul Communiqué, outlining a potential agreement framework. The proposed treaty would allow Ukraine to apply for EU membership while maintaining neutrality, cap the size of its military, abandon NATO membership plans, and prohibit foreign military bases on its territory.
It also designated Russia and Western nations, including the US and the UK, as guarantors obligated to assist Ukraine in the event of aggression.
Ukraine to cut number of SOEs to 100 from 3,000, economy minister says
Ukraine's government plans to reduce the number of state-owned enterprises (SOEs) to about 100 from the current 3,000 under a recently adopted state property policy, the country's Economy Minister Yulia Svyrydenko said.
"The goal of this optimization is to enhance the efficiency of SOEs, increase their contribution to the economy, and reduce the budgetary burden of maintaining them," Svyrydenko stated.
In an op-ed for Interfax, Svyrydenko wrote that the policy envisages specific conditions for retaining state ownership in a company, including meeting public needs for specific services, ensuring national interests, providing affordable pricing, or operating as a natural monopoly.
The policy also enhances the effectiveness of SOE supervisory boards, with appendices providing guidelines on executive and board member remuneration. According to Svyrydenko, board member compensation is capped at 40% of the CEO's maximum salary, which is set at a market rate.
The policy also includes the introduction of "letters of expectations," a new planning tool.
"This instrument allows the state to outline specific objectives for companies, including targets for profitability, liquidity, and other indicators, as well as the volume of state budget funding and dividend payments," the minister wrote, adding that a failure to meet these objectives could result in the dismissal of management board members.
Svyrydenko highlighted the policy's approach to dividends, emphasizing that during martial law, SOEs are required to allocate 75% of profits as dividends. Post-war, dividend calculations will incorporate critical investment needs, such as recovery efforts.
Svyrydenko concluded by outlining the next steps following the adoption of the state property policy, including conducting asset triage, privatizing or liquidating redundant state assets, forming supervisory boards in selected state enterprises, and distinguishing between commercial and non-commercial activities.
EBRD lends €80 million to Ukrnafta for 100 MW of power capacity
The European Bank for Reconstruction and Development (EBRD) said it is providing a €80 million sovereign guaranteed loan to Ukraine's state-owned oil and gas firm Ukrnafta for the installation of 100 MW of energy capacity.
Specifically, the funding will be used to supply and install small-scale gas-fired distributed power and co-generation capacities across Ukraine.
The loan will be co-financed by investment grants of €9.5 million from the Netherlands and €12.5 million from the US, through the EBRD's Crisis Response Special Fund, the lender said in a press release on Friday.
The gas-fired engines will initially provide energy to supplement the national supply. In the future, the same equipment can support Ukraine's strategy to expand the share of renewables in its energy mix by balancing the intermittent input from renewable sources, as per the statement.
The EBRD told Ukraine Rebuild Newswire last week it had approved a total of €1.186 billion in loans, guarantees, and grants for eight projects in Ukraine, including the Ukrnafta package.
Since the start of the Russian invasion in February 2022, the EBRD made more than €5.3 billion available to Ukraine, of which more than €1.5 billion this year, the lender said on Friday.
US announces nearly $1 billion in new military aid to Ukraine
US Secretary of Defense Lloyd Austin on Saturday announced a new military aid package for Ukraine amounting to $988 million.
The military equipment package, provisioned under the Ukraine Security Assistance Initiative (USAI), includes unmanned aerial systems, rocket munitions, and support for maintenance and repair programs.
The aid marks the 22nd USAI package issued under the Biden administration, bringing the total of US security assistance for Ukraine since Russia's full-scale invasion in February 2022 to over $62 billion, the US Department of Defense said in a press release.
Austin stated he has convened the Ukraine Defense Contact Group, a global coalition of around 50 partners dedicated to addressing Ukraine's immediate battlefield needs and strengthening its long-term capacity to deter future aggression, 24 times since April 2022.
"Its other members have committed more than $57 billion in direct security assistance to Ukraine," Austin said, adding that, as a percentage of GDP, more than a dozen members of the contact group now provide more security assistance to Ukraine than the US.
Poland's Gaz-System offers firm capacity to Ukraine in 2025 to ensure stable gas flow
Gaz-System will introduce firm capacity for natural gas transmission from Poland to Ukraine during the first three quarters of 2025, the Polish pipeline operator said in a press release.
The company has previously provided interruptible service, and the change in 2025 will allow Gaz-System to ensure stable and reliable gas flow to Ukraine.
"Providing firm natural gas transmission services to Ukraine will enhance energy security in the region," said Gaz-System President Sławomir Hinc. "Network users connected to the Poland-Ukraine gas interconnector will be able to ensure stable gas supply to their customers in Ukraine."
Gaz-System was able to implement the change due its investment program, which aimed at strengthening energy security in Poland and the region.
Kyiv Post: Scenarios for peace in Ukraine
Securing peace in Ukraine has become an urgent matter as US President-elect Donald Trump considers three potential approaches, including freezing battle lines, creating a demilitarized zone, and establishing "autonomous zones" in Eastern Ukraine, according to an op-ed published by Kyiv Post. Meanwhile, Ukraine seeks a lasting resolution that ensures its sovereignty, while the EU countries are exploring a €500 billion joint defense fund.
Eurasia Review: View over Zelensky's leadership is polarizing
The leadership of Ukraine President Volodymyr Zelensky during the ongoing war with Russia has been polarizing, according to an op-ed published by Eurasia Review. Many view him as a wartime leader who secured vital international support, while other criticize him for being reckless and accuse him of prioritizing Western interests over Ukrainians' well-being.
Arab News: Ukraine war sparks concerns of global nuclear proliferation
The focus on the impact of Ukraine's ongoing war on food insecurity and energy has overshadowed its effects on global nuclear nonproliferation, according to an op-ed published by Arab News. Russia's invasion has raised doubts about disarmament, emboldened nuclear-aspiring states, and prompted fears of nuclear technology transfers to North Korea and Iran.
Ukrainian children face speech defects, twitching, sleep disorders amid war, analysis finds
Some Ukrainian children are developing speech defects and uncontrollable twitching, while others are suffering sleep disorders due to the war, an analysis by Save the Children showed.
Out of the 2,580 children that have received case management support from Save the Children between January and June 2024, 1,107, or 43%, were suffering from psychosocial distress.
The data also revealed that children in all of the 20 Ukrainian regions where the organization operates exhibit symptoms such as anxiety, fear, mood swings, difficulty concentrating, and irritability.
Caseworkers have reported that at least five children aged 8 to 16 in Kharkiv, a city near the frontline under constant aerial attack, have developed gray hair. Caregivers and doctors attribute this to the extreme stress caused by the war.
"The cases we're managing are becoming more severe and a lot harder to support," said Abeer Jawad, Save the Children's case management technical advisor in Ukraine.
"We're seeing children who have been evacuated from the frontline areas and separated from their parents, children who have stepped on landmines and now have life-changing injuries, children who have lived in occupied areas, children who have witnessed their parents' deaths – the list is horrifying and endless," Jawad added.
Reports of mental health issues in Ukraine, including depression, anxiety, and PTSD, are increasing, with studies showing that adolescents exposed to war are more likely to experience depression, Save the Children noted.
Nearly 10 million of Ukraine's 37 million people, including 1.4 million children, are estimated to be at risk of developing or already living with mental health conditions due to the war, according to Save the Children.
UkraineInvest, the state investment promotion agency, posted that it signed a memorandum with Ukraine's Sense Bank to attract capital investments exceeding €12 million each and develop "a transparent, reliable and effective investment environment."
Wesley Jordan announced that he has taken the position of CEO of the microfinance institution VisionFund Ukraine. Previously he had served in various positions for VisionFund International, including chief technology officer, since 2014.
Olga Batova, business development and public affairs director at French company Saint Gobain in Ukraine, announced that Friday Dec 6 was her last day at the company. She didn't say what she will do next but emphasized that "it is crucial to focus on Ukrainian businesses and work towards making Ukraine a successful country with strong, competitive enterprises."
The American Chamber of Commerce in Ukraine, citing a survey taken at the annual membership meeting on Dec 5, said that 77.8% of its members expect a ceasefire in 2025.
URN Daily: Sense Bank and Ukrgasbank for sale? And US seeks to cancel $4.7 billion of Ukraine's debt
