Today's Contents
Reporter's Notepad:
- 3 tips for investors aiming to help rebuild Ukraine, from Biden's deputy envoy to the reconstruction
Just The Facts:
- European Council greenlights about €3.5 billion in third payment to Ukraine
- Ukraine's MHP partners with American Global Strategies to boost global expansion, food security
- Ukraine's Naftogaz buys additional 100 mcm of LNG from Polish Orlen
- Ukrainian, South Korean foreign ministers discuss peace talks, handling of North Korean prisoners of war
- Ukraine deputy minister for communities visits UK to discuss reconstruction investments
Here's What They Think:
- The Conversation: Global army of online warriors still fights for Ukraine
- The Kyiv Post: Rebuilding relations with Russia means endorsing its regime and war crimes
Sober Second Thought:
- The pace of business activity recovery in Ukraine falls to two-year low in February; long-term uncertainty also abates, survey finds
Dear subscribers,
Here's the latest installment in our "Tips for Investors" series. For the full series so far, visit this link.
3 tips for investors aiming to help rebuild Ukraine, from the ex deputy envoy to the reconstruction
Tyson Barker, a foreign policy professional specialized in US-Europe relations, has served two stints as a political appointee with the US government.
Both times, he served under powerhouse women - first Victoria Nuland in the Obama administration and then Penny Pritzker during the Biden administration. Both times, he was hired to focus on US relations with Brussels. And both times, Ukraine became his sole focus.
In his latest period in office, Tyson started out as senior adviser to the bureau of European and Eurasian Affairs, but soon became Deputy Special Representative for Ukraine's Economic Recovery.
The period started under Pritzker, renowned among Ukrainian government officials for “being short, being accurate, being exact and being straightforward” as well as for her preference for private-sector solutions. It ended under Richard Verma, a seasoned diplomat and former US Ambassador to India who served as envoy to the reconstruction for the final five months of the Biden administration.
Tyson's role gave him an ultimate inside view into foreign investment in the reconstruction of Ukraine. In a conversation with Ukraine Rebuild Newswire last week, he offered these tips for companies investing in, or considering investing in, the reconstruction of Ukraine.
Tyson Barker's 3 Tips for Foreign Investors in Ukraine's Reconstruction
#1 - Close the Engagement Gap with Development Finance Institutions (DFIS)
DFIs, such as the US International Development Finance Corporation (DFC), Germany's KfW, France's AFD, Poland's BGK and the UK's BII, have many programs that take much of the risk out of investing in Ukraine. A communications gap between DFIs and the private sector, however, means that many companies are unaware.
"The DFIs are not the best at communicating their financial instruments so the global private sector is not always aware that these funding instruments are available. They're not synapsing. So my first tip to businesses is to engage with DFIs directly."
"You can offload the risk associated with investing in Ukraine by working with KfW or the Polish, British, or French DFIs. Through the European Union, they can make available more than €9 billion euros in Pillar II financing meant to incentivize investment in Ukraine."
"So if you are an Italian, or a German middle-sized company looking to create intermediary auto parts in Ukraine, or you're an agribusiness equipment company looking to produce in Ukraine, you may not be aware of instruments that will substantially reduce the cost of investing."
"On the US side, there is the possibility that DFC will be even a more significant actor in the future. It's unclear still, but there are discussions in Washington about DFC taking on a bigger role in general assistance, because it is, of course, more private sector-minded."
#2 - Leverage Business Associations
The American Chamber of Commerce in Ukraine, the U.S.-Ukraine Business Council, the Ukraine-based European Business Association, the German-Ukrainian Chamber of Industry and Commerce (AHK Ukraine), the CCI France Ukraine and many other business associations can offer major levels of assistance to investors.
"Their number one interest is providing support for their members, but the associations also want to generate a dynamic private sector investment climate. That means providing general advice on how to engage in Ukraine."
"The AmCham Kyiv is amazing - they're such a great resource. So is the USUBC, particularly in opportunities for the defense sector. We learned a ton from them. They had such great visibility into the landscape. They were honest. But you know, always looking for opportunities. So I don't know how the others are. I don't know how the Germans are, or the French or what are the other associations, but my assumption is that those associations are good window."
"In the Biden administration, we worked very closely with (AmCham Ukraine President) Andy Hunder and (USUBC President) Irina Paliashvili. They were very, very professional was my sense."
#3 - Take Advantage of Ukraine's Rapid Innovation Cycle
"The third tip has to do with the Ukrainian innovation cycle. I would say it's the fastest in the world. You see this obviously in the defense sector. Development to deployment in the field is a cycle that could be weeks, whereas in the United States it's years."
"But this same mentality is present in government and government-adjacent industries. In government you have very pragmatic, outcome-oriented people ready to work within the bounds of the law to get results quickly."
"Ukrainian civil servants work harder than anyone. They're up earlier. They're in bed later. I don't think that foreigners realize that fully. I think foreigners have a Brezhnevian idea of how business works with government in Kyiv and that was not our experience."
"The US companies we worked with were very impressed when working with government and seeing that development cycle – the MacGyvering. That velocity can really be a competitive advantage."
Dear reader,
For questions related to daily news, story suggestions, scoops and other newsy matters, please message URN newsroom chief Valentina Bajic at valentina@ukrainerebuildnews.com.
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Now, on with the day's headlines ...
European Council greenlights about €3.5 billion in third payment to Ukraine
The European Council said it has approved €3.5 billion as a third payment of repayable grants and loans to Ukraine under the €50 billion Ukraine Facility.
The approval follows the Council's assessment that Ukraine "had satisfied the necessary conditions laid down in the Ukraine Plan," according to a press release.
In particular, Ukraine has passed reforms to increase the use of renewable energy and the autonomy of the energy regulator, simplify border-crossing protocols in line with EU standards, and adopt a strategy for agriculture and rural development. It also continues working on listing strategic and raw materials.
With this third disbursement, Ukraine has received about €20 billion under the Facility since it entered into force in March last year, according to the release. To date, the Facility has disbursed €6 billion in bridge financing, €1.89 billion in pre-financing, and two installments of approximately €4.2 billion and €4.1 billion.
The Ukraine Facility, a series of grants and loans to be disbursed between 2024 and 2027, aims to promote macro-financial stability in Ukraine. It also seeks to promote short-term recovery, and aid rebuilding and modernizing efforts, as Kyiv implements key structural reforms to advance its EU accession plans.
Ukraine's MHP partners with American Global Strategies to boost global expansion, food security
Ukraine's agricultural producer MHP has partnered with American Global Strategies (AGS), a US consulting company led by former National Security Advisor Robert O'Brien, to expand its export potential and reinforce food security in the international market.
AGS will assist MHP in unlocking new opportunities for global market integration and contribute to regional food security by ensuring stable and resilient supply chains, the companies said in a press release.
MHP is one of Ukraine's largest producers of poultry, culinary and processed meat products, as well as grains and oils, employing around 30,000 people.
The company exports its products to more than 80 countries and manages a land bank of 360,000 hectares across 12 regions in Ukraine, the release said.
Last December, MHP said it had submitted a binding offer to acquire Spanish poultry business Uvesa. The acquisition is subject to 50.01% approval from shareholders.
Earlier this year, agri-food business Grupo Fuertes also submitted a takeover offer for Uvesa, according to a separate Ukraine Rebuild Newswire report.
Ukraine's Naftogaz buys additional 100 mcm of LNG from Polish Orlen
Ukrainian oil and gas company Naftogaz said on Tuesday it has agreed to buy an additional 100 million cubic meters (mcm) of liquified natural gas (LNG) from Polish energy firm Orlen for strategic gas reserves ahead of the next heating season.
"Cooperation with Orlen expands Ukraine's LNG import capacity and enhances energy security. We are diversifying supply sources to ensure a reliable and accessible gas supply, especially amid ongoing Russian attacks on our infrastructure," said Naftogaz acting Board Chairman Roman Chumak.
The fuel will come from a shipment of US LNG and will be transported to Ukraine in April, Naftogaz said in a press release.
This marks the second gas supply agreement under the companies' memorandum of understanding (MoU), following a previous deal for the delivery, also of 100 mcm.
Naftogaz and Orlen signed the MoU earlier this month, outlining the terms of their partnership in the LNG sector.
Ukraine could import as much as 4 billion cubic meters of gas between April and October as it looks to compensate for production losses amid Russian attacks on the country's gas infrastructure, Dmytro Lyppa, the CEO of LLC Gas TSO of Ukraine, the country's gas transmission system operator, said last week.
Up to half of the gas imported via Europe would come as LNG delivered to European terminals in Germany, Greece, Lithuania, and Poland rather than pipeline gas, and as much of this as possible could come from the US, according to Lyppa.
Ukrainian, South Korean foreign ministers discuss peace talks, handling of North Korean prisoners of war
South Korea's Foreign Minister Cho Tae-yul and Ukraine's Foreign Minister Andrii Sybiha held a telephone conversation on Monday to discuss South Korea's support for Ukraine, end-of-war negotiations, and the handling of North Korean prisoners of war.
Cho reaffirmed South Korea's commitment to supporting the Ukrainian people and stated that Seoul would accept any North Korean soldiers captured by Ukraine if they wished to relocate to South Korea, the countries' foreign ministries said in separate news releases.
Sybiha briefed Cho on the outcomes of recent high-level talks between the United States and Ukraine in Jeddah, Saudi Arabia, the South Korean foreign ministry said.
Over 12,000 North Korean troops began fighting Ukrainian forces in Russia's Kursk region last December, Deputy US Ambassador to the UN Dorothy Camille Shea told the United Nations Security Council in January, as reported by Reuters.
"The DPRK is significantly benefiting from receiving Russian military equipment, technology and experience, rendering it more capable of waging war against its neighbors," Shea said.
President Volodymyr Zelensky said in January that approximately 4,000 North Korean soldiers were killed or injured in the war, according to The Kyiv Independent.
South Korea's Joint Chiefs of Staff also stated earlier this year that North Korea "is suspected of accelerating follow-up measures and preparation for an additional dispatch of troops," The Guardian reported.
Ukraine deputy minister for communities visits UK to discuss reconstruction investments
Ukraine's First Deputy Minister for Communities and Territories Development, Alyona Shkrum, met with UK government officials and business leaders during a visit to London focused on attracting investments for Ukraine's reconstruction.
The discussions addressed Ukraine's reconstruction strategies, the involvement of British businesses in infrastructure recovery programs and public-private partnerships, as well as war risk insurance, the Ukrainian government said.
"British businesses are ready to join our projects and invest in Ukraine right now. This was discussed during a meeting with more than 25 major investment funds and corporations listed on the London Stock Exchange," Shkrum said in a press release. "We urged them to invest in reconstruction, transportation, and infrastructure projects."
The UK has provided approximately £12.8 billion in support to Ukraine since the Russian full-scale invasion in 2022, including £7.8 billion of military assistance.
The Conversation: Global army of online warriors still fights for Ukraine
As a ceasefire in Ukraine may seemingly happen at any moment, online communities with global reach as well as individuals continue to fight Russian war propaganda by raising awareness of what is happening in the war-torn country, Olga Boichak, lecturer at the University of Sydney, and Kateryna Kasianenko, a PhD candidate at the Queensland University of Technology, wrote in an op-ed for The Conversation.
In response to the Russian propaganda, online communities are using their platforms on social media to help Ukrainian voices be heard by sharing individual stories. These communities have also managed to launch different actions to raise funds for Ukraine's military and humanitarian needs, the authors wrote.
The Kyiv Post: Rebuilding relations with Russia means endorsing its regime and war crimes
A number of prominent Westerners suggesting that relations with Russia should be restored is growing although this may eventually lead to the legitimization of its criminal regime and war crimes, a Warsaw-based journalist Adam Borowski wrote in an op-ed for the Kyiv Post.
Reestablishing ties with Russia will only embolden the Kremlin to escalate the war and challenge NATO's eastern flank, Borowski wrote. "Not everyone in the world cares about making deals. Putin is more inclined to see the world burn if he doesn't get what he wants," he concluded.
The pace of business activity recovery in Ukraine falls to two-year low in February; long-term uncertainty also abates, survey finds
The Business Activity Recovery Index (BARI) in Ukraine fell to its lowest level in the past 24 months in February, to zero, from 0.09 in January, according to a survey conducted by Kyiv-based think tank Institute for Economic Research and Policy Consulting (IER).
The BARI reflects the balance between respondents who reported improved business activity at their enterprise compared to the same period last year and those who reported a decline.
The February survey, which involved 466 industrial enterprises across Ukraine, showed that 21.1% of respondents indicated their business activity was "better," down from 27.8% in January. Meanwhile, 20.7% reported that conditions had worsened, an increase from 18.5% the previous month. At the same time, 58.1% of respondents noted no change in business activity.
Despite the decline in the BARI, the indicator of long-term uncertainty has decreased, which indicates an increase in business confidence in its future, as per the survey results.
In February, the share of respondents who could not predict the development of their business for two years ahead declined by 8 percentage points – from 37% to 29%.
In February, 79.5% of businesses expected to remain at their current production levels in two years. At the same time, the share of those planning to expand their activities reached over 15%, and those planning to narrow them stood at 5%, as per the survey.
The main obstacle to doing business in wartime Ukraine remains the lack of labor due to conscription and/or departure of employees, with 64% of enterprises reporting this as their main problem in February.
In addition, 56% of enterprises voiced concerns about rising prices for raw materials and supplies - the highest level since August 2023. While 52% of businesses consider unsafe working conditions an obstacle to their business, this is the local minimum for the last six months.
The most significant change in the ranking of obstacles for February was observed in the decline in the indicator "decreased demand for products or services" from 39% to 29%, as per the survey.
Ukrainian GovTech Gains Fans in Geneva
Zoya Lytvyn, head of the Global Government Technology Centre Kyiv, the world's second GovTech Centre after Berlin, recapped a meeting with Swiss government officials in Geneva to present Ukrainian achievements in the area.
"The audience (from mayors to commissioners) was very grateful and impressed by Ukrainian GovTech," she said. "For example, the presence of a Chief Digital Transformation Officer in each of our ministries and regions. But what impressed them the most was the ability to get married and register newborns in Diia."
Tenders for Energy-Efficient Government
Anna Zamazeeva, head of the State Agency on Energy Efficiency and Energy Saving of Ukraine (SAEE), said the agency has processed over 2,000 applications for energy audits and certifications, and received more than 1,000 applications to install solar power stations in its push for energy efficiency in government.
Next, the agency will issue tenders and energy certificates, she said, adding that optimizing energy consumption in state institutions can save around 8 billion UAH (almost $193 million) a year from Ukraine’s budget.
Finnish Construction Expertise
The international chamber of commerce EastCham Finland promoted an article citing member Aleksandria outlining some of the changes taking place in the Ukrainian construction sector and the advantages of Finnish expertise.
"Previously, Ukraine's goal was to maximize residential square meter construction. Now, areas are planned as complete entities with schools, shops, sports facilities, and leisure amenities," the post states. "Urban development increasingly incorporates international expertise."
Ukrainian Firms to Help Develop US Drones
The NGO TechUkraine promoted an article stating that two Ukrainian companies have secured contracts with the US Defense Innovation Unit (DIU) to develop advanced drone prototypes.
The article, which doesn't name the companies, says that "each Ukrainian manufacturer is partnering with an American software development company, emphasizing the integration of Ukrainian technologies into the broader US defense innovation ecosystem."
Property Law Changes for Investors
CMS Ukraine, the local branch of the global law firm, posted a legal alert explaining recent changes in Ukrainian property laws meant to protect investors and private companies from "unexpected property reclamation."
"The changes are expected to provide greater security and predictability for investors and private companies that have acquired assets from the Ukrainian government or municipalities," the law firm said.
URN Daily: Sense Bank and Ukrgasbank for sale? And US seeks to cancel $4.7 billion of Ukraine's debt
