Today's Contents
Reporter's Notepad:
- Citi Ukraine says it's talking with investors around the world about Ukraine right now
Just The Facts:
- US and Russia start talks in Riyadh, without EU or Ukraine, on ending the war
- Ukraine signs free trade deal with UAE, expects growth in exports of metallurgical products, processed foods
- IMF mission set to start work in Ukraine for 7th review of EFF loan program
- Ukraine's government set to disburse €100 million to local budgets under third phase of recovery program
- Proposed contract would have given US 50% of Ukraine's revenue from resource extraction, Telegraph reports
Here's What They Think:
- The Telegraph: Ukraine giving up on West due to failed promises
- Al Jazeera: Hedging is EU's only feasible option in relations with US
Sober Second Thought:
- Ukraine's infrastructure suffers damages of $170 billion amid war, KSE study finds
Dear readers,
As we interview notable figures in the Ukraine reconstruction scene to prepare a series of articles relaying advice to newcomers, we often come up with interesting news or commentary that's worth publishing here, in Reporter's Notepad.
Late yesterday, we spoke to Alexander McWhorter, the New Jersey native who has served as the Citi country officer for Ukraine since 2018. Some 500 multinationals are Citi clients in Ukraine currently.
We will publish his banking-related advice for newcomers to the Ukraine reconstruction soon, but his position within the broader Citi network gives him a global perspective on the sudden growth in interest in the reconstruction of Ukraine. We reproduce some of his comments here:
"We're having conversations with our clients everywhere around the world about Ukraine right now," McWhorter said. "We're talking with clients in the US, Europe, Asia. We see a lot of interest everywhere, which is really exciting."
He said global business interest in the reconstruction first emerged in late 2022, about six to nine months after the full-scale invasion, but it then faded, until now.
"That's really when we started talking more about reconstruction, " he said. "That's when we started having a lot of interesting conversations with investors in central Europe and the US and the UK."
"Then, as the war went on, that died away. Now, in the last four or five months, we've started, having a lot more conversations around this. I think people are seeing some real possibility of this being over. People are more and more optimistic that there will be an end, that there may be a decent security situation, there will be ongoing support, and that there will be massive opportunity."
"Everyone sees the opportunities but they've waiting for that security situation to firm out before they'll before they step in and invest, outside of a handful of more bold people."
As always, email the editor, Adam Brown, at adam.brown@ukrainerebuildnews.com with any tips, comments, suggestions, story ideas, complaints, etc.
And now, on with the headlines ...
US and Russia start talks in Riyadh, without EU or Ukraine, on ending the war
US and Russian officials on Tuesday began negotiations in Saudi Arabia's capital of Riyadh with an aim of ending the war in Ukraine, without the participation of Ukraine and the EU.
Members of the US delegation include Secretary of State Marco Rubio, National Security Adviser Mike Waltz, and White House Middle East envoy Steve Witkoff. Russia is represented by Foreign Minister Sergei Lavrov and the Kremlin's foreign policy adviser Yuri Ushakov, multiple media outlets reported, including Reuters, the Financial Times, Bloomberg, CNN, and BBC.
At about 2 pm Riyadh time, a working lunch had started. Before that, the talks between the officials lasted more than three hours. Amid the negotiations, the Russian Foreign Ministry said Ukraine's NATO membership is unacceptable for Russia, Reuters reported.
The negotiations in Saudi Arabia might bring more clarity to a potential meeting between Russian President Vladimir Putin and US President Donald Trump, but there is no understanding on this issue yet, Kremlin spokesman Dmitry Peskov said on Tuesday, as quoted by Reuters.
Ukraine's President Volodymyr Zelensky said earlier that Kyiv was not invited to participate in the negotiations in Saudi Arabia. US President Donald Trump had said Zelensky will be involved in the talks.
In an interview with NBC published on Sunday, Zelensky stated he will "never accept any decisions between the United States and Russia about Ukraine."
Meanwhile, European leaders on Monday held an emergency summit in Paris to discuss Ukraine after being sidelined by the US.
"Today in Paris we reaffirmed that Ukraine deserves peace through strength. Peace respectful of its independence, territorial integrity, with strong security guarantees. Europe carries its full share of the military assistance to Ukraine," European Council President Antonio Costa wrote in a post on X following the meeting.
Ukraine signs free trade deal with UAE, expects growth in exports of metallurgical products, processed foods
Ukraine and the United Arab Emirates (UAE) on Monday signed a comprehensive free trade agreement covering goods, services, investments, and digital economy, among others, Ukraine's Economy Ministry said.
The so-called Comprehensive Economic Partnership Agreement (CEPA) provides Ukrainian goods full access to the UAE market for 96.6% of product lines.
"The implementation of the Agreement, which covers virtually the entire product range of bilateral trade, will increase the production and export of Ukrainian products by removing tariff barriers to trade between the two countries," Ukraine's Economy Minister Yulia Svyrydenko said following the signing of the deal in Abu Dhabi, as quoted by the ministry in a press release.
Ukrainian companies will benefit from easier access to markets in the UAE and other countries in the Gulf region, stable and predictable trade conditions, and elimination of barriers to exports and investments, according to the statement.
Ukrainian exports to the UAE are expected to grow in key sectors such as metallurgy, and the food industry, in particular flour milling and oil production, while exports of metals and vegetable oil are also expected to rise.
In addition, the UAE has removed the 49% foreign ownership cap for Ukraine, allowing Ukrainian entrepreneurs to set up companies with up to 70% foreign capital. In some sectors, the cap will gradually be eliminated entirely, the ministry said. This policy applies to industries like commercial services, construction, education, healthcare, and accounting.
The two sides also agreed to establish the Ukrainian-Emirati Investment Council to boost investment and eliminate business barriers. Additionally, an SME Committee will be formed to support entrepreneurs through training and advisory services.
Between January and November 2024, trade between Ukraine and the UAE reached $415 million. Ukrainian exports to the UAE totaled $266.8 million, while imports amounted to $148 million, as per the statement.
The UAE launched its CEPA program in 2021, aiming to sign economic partnership agreements with 26 countries. It has so far signed 24 deals with countries including India, Turkey, Israel, Indonesia, and Cambodia, among others, according to local media outlet The National.
IMF mission set to start work in Ukraine for 7th review of EFF loan program
An International Monetary Fund (IMF) mission is expected to start work in Ukraine in the coming days for the seventh review of the Extended Fund Facility (EFF) loan program, Ukraine's Finance Ministry said.
"We have successfully completed six program reviews and are working on meeting the conditions for the seventh review, which will result in the next tranche of about $917.5 million," Ukraine's Finance Minister Sergii Marchenko said on Monday, following a meeting with IMF Managing Director Kristalina Georgieva in AlUla, Saudi Arabia.
The IMF's EFF arrangement with Ukraine, which was approved by the IMF board in March 2023, totals $15.6 billion.
Through the six earlier EFF reviews, Ukraine has attracted to the state budget about $9.8 billion of the total. In 2025, Ukraine plans to attract $2.7 billion via the program through four quarterly reviews, the Finance Ministry said in a press release.
Allocations from the EFF arrangement are tied to Ukraine implementing numerous reform measures. To date, Ukraine has met 35 of the so-called structural benchmarks.
The ministry noted that Ukraine must meet the necessary conditions in the areas including strengthening financial stability, supporting economic recovery, improving the governance of state institutions, and Eurointegration, for the EFF program to continue in 2025.
Ukraine's government set to disburse €100 million to local budgets under third phase of recovery program
Ukraine's government said it has approved a procedure for the allocation of funds totaling €100 million to local budgets for the implementation of projects under the Ukraine Recovery Programme III.
The funding will target four priority areas including energy resilience of local communities, housing construction, modernization of water supply and sewerage and reconstruction of medical facilities.
The application process is now complete, and the regional military administrations are currently reviewing the submitted projects. The next step involves creating and approving ranking lists to identify the finalists who will receive funding, the government said in a press release on Monday.
The Ukraine Recovery Programme is a public investment reform initiative focused on rebuilding critical infrastructure and enhancing the quality of life in communities impacted by the war.
The previous two phases of the program have allowed for the implementation of 225 projects worth over €500 million, as per the statement.
Proposed contract would have given US 50% of Ukraine's revenue from resource extraction, Telegraph reports
A draft contract would give the United States 50% of Ukraine's recurring revenue from extraction of resources, and 50% of the financial value of “all new licences issued to third parties” for the future monetisation of resources, The Telegraph reported, citing a copy of the contract it has obtained.
The contact, which was rejected by Ukrainian President Volodymyr Zelensky, would have covered the “economic value associated with resources of Ukraine,” including “mineral resources, oil and gas resources, ports, other infrastructure (as agreed),” the newspaper said, citing a draft of the contract it said it has obtained.
The draft, marked “Privileged & Confidential" and dated Feb 7, 2025, also stipulated that Ukraine and the US form a form a joint investment fund to ensure that “hostile parties to the conflict do not benefit from the reconstruction of Ukraine,” according to the report.
"If this draft were accepted, Trump’s demands would amount to a higher share of Ukrainian GDP than reparations imposed on Germany at the Versailles Treaty, later whittled down at the London Conference in 1921, and by the Dawes Plan in 1924," The Telegraph said.
Zelensky said over the weekend that he directed his ministers not to sign off on a proposed rare earth minerals agreement with the US, saying the deal wasn't in Ukraine's best interest.
"I didn't let the ministers sign a relevant agreement because in my view it is not ready to protect us, our interest. For me is very important the connection between some kind of security guarantees and some kind of investment," Zelensky told The Associated Press on the sidelines of the Munich Security Conference in Germany.
The Telegraph: Ukraine giving up on West due to failed promises
Ukraine's faith in the West is weakening as less than half of Ukrainians believe that the US and the EU are doing enough to support the country amid the war with Russia, Michael Ashcroft, British businessman, pollster, and former deputy chairman of the Conservative Party, wrote in an op-ed for The Telegraph.
Ukrainians also don't have much confidence in the Western security guarantees that would be part of any negotiated settlement with Russia, and the failure of the 1994 Budapest Memorandum, in which the UK and the US promised security assurances in return for Ukraine giving up its nuclear weapons, shows they have good reasons for such a stance, Ashcroft noted.
Al Jazeera: Hedging is EU's only feasible option in relations with US
Hedging is the EU's only practicable path in the block's relations with the US after President Donald Trump bypassed Europeans in its dealings with Russian President Vladimir Putin over the Ukraine peace talks, Dimitar Bechev, senior fellow at Carnegie Europe, wrote in an op-ed for Al Jazeera.
Instead of seeking a complete break or the dissolution of NATO, hedging involves resisting and placing conditions on US actions as much as possible, Bechev explained. It can also mean pursuing an independent policy on matters like China, trade, or tech industry regulations without considering Washington's stance, he added.
Ukraine's infrastructure suffers damages of $170 billion amid war, KSE study finds
Damages to Ukraine's infrastructure due to the Russian full-scale invasion reached nearly $170 billion as of November 2024 and were 8% higher compared to an estimate from the beginning of 2024, a study conducted by the Kyiv School of Economics revealed.
Residential buildings suffered the most significant damage, totaling $60 billion, followed by transport infrastructure at $38.5 billion. The energy sector incurred $14.6 billion in damages, while losses to industry, services, and construction reached $14.4 billion, according to the study.
In addition, the agricultural sector and land resources sustained $10.3 billion in damages, while public sector facilities experienced a total damage of about $16.3 billion.
In absolute terms, the energy sector saw the most significant rise in damages when compared to the earlier estimate, increasing by $4.6 billion due to deliberate attacks on electricity generation and distribution, as per the study.
Notable new damages were also reported in transport infrastructure, social sectors, and enterprise assets. In relative terms, the highest growth rates were observed in administrative buildings (+60%), followed by the energy sector (+46%), healthcare (+32%), and culture, tourism, and sports (+29%).
Geographically, the frontline regions suffered the highest damages, with ten areas that were invaded or share a border with Russia or have access to the sea accounting for over 90% of the total damages, according to the study. Despite this, attacks continue on assets in other regions, with the Dnipropetrovsk region which occupies southern, eastern and central Ukraine also being heavily affected, the authors noted.
Social Media Posts
Guide to Investing in Construction Materials Sector
UkraineInvest, the state investment promotion agency, published a "comprehensive study on investment opportunities in the construction materials sector."
The study suggests that key growth opportunities in the construction materials sector exist in infrastructure modernization, implementation of energy-efficient technologies and "establishment of new production facilities near raw material bases."
Energy and Heat Supply Regulations
Yaroslav Petrov, head of the London office of the Ukrainian law firm Asters, published a post on the "groundbreaking changes to energy and heat supply regulations" signed into law earlier this month.
Highlighs include changes to capacity booking, extended technical conditions, mandatory advance payments, cable pooling & green auctions, plus temporary martial law provisions, Petrov said.
Guide to Firing Staff
The Ukraine office of CMS, the global law firm, promoted the newly published CMS Expert Guide to Dismissals and Termination of Employment, which includes a seven-page section on the law in Ukraine.
The Ukraine section covers reasons for dismissal, the dismissal of managing directors, the involvement of unions, notice periods, harassment and information on several other aspects of hiring and firing in Ukraine.
EC Ukraine Accession and Reconstruction Unit Visits Kyiv
Elena Visnar Malinovska, head of the Ukraine Accession and Reconstruction unit at the European Commission's Directorate General for Neighborhood and Enlargement (DG NEAR), recapped a visit to Kyiv. She said the first half focused on accession, including meetings with multiple authorities.
"The second half of my mission focused on Ukraine’s reconstruction. I had productive exchanges with key government partners ... and outlined upcoming steps, including support for Ukrainian MSMEs, the EU-Ukraine Business Summit, and the implementation of the Single Project Pipeline.
Digital Development Index
Valeriya Ionan, deputy minister for Eurointegration at the Ministry of Digital Transformation of Ukraine, promoted the newly published Regional Digital Transformation Index, which evaluates the digital development of Ukraine's regions.
The index measures institutional capacity, internet development, development of Administrative Service Centers (CNAPs), implementation of paperless mode, digital education, regional digital identity, penetration of basic e-services and more.
URN Daily: Sense Bank and Ukrgasbank for sale? And US seeks to cancel $4.7 billion of Ukraine's debt
