INVEST Ukraine Open for U
Yuliya Kovaliv Berlin 2015
Ukraine’s potential as manufacturing base 1
Low cost production platform
2
Proximity to key markets and visa free travel
3
Highly skilled human capital
4
Robust infrastructure for sustaining an export-oriented economy
5
Сore competences in aerospace, energy, transport, agricultural machine building
6
More than 30 large enterprises with foreign capital are exporting to the EU market from Ukraine, seizing the advantages that Ukraine has to offer
Industrial cooperation More than 300 state owned entities subject to privatization - largest privatization in years
Ukraine has a large industrial base with unique potential in aerospace, power, transport and agri engineering
German businesses can play an important role in the modernization of Ukraine’s economy
Ukrainian companies are ready to partner with German leading companies integrated in the global supply chains Today automotive components are the export from Ukraine to Germany DCFTA supports such partnerships and investment in the manufacturing sector
Elimination of import tariffs on semi-finished and finished goods produced in Ukraine
Gradual alignment to EU standards
#1
Program for replacement of the Russian origin products in industrial and defence sectors Cooperation with Ukraine National Industrial Champions (Antonov aviation, Turboatom – Electrovazhmash energy machine building, Zorya-MachprojectSumi NPO Frunze – gas turbines etc.)
Investments, technology and expertise in agri machinery building
Energy sector: Challenges
Extremely high energy intensity of GDP
Only 60% of energy resources produced domestically
Households:
Household gas bills didn’t reflect modern reality Part of utility bills based on normative, rather than actual consumption
Energy intensity of GDP, 2014 0,35 0,30 0,25 0,20 0,15 0,10 0,05 0,00
0,32 0,20 0,11
Germany Romania
0,13
Poland
China
Ukraine
Drivers of inefficiency
Industry and infrastructure:
0,13
Obsolete equipment and technology
High losses in power lines, hot water and central heating
Households
Industry
Infrastructure
Gas tariffs increased to cut out waste and eliminate pressure on state finances Household gas tariff evolution (UAH/m3) 8
Natural Gas Consumption For Heating (bcm) 25
3,6/7,19
7
19.8 20
6 15
5 4
17.5
0,65
7,20
0,51
6,20
2 0,73
1,18
5
0 2010-Apr 2014
2014-Mar 2015
from Apr 2015
Public entities Heat-generating
10
3 1
-12%
Households
11,90
10,80
Heating season 2013/2014
Heating season 2014/2015
0
Power generation and transmission
Market-based tariff schedule till 2017 adopted
New Electricity Market Law
Seeking competition and diversification
Power generation structure by source* 39,43%
Coal & Gas
Privatization of regional power generation plants in 2016 (incl. Centrenergo 7,67 GWt)
Potential projects:
48,15%
7M2014
5,66%
7M2015
Renewables
Reconstruction of Northern and Dnipro Energy transmission system (€150m KFW loan) Construction of 6 Dnister hydropower stations with total capacity of 390 MWt
Construction of Kaniv hydropower plant
Hydro
45,24% 54,77%
Nuclear 7
Renewables
11% of our energy mix by 2020 One of the highest green tariffs in Europe, fixed in €
Local component removed this year Biomass capacity estimated at 26m ton p/a
High potential of bioethanol and biogas
Average biomass green tariff, eurocent/kWh 14
12,40
12
10,00
10 8 6 4
3,80
2 0 Poland
Germany
Ukraine
Renewables
Potential projects worth €16 bln
Plants for pellet production in Ukraine
Boilers production on biofuel
Biomass
Hydro
Sources
New generation bioethanol plants
Cogeneration on renewable sources
Waste recycling plants
Wind
Solar
LAYING THE GROUNDWORK FOR INVESTMENT Large number of issues in the Ukrainian industrial sector being solved Successful reform in the crucial gas sector Beginning of reform in power generation market Huge investment projects in energy transmission system Opportunities in renewables sector