Presentation for Meeting with Donors March 2019

Page 1

Donor Coordination Conference


Sold more than USD 500 000 000


Awards & Recognition

Anti-corruption startup award from Citigroup

Citi T4I Challenge Technology was featured in

C5 Accelerate and USA Institute of Peace

The Shield in the Cloud Innovation Challenge


Donors & Partners


Some numbers and facts UAH 14b in revenue 10k bidders 200k lots created Over 40 marketplaces connected and authorized Successfully launched the Small Privatization reform State Entity PROZORRO.SALE established independent Supervisory Board


Supervisory Board ● Maksym Nefodov ○ 1st Deputy to Minister of Economic Trade and Development

● Ilya Mikhaylov ○ Deputy to Head of Deposit Guarantee Fund

● Nadiia Vasylieva ● Dmytro Krepak ● Dmytro Sennichenko


Recognition

“I was very impressed”, “...a major public institution in Ukraine taking the right steps to make sure that its auctions should be designed so as to serve the interests of the public, rather than just a few well-connected individuals.”

– Roger Myerson, 2007 Nobel Prize Winner on seeing the Prozorro.Sale system


Our current streams Small Privatization

Property leases

Land lease rights

Over UAH 800m in income and an average 75% starting price increase, up to 100 participants per auction

Almost UAH 10m in income and an average of 25% starting price increase

Currently in pilot mode – UAH 1m in income so far

Railway car rental

Non Performing Loans

Ukrainian Railways has seen a 115% starting price increase on over 150 successful auctions

Revenue of UAH 12.5b through the Deposit Guarantee Fund


What’s in the works

Insolvency Procedure

Renewable Energy

Land Lease

Fossil Fuels and Minerals

Timber Auctions Property Leases State Owned Banks NPLs

Commercial Sales


Why does Prozorro.Sale give you the best value for your money ● Our track record includes developing a reform from start to finish - we know what it takes ● Transparency is at the core of our mission – most industries / sectors can benefit ● We are the swiss army knife for reforms!


Sustainable in the Long Term ● System self-supports itself, so why aren’t we financing everything from our commission income? ● Government does not have free capital ● Rapid response to reform opportunities required



Small and Medium-Sized Enterprises

> 370 Private Entrepreneurs won auctions worth UAH 80m in total Small Scale Privatization > 500 auctions with selling price between UAH 1m - 4m


Prozorro.Sale Regional Impact

>2359

35%

successful public auctions

average starting price increase

195

24

>1.9b uah

towns

regions

in income


State Owned Banks ● 5 State Owned Banks with UAH 200b worth of Non Performing Loans not part of Deposit Guarantee Fund ● Need to lobby for a law allowing DGF to deal with NPLs of State Owned Banks ● Timeline: 2019-2020


Insolvency Procedure Auctions

● Law voted on, need support for by-laws lobbying ● Lots of parallels with Small Privatization reform, our expertise can be used effectively here ● Estimated market size: UAH 10-20b p.a. ● Timeline: end of 2019


Renewable Energy ● Act reviewed by the Fuel and Energy Committee in Verhovna Rada! ● Will have to be implemented within 3 months ● Current fixed tariffs are harmful for the economy and stall innovation and development ● Estimated market size: UAH 10b p.a.


Public Property Leases ● Act is prepared by the Cabinet of Ministers, need support with lobbying ● Estimated market size: UAH 2-2.5b p.a. or 16m sq.m. ● Pilot currently underway - 42 SOE’s in 20 cities ● Timeline: 2019-2020


According to Survey at the World Bank Reform Conference:

Anti Corruption ranks 2nd, and Land Reform 3rd when asked about what are the most important policy reforms to raise Ukraine’s economic growth

– when asked about what are the most important policy reforms to raise Ukraine’s economic growth


Land Lease ● Pilot underway ● Market size: approx. UAH 300m ● Lobbying for DerzhGeoCadastr and land market reform ● Timeline: 2019-2020


Infrastructure Improvement Migration from a cloud ● Mandatory Certificate of Comprehensive Information Security ● Critical for long term sustainability of the project ETS Upgrades ● Currently running on legacy technologies ● Large volumes of transactions and information ● Upholding positive image - stability and reliability must be guaranteed


EVERYONE LOVES MONEY AND CATS


Current Donor Engagements ● EUACI – active agreement + preliminary 2020 ● EBRD - operational financing agreement ● GiZ GmbH - donor agreement ● World Bank - memorandum ● EDGE - donor programme ● Institute for War & Peace Reporting - subgrant agreement


What’s in the Works / Development Cost 2019 - 2020 Migration

USD 1m

Total

ETS Upgrades

USD 500k

USD 2.2m

New Auction Types

USD 700k

Small Scale Privatization Ukrainian Railway Timber / Wood Sales Renewable Energy Land Leases Bankruptcy


Stream Development Costs 2019-2020 Software Development

Marketing

Human Capital

Research / White Paper

Regional Development

Small Scale Privatization

25k

20k

5k

-

15k

65k

Ukrainian Railway

60k

10k

10k

15k

10k

105k

Timber Auctions

50k

5k

10k

15k

10k

90k

Renewable Energy

100k

15k

10k

15k

-

140k

Land Leases

60k

30k

30k

10k

40k

170k

Bankruptcy

100k

15k

15k

-

-

130k

Total

395k

95k

80k

55k

75k

700k

IN USD


Stream Development and Lobbying ● Continued research into new streams ● Lobbying for streams that we go ahead with ● As we’ve shown we are a practical vehicle for reforms, if you cannot support us monetarily – help us with lobbying!


Timber Auctions

● Estimated market size: UAH 7b p.a. ● Draft of postanova (CMU Decree) is ready ● Requires extensive promotion and lobbying ● Important for Ukraine’s integration into Europe


Fossil Fuels and Minerals ● Pilot project - first auctions in March 2019 ● Will be monitored closely as international mining players will be allowed to engage in bidding ● Ideally, all fossil fuels and minerals rights go through the Prozorro.Sale system ● Estimated market size: UAH 600m p.a.


Ukrainian Institute for the Future Report “Railway carriages must be distributed through the Prozorro.Sale system in order to fully optimize their usage”

– when talking about the importance of the railway system in regards to the Ukrainian Economy


Ukrainian Railways ● Railway carriage leasing rights ● Sale of older carriages – decreasing railtrack congestion ● Pilot underway - great results already ● Estimated market size: UAH 500-600m p.a. ● Will require a new auction type


ETS and Web-Portal Optimization ● Business Intelligence unit improvement and customisation ● Web-portal scaling and optimization ● Tailored solutions for complex billing and electronic document exchange ● Infrastructural software & hardware Upgrades


Marketing ● Social Media presence ● Events and seminars ● Information materials ● Continued promotion of Small Privatization paid off – applicable to other streams


Human Capital / Research

● Additional human capital for stream development ● Cooperation and support of activists ● New markets / auction types / procedures


Regional Development ● Parking lots ● Kiosks

● Billboards ● Fairs

● Whole range of products implemented in various cities - need help with promoting this to every city! ● We provide NGOs with a mechanism for control of local authorities


Do you have any questions?

Contacts: Chief Executive Officer oleksii.sobolev@prozorro.sale Chief Finance Officer sergiy.boote@prozorro.sale Donor Coordinator rami.sarayrekh@prozorro.sale


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