The Business Week for the week of April 20 – 26, 2020

The Business Week for the week of April 20 – 26, 2020


On April 22, the Government of Ukraine extended the quarantine until May 11 as the Covid-19 peak is expected in two weeks. Restrictions on public transportation, ban of gatherings of over two people as well as the requirement to wear face masks in public places remain valid.


In 2019 the total volume of venture investments into Ukrainian IT companies reached $510 million

UVCA – Ukrainian Venture Capital and Private Equity Association released an overview of the investments into Ukrainian IT companies in 2019. The figures showed a steady market growth:
▪️The volume of venture investments into Ukrainian IT companies showed an increase and reached the half-billion mark in 2019 ($510 million), it’s 1.5 times more than the previous year
▪️The number of deals in 2019 remained almost the same, 111 deals compared to 115 in 2018
▪️Increase by 18 times in M&A transactions. In 2019, 15 M&A deals reached $469 million, while seven transactions in 2018 worth $25.2 million
▪️Increase by 7 times in angel investments amounted $6.1 million compared to $0.9 million in 2018
▪️90% of the attracted investments were inflow from the USA
“Ukraine is strengthening its positions at the global tech arena every year by increasing the volume of investments attracted around the world and becoming home for unicorns and R&D hub for foreign companies,” – reads the report.


Ukrainian-American company EOS Data Analytics with the office and R&D center in Dnipro joined the business initiatives to help fight negative consequences of COVID-19 pandemic. The farmers are able to monitor their crops from home as the company has opened free access to its digital satellite-based platform that monitors crops conditions remotely. The system notifies its users of critical changes in vegetation, sends real-time weather risks alerts, and automates the prioritization process within fieldwork planning tasks. Free access is available till April 30.

Ukraine remains among the world’s top exporters of grain

Ukraine’s grain exports reached a record 49 million tonnes so far in the 2019/20 season that began last July. Compared to the previous marketing year it’s a 20% increase, reports Ministry for Development of Economy, Trade and Agriculture. The exported volume included 18.5 million tonnes of wheat, 25.2 million tonnes of corn and 4.5 million tonnes of barley. In 2019 Ukraine harvested a record 75 million tonnes of grain, compared to 70 million in 2018. 


The National Bank of Ukraine cuts the key policy rate to 8% per annum

The National Bank of Ukraine has decided to cut the key policy rate to 8% per annum. The NBU continues its monetary policy easing to support the economy during the quarantine period and pandemic outbreak. In March-April, inflation was 2.3% yoy, which is lower than expected. NBU assumes the inflation will remain low in April but will accelerate moderately to reach 6% at the end of 2020, still remaining within the target range. The Central Bank expects to cut the key policy rate to 7% by the end of 2020. “A gradual lifting of quarantine restrictions will allow the economy to recover in H2 2020. Loose fiscal and monetary policies will contribute to economic recovery. An increase in budgetary spending by the government to overcome the crisis, along with the NBU’s actions to support the banking system, will mitigate the negative impact the pandemic has on the economy,” – reads the report.

European Union will allocate EUR 1.2 billion macro-financial assistance to support Ukraine’s economy

The European Commission announced a decision to allocate EUR 1.2 billion macro-financial assistance to help Ukraine fight the economic consequences of the COVID-19 outbreak. The EU funds will help guarantee Ukraine’s macroeconomic stability and mitigate the negative effects of the pandemic. The amount of EUR 1.2 billion will be provided in two tranches. The first EUR 600 million will be allocated without any additional conditions once approved by the EU Parliament and the European Council. Earlier this month, the European Commission decided to allocate a EUR 190 million aid package to Ukraine aimed at supporting the healthcare syst


Ukraine is on the way to increase its river potential

The Ukrainian Parliament passed in the first reading the Bill “On Inland Water Transport” No. 1182-1-d. The bill seeks to refocus some of the freight traffic from roads and railways to inland water transport. In particular, the volume of river transportation is expected to increase to 30 million tons per year. Additionally, the bill envisages stimulation of shipbuilding, bringing Ukrainian enterprises back into operation and creating new jobs; liberalization of the market and international trade by opening the access for the vessels registered under the foreign flag; development of the E-40 waterway between Ukraine and Belarus, which can handle an additional 7 million tons of cargo per year; deregulation of the industry by introducing free passage through locks and partial exemption of seaport taxes for the inland navigation vessels; simplification of the administrative procedures when registering vessels and issuing qualification documents; implementation of the European standards and attraction of new foreign investment.

In 1Q 2020, sea trade port Yuzhny reached an ultimate cargo freight record 

Despite the quarantine and COVID-19 pandemic, Ukrainian ports are confidently increasing its cargo handling capacities as well as modernizing its operations.  Since the beginning of 2020, port Yuzhny reached a historic record in cargo freight. The port has handled over 4,6 million tonnes of cargo, a 50% increase compared to the same period the previous year. In the 1Q of 2020, the net profit of the port increased by 347% and reached UAH 209,5 million. Altogether, the port reached 53.9 million tons of cargo in 2019, a 26.1% increase compared to the previous year.


Naftogaz and Expert Petroleum to cooperate in hydrocarbon production on fields in Western Ukraine

Naftogaz attracted Expert Petroleum through the open tender to increase hydrocarbon production on fields of JSC Ukrgasvydobuvannya in Western Ukraine. The company will invest around UAH 1 billion into intensification, drilling and development of infrastructure in the first 5 years of cooperation and, potentially, make additional investments after. According to Naftogaz, the partnership between Naftogaz and Expert Petroleum will generate at least an additional 300 million cubic meters of gas within 5 years from 13 small fields in Western Ukraine. The intensification of work, increase in taxes and other budgetary contributions of the partnership will help to accumulate more than UAH 4 billion in Ukraine’s GDP and Lviv region in particular, calculated Expert Petroleum.