The Business Week for the week of March 30 – April 5, 2020

The Business Week for the week of March 30 – April 5, 2020


The Ukrainian parliament has lifted a moratorium on agricultural land that has been in place for almost two decades, as it passed a bill on March 30 that will launch Ukraine’s farmland market starting on July 1, 2021. The bill limits sales to 100 hectares per buyer and only Ukrainian citizens can acquire farmland. Starting from January 2024, legal entities registered in Ukraine will be allowed to buy up to 10,000 hectares of farmland considering that their shareholders own Ukrainian citizenship. Foreigners and companies with foreign capital will not be allowed to purchase land until the restriction may be lifted once a nationwide referendum takes place. Lifting the land moratorium has been a longtime requirement for Ukraine to receive billions in financial aid from the International Monetary Fund. Once Ukraine fully opens the land market – both to Ukrainians and foreigners – experts expect billions of dollars to flow into the country annually. 

Ukraine’s agro-sector increases its grain harvest forecast to 94 million tons

Ukraine’s agriculture sector continues to impress, as the Ukrainian Grain Association forecasts Ukraine’s grain and oilseeds harvest to go up to 94 million tons in the 2020/2021 marketing year. Additionally, the association predicts that grain and oilseed exports for next season will be at 57.2 million tons, which is more than previously expected. According to the Ukrainian Agribusiness Club, since the beginning of 2020, Ukraine’s agricultural exports reached $3.7 billion, or 8% percent up year-over-year. The main export growth was due to sunflower (+$179 million), rapeseed (+$25 million), and soybean (+$17 million) oils. In January-February 2020, agricultural products made up 46% of Ukraine’s total exports and only 12% of its total imports. Last year Ukraine was the third largest agricultural exporter to the European Union as it exported €7.3 billion worth of agricultural products, according to a monitoring report by the European Commission.


Ukrainian Parliament passed at first reading the banking sector bill

Ukraine’s parliament, the Verkhovna Rada, approved at first reading a bill on banking regulations that should prohibit the return of nationalized banks to former owners as well as the return of bankrupt banks back to the market. The bill also envisages a procedure of compensation for lost profits from the previous owners if the liquidation or nationalization was declared illegal. Such a step should bring more transparency, economic stability as well as increased reliability of Ukraine’s banking sector. The bill has been one of the main requirements of the International Monetary Fund in order for Ukraine to receive billions of dollars in financial aid as the country is battling with the COVID-19 global crisis. Ukraine’s banking sector has been one of the most reformed sectors in Ukraine since 2014. The National Bank of Ukraine liquidated more than 90 toxic banks and made the sector significantly more transparent than it ever was in the country’s history since independence. 

NBU exchanges $241 million in dollar bills for non-cash currency and buys $34 million

The National Bank of Ukraine continues to implement measures in order to soften the COVID-19 burden on the financial sector. On April 2, the central bank swapped $241.5 million in dollar bills for non-cash currency at 11 banks. Previously, the bank had two swaps in dollar bills for non-cash currency totaling $310 million. Altogether, this is the central bank’s fifth swap operation of bills for non-cash currency. The same day, the NBU also bought $34 million on the interbank foreign exchange market. An additional $64 million were bought on March 31. 

Central Bank transfers UAH 43 billion to the state budget

The National Bank of Ukraine has transferred UAH 42.72 billion ($1.55 billion) in banking profits to the state budget on April 1. The transfer was completed earlier than previously planned and an additional UAH 2 billion was transferred than what was originally expected. This year the Central Bank decided to transfer its entire profit to the state budget in order to help the government as it is dealing with the spread of the COVID-19. 


Ukrainian startups Preply and Allset raise millions of dollars in funding

Ukrainian startup Preply, an international online education platform, has recently closed a 10-million-dollar round of funding. In addition, another Ukrainian startup called Allset raised an $8.25 million Series B. The round was led by the European Bank for Reconstruction and Development with Andreessen Horowitz, Greycroft, SMRK VC Fund and Inovo Venture Partners participating. With the new round, the food pre-ordering service platform now stands at $16.6 million in total funding. For Preply, the lead investor was London-based venture capital firm Hoxton Ventures. So far, the total amount of funds raised by Preply exceeds $15 million. The funding is expected to improve the startup’s position in North America and Western Europe. Ukraine’s IT market is one of the most developed in the world and has brought billions of dollars to the country’s economy every year. 


Ukraine’s IT sector takes the lead with innovative ways to combat COVID-19

All over Ukraine, various IT clusters are uniting in their efforts to fight the spread of the COVID-19 virus within their local communities, writes Tech Ukraine. For example, Kharkiv IT Cluster has launched a project called IT4Life, which is meant to analyze hospital needs, raise funds and initiate partnerships to purchase medical equipment and goods. So far the project has raised almost UAH 4 million. Another example is Lviv IT Cluster, which launched the COVID-19 Emergency Project aimed at helping citizens who tested positive in Lviv Oblast, mobilizing efforts of local authorities with the IT community and emergency operation centers, as well as raising money that will be redirected to stop the spread of the virus. Additionally, the IТ Dnipro Community cluster is helping local medical personnel to fight the virus by such means as purchasing goods for the safety of doctors and supplying hospitals with the necessary equipment. 

More companies pledge to participate in Ukraine’s battles against coronavirus

As part of their corporate social responsibility, more companies in Ukraine are helping out the country to withstand the spread of the COVID-19 virus. Silpo, a supermarket chain, has allocated UAH 100 million to buy medical and personal protective equipment for medical personnel in Ukraine, whereas state-owned PrivatBank has purchased 28 ventilators. Vodafone Ukraine said that it donated $1 million and purchased four lung ventilators as well. Another supermarket chain called Epicenter has donated more than $5 million to the cause. Ukraine’s postal service giant Nova Poshta has paid for the production of 2,000 special protective suits for doctors from Chernivtsi and allocated UAH 25 million for the purchase of medical equipment and goods for medical institutions in Ukraine.


Western Ukrainian businesses receive additional funding from EBRD and EU

Ukraine’s largest foreign investor, the European Bank for Reconstruction and Development, has launched additional funding for Ukrainian businesses in the country’s western regions. Small and medium-sized enterprises in western Ukraine will benefit from a new loan of up to €7.5 million through Bank Lviv, states EBRD. “The loan will be available for disbursement in Ukrainian hryvnia, which will protect Bank Lviv’s borrowers from foreign currency-related risks, and offer long maturities,” the press release reads. The funds are provided in the context of the Deep and Comprehensive Free Trade Agreement between the European Union and Ukraine. Earlier in March, the bank provided a senior loan of up to €15 million to OTP Leasing to help SMEs across the country to continue with their business activities. To date, the EBRD has committed more than €14.54 billion in over 460 projects to the country.