THE UKRAINIAN MONITOR NO. 3

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As part of the implementation of the Ukraine Reconstruction Service, a new project of WEI’s Center for Strategic Studies, we are monitoring the economic and social situation in eight regions of Western Ukraine on an ongoing basis. In particular, we are interested in investment needs, announced tenders for reconstruction and modernization of public and private infrastructure, as well as examples of Polish-Ukrainian economic cooperation. Stay tuned for updates on the reconstruction and modernization of western Ukraine.

 

Seminars promoting the participation of Polish business in the reconstruction of Ukraine organized by the WEI Center for Strategic Studies were held in Khmelnytskyi and Vinnitsa. On September 12 and 13, successive seminars were held on the development of Polish-Ukrainian economic cooperation, the participation of Polish companies in the process of rebuilding Ukraine, and available instruments to support such cooperation offered by Polish public institutions. The events were attended by the Director of the Office of the Plenipotentiary of the Government of the Republic of Poland for Polish-Ukrainian Development Cooperation Marcin Chruściel, the Consul General of the Republic of Poland in Vinnitsa Damian Ciarciński, representatives of PAIH, ZPP, representatives of regional and municipal authorities, and Polish and Ukrainian entrepreneurs. In particular, attention was paid to the solutions being introduced in Poland in the field of foreign investment and export credit insurance available under the amendment to the Law on the Export Credit Insurance Corporation (ECI).

 


 

Industrial investment as one of the engines of development in western Ukraine. Individual regional governments are setting up new administrative structures responsible for serving investors, with a special focus on foreign investors. In Lviv, the regional government has launched an Investor Service Office, whose duties will include supporting potential investors in preparing for the launch and implementation of municipal investments, including approvals and permits. In Vinnitsa, a Regional Office for International Cooperation has been established to coordinate international cooperation at the level of the entire Vinnitsa region and individual regions. The priority topic of the Bureau’s work will be the coordination of foreign aid flowing into the Vinnytsia region. The authorities of the Zhytomyr region have begun work on the Program for the Comprehensive Reconstruction of the Zhytomyr region for 2023-2030, the priorities of which will be the economic development of the region, the development of local self-government and measures for self-sufficiency. The preparation of the program will be preceded by the creation of an analysis of the needs and potential of the oblast, the author of which is to be selected in an open tender in October this year. The authorities of the Rivne region have also begun work on updating the regional development strategy. The document should take into account the challenges and opportunities associated with the consequences of the current armed conflict, as well as take into account the start of accession negotiations with the European Union. Particular emphasis is to be placed on creating conditions for the region’s economic development, attracting foreign investment, creating new jobs and facilitating the return of the region’s residents from abroad.

 


 

Foreign investment underpins Ukraine’s reconstruction and modernization. Monstano-Seeds, owned by the German conglomerate Bayer, has begun expanding its facilities in Poczujki (Zhytomyr region). The investment is valued at 60 million euros and will allow the expansion of seed production, primarily of corn. The German company Pfeifer&Langen, through its subsidiary “Radekhivsky Cukor,” plans to buy another sugar plant, this time in the Volyn region. The plant can process up to 6,000 tons of sugar beets per day. The purchase of the sugar plant depends on a positive decision by the Antimonopoly Committee of Ukraine, which has launched an investigation into the threat of excessive concentration on the sugar market. Also in the Volyn region, Nestlé-owned Volynholding has received a €42 million loan from the European Bank for Reconstruction and Development for the construction of a new pasta plant.

 


 

Foreign aid institutions are actively participating in the modernization of Ukrainian industry and supporting entrepreneurship. The Nordic Environmental Finance Corporation (NEFCO) is financing the modernization of three sewage pumping stations in Khmelnitsky. The project plans to rebuild the pumping stations and replace outdated equipment with energy-efficient and automated equipment. Khmelnitsky’s wastewater collection system has not undergone major renovations since its creation in the 1980s. The U.S. aid agency USAID plans to launch a program to support small and medium-sized entrepreneurs in Vinnitsa by financing the creation of new jobs, the purchase of modern production equipment, the acquisition of necessary certificates and quality certifications, as well as supporting the export potential of Ukrainian companies. A co-working space will be created in Ternopil for start-ups, along with a conference room and common spaces. The project is being implemented with funding from the German government.

A project to create a Ukraine-wide network of weather radars for agricultural purposes has begun in the Vinnytsia region. The use of weather radars will allow optimal planning of agricultural work, selection of crop mixtures and varieties, planning of fertilization of the fields, as well as planning of harvest logistics. Seven radar stations will be built as part of the project, allowing them to cover the entire territory of Ukraine. The project is funded by the Slovak Agency for International Development Cooperation (SlovakAID). The European Investment Bank is financing repair work on bridges on roads of state importance in the Ternopil region. Many of the structures being repaired have not undergone any modernization work since they were built in the 1980s. This is particularly true of the bridges on the Ternopil bypass and the bridge over the Stripa River on the M09 route from Ternopil, through Lviv to the Polish border in Rava Ruska. The repair work should be completed later this year.

 


 

The process of relocating production facilities from eastern areas threatened by direct hostilities to western Ukraine is underway. The VP “Rohansky” meat plant is moving its production from the Kharkiv region to Kivertsy in the Volyn region. The previous production facility was destroyed during Russian artillery shelling. One of Ukraine’s largest dairy companies, Molokiya and Moloko Vitchyzny, located in Sumy in eastern Ukraine, plans to build innovative farms for 4,000 cows in the Rivne region. The companies are negotiating with local authorities to acquire investment plots in the region. In the Chortkiv West industrial park (Ternopil region), construction has begun on an agricultural crop protection service center by Ukravit, which is Ukraine’s largest producer of crop protection products and micro-fertilizers. The Cherkasy-based company specializes in the production of pesticides, fertilizers with micronutrients, and rodent and household insect killers.

 


 

Cereal harvest in Ukraine. Cereal yields in 2023 will be higher than last year, despite a reduction in crop acreage by almost 2 million hectares. Overall, it is estimated that this year Ukrainian farmers will harvest 22 million tons of wheat (20.2 million tons in 2022 and 33 million tons in 2021), 5.8 million tons of barley (2022 5.8 million tons, 10.1 million tons in 2021), 28 million tons of corn (27.3 million tons in 2022, 37.6 million tons in 2021), 13.9 million tons of sunflower (11.1 million tons in 2022, 16.9 million tons in 2021). The canola and soybean harvests will be 4.1 and 4.8 million tons, respectively. According to experts, most of the crop is destined for export. Taking into account last year’s stored crop, Ukraine plans to export 16 million tons of wheat, 3 million tons of barley, 22 million tons of corn, 4 million tons of rapeseed, 3.3 million tons of soybeans and 13 million tons of sunflower oil. It should be recalled that only 30 percent of exports are made through Ukraine’s Black Sea ports.

 

 

We invite you to read the detailed information and analysis material of the Reconstruction Service of Ukraine on the project website: odbudowaukrainy.org.pl

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