Current news on Rebuild Ukraine topic

One type of insurance could become a long-term source of funding for Ukraine's economy.

Deputy Governor of the National Bank of Ukraine, Kateryna Rozhkova, believes that there is significant potential for the development of life insurance in Ukraine, which could provide long-term funds for the economy. Globally, the share of life insurance premiums to GDP is 2.7%, in developing countries, it is 1.6%, whereas in Ukraine, this figure is only 0.08%.

"In 2023, life insurance premiums accounted for about 41% of total insurance premiums worldwide, while in Ukraine, this figure was 11.1%," Rozhkova noted.

The NBU, together with market participants, is working on creating a future model for the life insurance market. Currently, this market in Ukraine is represented by only 12 companies that deal with various savings and risk products.

Savings insurance has low demand, and changes in this segment are possible only with the stabilization of the economy, the development of the capital market, and the improvement of citizens' welfare. Meanwhile, risk life insurance is gaining particular importance in the context of the war.

The Ministry of Economy of Ukraine has presented the first programs under the Ukraine Investment Framework (UIF) worth €1.4 billion, approved by the European Commission at the URC in Berlin.

The overview of the International Financial Organizations (IFOs) programs includes:

• €1.05 billion for guarantees to expand existing IFO programs.
• €289 million for blended finance and grants.
• €55.5 million for technical assistance to finalize investment projects and submit funding applications.

The first-stage programs are aimed at supporting the recovery and reconstruction of Ukraine in the following sectors:

1. Energy:

- Development and modernization of energy infrastructure.

- Investments in renewable energy projects.

2. Infrastructure:

- Restoration and construction of transport systems, roads, and bridges.

- Reconstruction of residential and commercial buildings.

3. Support for Small and Medium-sized Enterprises (SMEs):

- Providing financial support for entrepreneurship development.

- Creating programs to enhance SME competitiveness.

Private and public companies, as well as municipalities, will be able to receive funding either directly from IFOs or through local partner banks. The Ministry of Economy is also working on launching a Project Preparation Facility to increase the number of projects ready for financing, as many still have an insufficient degree of readiness.

Foreign investors entering Ukraine's reconstruction market will bring their specialists, leading to increased project costs.

The Ukrainian construction industry is suffering from a shortage of personnel, prompting developers to raise wages. Experts note: “Regarding the involvement of migrants, this practice was and is present, but with the onset of the war, it has significantly decreased and is not currently widespread. However, companies are considering the possibility of attracting migrants from neighboring countries as well as from more distant Asian and African countries.”

Meanwhile, the Ukrainian Union of Industrialists and Entrepreneurs highlights that large foreign companies entering Ukraine's reconstruction market will bring some of their specialists. This will increase the cost of such projects.

“Therefore, it is necessary to approach each project individually – first and foremost, considering the source of financing. If a significant portion of the funds comes from the state budget, we definitely advocate for the creation of jobs for our citizens. If the majority of financing comes from investors, funds, etc., then the involvement of their specialists may be justified,” noted Anatoliy Kinakh, president of the union.

Ukraine continues to profit from privatization: the Land Management Institute was sold for 18 times its initial price to the owner of an amber business, and an oil company is next in line.

The State Property Fund held an auction for the privatization of the Rivne Scientific-Research and Design Institute of Land Management, an office building in the city center. The winning bid came from a consulting company, with the price rising over 18 times from ₴3.5 million ($86,210) to ₴65 million ($1.6 million).

Meanwhile, the State Property Fund has completed the registration of state ownership of the oil company "Alliance-Ukraine," which is being prepared for sale. The assets of the oil trader are valued at over ₴450 million.

The nationalized company was transferred to the State Property Fund following a decision by the High Anti-Corruption Court in April.

This same decision granted the Fund a 49% stake in the company "Alliance Holding," with the remaining 51% owned by Shell. The Fund's team is currently clearing the nationalized stake and registering state ownership.

Ukraine will additionally spend ₴759 million to strengthen the stability of the energy system, and one of the largest cement producers will invest $15 million in its own energy supply.

The government approved the procedure for using funds from the State Fund for decarbonization and energy-efficient transformation. This is an additional program for energy efficiency and strengthening the stability of Ukraine's energy system by ₴759 million. The funds will primarily be used to reduce loan rates for the implementation of energy efficiency projects and the installation of alternative energy sources.

As the head of the State Energy Supervision Inspection Ruslan Slobodian noted on the air of the telethon, TPPs damaged by Russian shelling in Ukraine are being repaired around the clock. The total capacity of the damaged facilities exceeded 9 GW. He added that at the same time, development of distributed generation is underway in Ukraine. In particular, solar energy helps to overcome the deficit.

At the same time, Concorde Capital, co-owner of the Kryvyi Rih Cement Plant, is investing $15 million in a 24 MW power plant, which should make Kryvyi Rih Cement, one of the largest cement producers in Ukraine, independent of external energy supply. The investment company also plans to build 40 MW of storage capacity.