Among the EBRD’s decisions included a 135 million euro grant to fund the shelter and waste storage at the site, as well as a pledge to invest at least 1 billion euro into the Ukrainian economy annually.
While investors and bankers celebrated the decade since they last met in Kyiv, during which Ukraine made enormous strides in economic progress, they also expressed concern for Ukraine’s future, given its inflation rate, government corruption and lack of political consensus.
“There was probably $100 million of investment 10 years ago, and it was coming from Cyprus and going back,” Olivier Descamps, an EBRD business group director, said at the May 19 Ukraine country presentation and discussion. “I think in the last three years, we had 50 percent of the total foreign direct investment of the last 10 years coming to Ukraine.”
Bankers and investors spent the two days networking, attending country presentations and discussions on topics such as corporate social responsibility and EURO 2012, as well as attending receptions, including an extravagant closing ceremony hosted by President Viktor Yushchenko.
Some of Ukraine’s biggest businessmen and investors attended the weekend meeting and business forum, including megamillionaire banker Serhiy Tyhypko, billionaire industrial magnate Kostiantyn Zhevago, and equity investment fund manager Michael Bleyzer.
The Ukraine country presentation was among the twoday meeting’s highlights, at which Ukraine’s most successful investors discussed Ukraine’s challenges and potential.
Bureaucratic interference, a holdover of the Soviet system, is still preventing Ukraine from reaching its full economic potential, said Narenda Chaudhary, chief executive officer for Arcelor Mittal S.A. in Ukraine, which acquired the Kryvorizhstal steel plant in 2005.
“I have never seen so much bureaucratic intervention in any country,” Chaudhary said, pointing out that he worked in five different countries on three continents.
He recalled enduring 457 inspections in the first half of 2006.
“You can imagine the waste of human resources,” he said.
Nevertheless, Arcelor Mittal made a “wise investment” in Ukraine, he said.
Tycoon Kostiantyn Zhevago, who made his fortune in Ukraine, offered an optimistic perspective on the country.
Unstable politics make investing difficult, but not impossible, Zhevago said, adding that he didn’t see many hurdles in doing business in Ukraine.
Zhevago controls Ferrexpo, which controls iron ore reserves in the Poltava region and was the first Ukrainian company listed on the London Stock Exchange.
“The quality of democracy is the most immediate problem that can be improved if there is political will,” Zhevago said. “We need more stability, but there is no doubt that it will happen. It is just a matter of when.”
Another Ukraine success story is Michael Bleyzer, founder and president of SigmaBleyzer, the largest private equity investment firm in Ukraine.
“If you understand the difficulties of investing in Ukraine, it is a wonderful country to invest in,” said Bleyzer, who was born in Kharkiv, raised in the US and launched his first Ukraine growth fund in 1996.
To succeed, Ukraine needs to broaden beyond strategic investors and those who carry out infrastructure investment, he said.
“Ukraine desperately needs broadbased foreign direct investment in all sectors,” Bleyzer said.
With regard to infrastructure investment, the EBRD will remain Ukraine’s most active player.
The 135 million euro investment announced May 19 will go towards constructing the New Safe Confinement, the structure to be built over Chornobyl’s fourth reactor, which exploded.
The funds will also be invested in completing the second interim storage facility to handle spent fuel from the other three reactors.
Contractors are currently working on the design and technical details of both the New Safe Confinement and the storage facility, and final designs are expected in spring 2009.
The New Safe Confinement will be built onsite and eventually slid over the reactor on rails. It will be 257 meters wide, 105 meters high and 150 meters in length.
At the meeting’s opening ceremony, Prime Minister Yulia Tymoshenko said much of Ukraine’s economic growth was the result of the EBRD’s commitment to Ukraine. “The EBRD is the most powerful investor in the country and we are one of its most desirable clients,” she said.
Striking a similar tone and pointing to Ukraine’s recent WTO accession and rise in foreign direct investment, Ukrainian President Viktor Yushchenko said “progress is irreversible” and thanked the EBRD for organizing their annual meeting in the city.
“Its decision to hold a meeting in Kyiv for a second time is a validation of the reforms and democratic changes, and the progress of the judiciary in Ukraine,” he said.
Source: Kyiv Post