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TRANSCRIPT
INVESTMENT POTENTIAL OF LVIV REGION
EMERGING MARKET
AS ANSWER TO WORLD RECESSION
UKRAINIAN INVESTMENT SUMMIT
March 10th 2009
MYKOLA KMIT’HEAD OF LVIV REGIONAL STATE ADMINISTRATION
WHY LVIV REGION?
COMPETITIVENESS OF THE REGION
A BRIDGE BETWEEN THE EU AND UKRAINE
•• For the EUFor the EU –– access to significantaccess to significantmarketmarket::–– 2.52.5 millionmillion consumers – Lviv
region–– 1212 millionmillion consumers – Western
Ukraine–– 4747 millionmillion consumers – Ukraine
•• Extensive goods turnover with EuropeExtensive goods turnover with Europe::– Export – 998,5998,5 millionmillion US dollars (in
2008) – Import – 2,62,6 billionbillion US dollars (in
2008)
•• Lviv regionLviv region –– transit transit border territoryborder territory: : – Key airport for all
Western Ukraine– International carriers:
Wizz Air, LOT, Austrian Airlines
– Lviv – 7070 km to the EU border
–– 400400 km to Warsaw –– 630630 km to Budapest–– 720720 km to Vienna– Border with Poland
stretches for – 278278km
–– 77 border crossings
LESS EFFECTED BY CRISIS
•• European economy structureEuropean economy structure– Small business
•• 87%87% in real numbers, 75%75% in tax earnings– Business growth
•• 25,5%25,5% in 2008 (almost 15 15 thousandthousand of new entrepreneurs)
•• Less effected by economic crisisLess effected by economic crisis– 2008:
• Industrial production – increase of 0,8%0,8% while the Ukrainian-wide decrease is up to 3,1%
• Official unemployment level 2,7%2,7%, while Ukrainian-wide it is 3% – 2009 outlook:
• Decline in industrial production by 15%15%, but• Increase in gross agricultural production to 4,467 billion UAH (1,7%1,7%)
Lviv region is rated Lviv region is rated 44thth competitive region among competitive region among other Ukrainian regionsother Ukrainian regions
– (Ukraine Competitiveness Report, World economic forum, 2008)
•• RationaleRationale::– Intellectual potential and qualified workforce
• Rated 22nd nd by the quality of education in Ukraine(Ukraine Competitiveness Report, World Economic Forum, 2008)
•• 2525 universities and academies, 110 110 thousandthousandstudents: every 55th th person in Lviv is a student
• Ivan Franko Lviv National University – one of the oldest in Europe (est. 16611661)
– Innovations and IT•• 15%15% innovation-rich industrial enterprises• Lviv is one of 3030 most promising cities in the
world for IT development (KPMG research) • More than 100100 companies and 5 thousand5 thousand
persons are involved in IT•• 10001000 students graduate from National
University “Lvivska Politechnika” annually– Competitive labour costs
• Average wages:– Almost 3030 times less than in France–– 66 times less than in Poland.
COMPETITIVENESS
COMPETITIVE LABOUR COSTS
Average wages, Euro per hour
CENTRE FOR CULTURE AND RECREATION
Resort and recreation area attractive for investorsResort and recreation area attractive for investors–– Cultural monumentsCultural monuments
•• 50%50% UNESCO heritage of Ukraine•• 25%25% of all Ukrainian historic and architectural
monuments of ХІІ-ХХ centuries• Lviv first mentioned in history in 12561256
–– Nature recreationNature recreation• Balneology: 7 of 87 of 8 world famous mineral waters
(Truskavets, Morshyn, Skhidnytsya)• Carpathian mountains: a range of mountain resorts
–– Tourist flow Tourist flow •• 2.5 2.5 millionmillion in 2008•• 40%40% more than in 2007
–– 10% of potential used.10% of potential used.
HIGH FINANCIAL STABILITY
•• LvivLviv –– the only regional centre of Ukraine, the only regional centre of Ukraine, which was ratedwhich was rated uaA uaA in 2in 2009009– The highest rating of financial and loan
stability in Ukraine from Standard & Poor’s– Reasonably high ability to completely fulfill
debt liabilities before other parties on time– Independent evaluation of credit quality of
the city is based on the analysis and calculations of financial plans and evaluation of management strategy
•• Approval of the second framework Approval of the second framework agreement with EBRD for agreement with EBRD for 50 50 million Euro million Euro inin 20092009– Capital repairs and reconstruction loan for
Lviv city streets– Confirmation of financial stability of the
region.
INVESTMENTS INTO LVIV REGION:
REGION’S PROFILEINVESTMENT CLIMATE
PROJECTS AND OPPORTUNITIES
industry
agriculture
finance
construction
real estate
automotive trade
FDI into Lviv Region in 2008SECTOR SPLIT
INVESTMENT PROFILE OF THE REGION
•• Investment volumeInvestment volume::–– 44thth among Ukrainian regions–– 11stst in Western Ukraine–– 930,7930,7 millionmillion USD of FDI
attracted into the region as of 1.01.2009
–– 12731273 enterprises-recipients•• DynamicsDynamics::
–– 319,1319,1 millionmillion USD in 2008–– 350350 millionmillion USD (outlook for
2009)•• StructureStructure::
– More than 50%50% - real sector– industry and agriculture per
26%26% each
FDI into Lviv Region in 2008COUNTRY SPLIT
Great Britain
USA
Poland
Austria
Denmark
Cyprus
other
INVESTMENT CLIMATE
Maximum support inMaximum support in::•• Simplifying procedures for setting up of Simplifying procedures for setting up of
businessbusiness– Simplification of a permit system– Establishment of a “single permission window”
in all Lviv region district administrations•• Information supportInformation support
– Regular meetings with entrepreneurs, investors– Every investment project has a responsible
executive within Lviv Regional State Administration (Head of the Department/Deputy Head of the Department)
•• PromotionPromotion: : – Lviv International Economic Forum– Ukrainian Investment Summit.
KEY INVESTORS WORKING IN THE REGION
INFRASTRUCTURE PROJECTS:INTERNATIONAL AIRPORT
•• Construction timeframeConstruction timeframe: : –– 20092009--20102010
•• CostCost::–– 100100--150150 millionmillion USD
•• FundingFunding: : – State budget of Ukraine
•• ProjectProject::– new passenger terminal:
• handling capacity –10001000 passengers per hour
• area 3434 thousandthousand sq.m– ground infrastructure– runway built according to the
requirements of ІCАО CAT II• transnational planes allowed (critical
plane – Boeing 767-400)•• Development started inDevelopment started in 20092009..
INFRASTRUCTURE PROJECTS: CONCESSION ROAD
•• Investment volumeInvestment volume:: 317317 millionmillion USD•• ProjectProject: length 84,484,4 km, design speed – 150150 km/hour
– the challenge of connecting international transport corridor #3 will be solved, including the high accident part of the road Krakovets-Yavoriv and near the city of Lviv
•• Construction started inConstruction started in 20092009– Preparatory operations have been carried out – first construction leg
(communications placed, archeological works and tree cuttings completed).
KrakovetsKrakovets--Lviv roadLviv road::• part of the international
transport corridor #3Berlin/Dresden-Wroclaw-Lviv-Kyiv
• will connect “Krakovets”Ukrainian-Polish border crossing with existing highway М-06 Kyiv-Lvov-Chop
INFRASTRUCTURE PROJECTS: EUROGAUGE
1435 mm gauge railway connection1435 mm gauge railway connectionPolish border Polish border –– LvivLviv
• Improving connection from Western Europe to Lviv area along the III pan-European Corridor
• Boost to international high-speed railway connection across the EU
• Multiple stakeholders – the EU, state & local authorities, transport ministries and railway operators in Ukraine and Poland
– Part of the State Programme of implementing high-speed railway passenger traffic in Ukraine for 2005 – 2015
– Outlook for EURO-2012 and the 150th anniversary of the 1st railway connectionVienna – Krakow – Lviv (1861-2011)
•• Investment volumeInvestment volume:: 628628 millionmillion USD– Including the fleet of high-speed railway trains
•• Implementation frameImplementation frame: : 22--3 3 years•• Design speedDesign speed –– 300+300+km/hour•• Revenue forecastsRevenue forecasts:: during the 1st year of direct commercial exploitation of 4
trains (box-office returns only) – over 2525 millionmillion USD.
Przemysl – Lviv, 85 km
INDUSTRIAL AND MINING PROJECTS
•• Cement plantCement plant ““LafargeLafarge”” of of ““MykolaivtsementMykolaivtsement””corporationcorporation– “Dry” method of cement manufacturing– Total investment – 326326 millionmillion USD– Land plot for this project sold at an auction on
December 30, 2008 – Growth of cement sales by 250250 thousandthousand tons
per year– Decrease in harmful emissions into environment
•• ““LyubelskaLyubelska”” minemine– First private mine in the country with foreign
investment– Implementation timeframe: 20092009--20142014– Total investment – 11 billionbillion USD, 2255 millionmillion USD
– 2009, 2020 thousandthousand jobs– Coking coal of one of the most valuable varieties– Balance reserve – 8686 millionmillion tons of coal will
partially cover the deficit of coking coal in Ukraine.
TOURISM & RECREATION PROJECTS
Hotel and resort with inHotel and resort with in--househouse therapeutic therapeutic pools in Truskavetspools in Truskavets
•• Construction timeframeConstruction timeframe: : –– 20072007--20102010
•• CostCost::–– 3636 millionmillion USD
•• ProjectProject::– 5* hotel: 210 rooms, 9 floors– Aquapark:
– 4 floors– Water area – 5 554 sq.m– Water surface area – 1 320 sq.m.
PRIORITIES FOR THE DEVELOPMENT AND INVESTMENTS
•• Region of sustainable economic and business developmentRegion of sustainable economic and business development•• Lviv regionLviv region: : environmentally friendly manufacturingenvironmentally friendly manufacturing•• Lviv region:Lviv region: agricultural businessagricultural business
•• Ukrainian Gateway to the European Union Ukrainian Gateway to the European Union –– EUROEURO 20122012– Infrastructure, tourism and recreation:
– Border areas, Lviv: transport, housing and utility sector– Lviv and Pre-Carpathian territory: network hotels with international brand
names– Lviv: exhibition and conference halls– Pre-Carpathian are and Carpathian mountains: hotels providing sport and
recreation services•• Region of well educated populationRegion of well educated population, , innovation potential and innovation potential and
technologically advanced companiestechnologically advanced companies– Lviv: professional services, ІТ sector, energy-saving technologies and
innovations.
