1. UKRAINIAN INVESTMENT SUMMIT
INVESTMENT POTENTIAL OF LVIV REGION
EMERGING MARKET
AS ANSWER TO WORLD RECESSION
MYKOLA KMIT’
HEAD OF LVIV REGIONAL STATE ADMINISTRATION
March 10th 2009
3. A BRIDGE BETWEEN THE EU AND UKRAINE
• For the EU – access to significant
• Lviv region – transit
market:
border territory:
– 2.5 million consumers – Lviv
region – Key airport for all
– 12 million consumers – Western Western Ukraine
Ukraine
– International carriers:
– 47 million consumers – Ukraine
Wizz Air, LOT,
Austrian Airlines
– Lviv – 70 km to the
EU border
– 400 km to Warsaw
– 630 km to Budapest
• Extensive goods turnover with Europe: – 720 km to Vienna
– Export – 998,5 million US dollars (in – Border with Poland
2008) stretches for – 278
– Import – 2,6 billion US dollars (in km
2008) – 7 border crossings
4. LESS EFFECTED BY CRISIS
• European economy structure
– Small business
• 87% in real numbers, 75% in tax earnings
– Business growth
• 25,5% in 2008 (almost 15 thousand of new entrepreneurs)
• Less effected by economic crisis
– 2008:
• Industrial production – increase of 0,8% while the Ukrainian-wide decrease
is up to 3,1%
• Official unemployment level 2,7%, while Ukrainian-wide it is 3%
2,7%
– 2009 outlook:
• Decline in industrial production by 15%, but
15%
• Increase in gross agricultural production to 4,467 billion UAH (1,7%)
1,7%
5. COMPETITIVENESS
Lviv region is rated 4th competitive region among
other Ukrainian regions
– (Ukraine Competitiveness Report, World economic forum,
2008)
• Rationale:
– Intellectual potential and qualified workforce
• Rated 2nd by the quality of education in Ukraine
(Ukraine Competitiveness Report, World Economic
Forum, 2008)
• 25 universities and academies, 110 thousand
students: every 5th person in Lviv is a student
• Ivan Franko Lviv National University – one of
the oldest in Europe (est. 1661)
1661
– Innovations and IT
• 15% innovation-rich industrial enterprises
• Lviv is one of 30 most promising cities in the
world for IT development (KPMG research)
• More than 100 companies and 5 thousand
persons are involved in IT
• 1000 students graduate from National
University “Lvivska Politechnika” annually
– Competitive labour costs
• Average wages:
– Almost 30 times less than in France
– 6 times less than in Poland.
7. CENTRE FOR CULTURE AND RECREATION
Resort and recreation area attractive for investors
– Cultural monuments
• 50% UNESCO heritage of Ukraine
• 25% of all Ukrainian historic and architectural
monuments of ХІІ-ХХ centuries
• Lviv first mentioned in history in 1256
– Nature recreation
• Balneology: 7 of 8 world famous mineral waters
(Truskavets, Morshyn, Skhidnytsya)
• Carpathian mountains: a range of mountain resorts
– Tourist flow
• 2.5 million in 2008
• 40% more than in 2007
– 10% of potential used.
8. HIGH FINANCIAL STABILITY
• Lviv – the only regional centre of Ukraine,
which was rated uaA in 2009
– 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
agreement with EBRD for 50 million Euro
in 2009
– Capital repairs and reconstruction loan for
Lviv city streets
– Confirmation of financial stability of the
region.
9. INVESTMENTS INTO LVIV REGION:
REGION’S PROFILE
INVESTMENT CLIMATE
PROJECTS AND OPPORTUNITIES
10. INVESTMENT PROFILE OF THE REGION
FDI into Lviv Region in 2008
SECTOR SPLIT
industry
• Investment volume:
– 4th among Ukrainian regions agriculture
– 1st in Western Ukraine
finance
– 930,7 million USD of FDI
attracted into the region as of real estate
1.01.2009
– 1273 enterprises-recipients automotive trade
• Dynamics: construction
– 319,1 million USD in 2008
FDI into Lviv Region in 2008
– 350 million USD (outlook for COUNTRY SPLIT
2009)
Cyprus
• Structure:
– More than 50% - real sector Great Britain
– industry and agriculture per USA
26% each
Austria
Poland
Denmark
other
11. INVESTMENT CLIMATE
Maximum support in:
• Simplifying procedures for setting up of
business
– Simplification of a permit system
– Establishment of a “single permission window”
in all Lviv region district administrations
• Information 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)
• Promotion:
– Lviv International Economic Forum
– Ukrainian Investment Summit.
13. INFRASTRUCTURE PROJECTS:
INTERNATIONAL AIRPORT
• Construction timeframe:
– 2009-2010
• Cost:
– 100-150 million USD
• Funding:
– State budget of Ukraine
• Project:
– new passenger terminal:
• handling capacity –1000 passengers
per hour
• area 34 thousand sq.m
– ground infrastructure
– runway built according to the
requirements of ІCАО CAT II
• transnational planes allowed (critical
plane – Boeing 767-400)
• Development started in 2009.
14. INFRASTRUCTURE PROJECTS:
CONCESSION ROAD
Krakovets-Lviv road:
• part of the international
transport corridor #3
Berlin/Dresden-Wroclaw-
Lviv-Kyiv
• will connect “Krakovets”
Ukrainian-Polish border
crossing with existing
highway М-06 Kyiv-Lvov-
Chop
• Investment volume: 317 million USD
• Project: length 84,4 km, design speed – 150 km/hour
Project
– 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 in 2009
– Preparatory operations have been carried out – first construction leg
(communications placed, archeological works and tree cuttings completed).
15. INFRASTRUCTURE PROJECTS: EUROGAUGE
1435 mm gauge railway connection
Polish border – Lviv
• Improving connection from Western – Lviv, 85 km
Przemysl
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 connection
Vienna – Krakow – Lviv (1861-2011)
• Investment volume: 628 million USD
– Including the fleet of high-speed railway trains
• Implementation frame: 2-3 years
• Design speed – 300+km/hour
300+
• Revenue forecasts: during the 1st year of direct commercial exploitation of 4
trains (box-office returns only) – over 25 million USD.
16. INDUSTRIAL AND MINING PROJECTS
• Cement plant “Lafarge” of “Mykolaivtsement”
corporation
– “Dry” method of cement manufacturing
– Total investment – 326 million USD
– Land plot for this project sold at an auction on
December 30, 2008
– Growth of cement sales by 250 thousand tons
per year
– Decrease in harmful emissions into environment
• “Lyubelska” mine
– First private mine in the country with foreign
investment
– Implementation timeframe: 2009-2014
– Total investment – 1 billion USD, 25 million USD
– 2009, 20 thousand jobs
– Coking coal of one of the most valuable varieties
– Balance reserve – 86 million tons of coal will
partially cover the deficit of coking coal in Ukraine.
17. TOURISM & RECREATION PROJECTS
Hotel and resort with in-house therapeutic
pools in Truskavets
• Construction timeframe:
– 2007-2010
• Cost:
– 36 million USD
• Project:
– 5* hotel: 210 rooms, 9 floors
– Aquapark:
– 4 floors
– Water area – 5 554 sq.m
– Water surface area – 1 320 sq.m.
18. PRIORITIES FOR THE DEVELOPMENT AND
INVESTMENTS
• Region of sustainable economic and business development
• Lviv region: environmentally friendly manufacturing
• Lviv region: agricultural business
• Ukrainian Gateway to the European Union – EURO 2012
– 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 population, innovation potential and
technologically advanced companies
– Lviv: professional services, ІТ sector, energy-saving technologies and
innovations.
19. THANK YOU FOR ATTENTION
AND WELCOME TO LVIV REGION!
http://www.loda.gov.ua
mykola_kmit@loda.gov.ua
