State Agency Report

Content

Key Indicators ..........................................................................................................................4

The opening word of the Head of the State Agency for Investment and National Projects of Ukraine .................................................................................................................5

1. About the State Agency for Investment and National Projects of Ukraine ..........7

2. Activity review ...................................................................................................................10

2.1. National Projects of Ukraine ......................................................................................10

2.2. One-Stop-Shop (InvestUkraine) ................................................................................38

2.3. Investment Marketing ..................................................................................................40

3. Rule Making activity ........................................................................................................46

4. International activity .......................................................................................................50

5. Activities in the Regions .................................................................................................54

6. Finances ...............................................................................................................................58

7. The main tasks for 2012 ..................................................................................................62

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11 National Projects have been managed by the Agency within 7 months of 2011 (on March 22, 2012 the President of Ukraine extended the list of National Projects).

3 National Projects: Air Express, New Life, Open World entered into the investment phase.

6 National Projects entered into the phase of feasibility study drafting.

15 world financial centers were covered while holding the road-shows of National Projects.

910 foreign companies took part in the Road Shows of National Projects.

7.37 bln USD of foreign investments were attracted to economy of Ukraine during 2011 (6.61 bln USD as direct investment, 0.76 bln USD as portfolio investment).

4.5 bln USD – the amount of framework agreements being contracted and signedincluding the investment into the implementation of National Projects.

The key indicators for the first year of activity

National Projects create the most favorable conditions for business and give confidence to investors. Therefore, the realization of them is necessary. This work should be taken without extra bureaucracy and with the greatest responsibility.

From the Speech of President of Ukraine V.Yanukovych

during the meeting of Council of Regions (01/04/2012)

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The opening word of the Head of the State Agency for Investment and National Projects of Ukraine.

The key indicators for the first year of activity

The Annual Report of the State Agency for Investment and National Projects is the first in the history of independent Ukraine official public report on the results of activity of the central executive body.

Since May 12, 2011, when the Decree of the President of Ukraine has granted the official status for the State Agency for Investment and National Projects of Ukraine, the whole number of changes has been introduced to the administration system of the Agency. For the first time in public administration the principles of project management are being implemented by means of realization of 11 National Projects. These projects are aimed at tackling the key issues of strategic development of a state: the diversification of energy supply and energy efficiency; introduction of European standards for drinking water and safe delivery; building affordable housing; establishing a new quality of education and waste recycling in the Ukrainian cities.

In the end of 2011 the practical phase of realization of three National Projects has started. Air Express National Project – a high-speed railway connection between Kyiv and Boryspil International Airport has entered into the phase of construction on December 28, 2011. A pilot sample of Open World National Project embracing more than 5 thousand of teachers and around 15 thousand of students has been launched in 23 regions of Ukraine. In the beginning of 2012 the official opening of three perinatal centers in Kirovohrad region, Kyiv and Kharkiv took place within the New Life National Project.

National Projects are implemented using the model of public-private partnership, which envisages the budget expenditures at the level of only 5% of the total cost of the project.

Since December 1, 2011 the One-Stop-Shop service became operative in Ukraine. This is the mechanism which significantly simplifies the entering of foreign investor into the Ukrainian market. For the first time, the open public tenders were held with the broad participation of top-class international participants. Those tenders have also provided the savings of budget funds.

In 2011 for the first time the efforts on increasing investment attractiveness of Ukraine abroad were taken. The world Road Shows in 15 financial centers in Europe, the United States, Middle East and Asia was held. During the Road Shows the Ukrainian investment projects were presented to the top-class investors.

In general, the Road Shows were attended by over 1 thousand visitors representing 910 companies – potential investors and partners. Among them are the world-known companies, such as Barclays Capital, Citigroup, Bank of America, Merrill Lynch, Societe Generale, Exxon Mobile, Morgan Stanley, Commerzbank AG, Velatel, Pricewaterhouse Coopers AG, Baker & McKenzie, HSBC, Halliburton, Vanco Exploration Company, Chevron, Deloitte, SigmaBleyzer, Dieselpoint, Shelton Petroleum, Abu Dhabi National Oil Company, Interpipe, GE Energy, Mitsubishi Corporation, Sumitomo Corporation, Japan Tobacco Inc., Yokogawa Electric, Daewoo E & C, Samsung, POSCO, Hyundai Corporation, LG Electronics and others.

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The Road Shows have covered 4 continents and 11 countries. In Europe the cities of London, Vienna, Frankfurt am Main and Madrid were visited. The start of Road Shows took place in London at the EBRD headquarters with the participation of EBRD President Thomas Mirow who said that “Ukraine today takes the second place among the countries-partners of the EBRD in terms of annual investment”.

The guest of honor at the Road Show in the U.S. was a Congressman from the state of New York Michael Grimm, who said that “the Ukrainian economy is one of the five most promising world economies, along with such countries as China, India and Singapore. And the U.S. should pay attention to the potential of Ukraine, because there are many opportunities for cooperation existing between our two states”. Besides New York city, the Agency also held the presentations in Houston, Chicago and Washington.

The guests of honor of the Road Show in the Middle East were the representatives of the three largest financial institutions of Kuwait. The Director General of the Kuwait Fund of Arab Economic Development Abdulwahab Ahmed Al-Bader has defined the National Projects as “very extensive and attractive for investors of all types”. The delegation of the Agency has also hold the meetings with the most respected investors in Istanbul and Abu Dhabi.

In Asia the Ukrainian investment opportunities were presented in Tokyo, Osaka, Seoul and Shanghai. The Vice-President of Korea Trade-Investment Promotion Agency (KOTRA) Kim Pon Kwon has recognized Ukraine as “a country having great potential in Eastern Europe”.

During the Road Show the bilateral negotiations with 62 companies have been conducted. After the end of Road Shows, the Agency received more than 150 partnership proposals for the realization of National Projects. These results were actually achieved by using only 52% of the budget funds planned.

National Projects are the key component of economic reforms initiated by the President of Ukraine. This is not only a mechanism for attracting foreign investment to Ukraine and a new positioning of Ukraine in the world. This is the perspective for internal changes and qualitative renewal of public administrating with the help of new personnel, new management system and a new type of thinking.

On April 6, 2011 during the presentation of the Investment reform with the participation of the President of Ukraine the objective to attract 7.5 billion US dollars of the foreign direct investment into the economy of Ukraine by the end of 2011 was announced. Despite the skepticism and pessimistic forecasts of international organizations, the attracted amount of investment has reached over 7 billion US dollars.

Outlining the plans for 2012, we should firstly mention the importance of legislative support for implementation of the National Projects and attracting foreign investment.

Following the first legislative steps of the Agency – i.e. Laws of Ukraine “On Public-Private Partnership” and “On Industrial Parks” –the Parliament should adopt in the nearest future a new version of the Law, which will regulate the activity of “One-Stop-Shop”. The next in turn is the draft Law “On National Projects” as well as the approval of a new system of “Project Marketplace”, which will provide high-quality product for investing in Ukraine. The key challenge for 2012 is drafting a new Investment Code, which will significantly improve the legislation in the investment sphere.

The experience of the world’s leading countries shows that the prerequisite for any economic growth is an annual increase of the investment. We are strongly convinced that Ukraine needs to double the level of investment up to 15 billion US dollars within the next 3-4 years. I think that this task is attainable providing that the efforts of Government would be concentrated and the Investment reform, that was presented in April 2011, would be implemented.

The year of 2012 will be a crucial challenge for the viability of our investment strategy aimed at implementation of the ambitious reform plan.

Our team is full of enthusiasm and ready to stand new challenges.

Sincerely yours and welcome to the cooperation,

Vladyslav Kaskiv

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The missionThe State Agency for Investment and National Projects of Ukraine (hereinafter – the Agency) was established on December 9, 2010 by means of reorganization of the State Agency of Ukraine for National Projects and the State Agency of Ukraine for Investment and Development according to the Decree of the President of Ukraine № 1085 “On optimization of the system of central executive bodies”.

The mission of the Agency is the attraction of foreign investment to Ukraine and providing the implementation of strategic projects aimed at technological updating and development of basic industries of economy of Ukraine (National Projects).

The Provision of the Agency, approved by the President of Ukraine on May 12, 2011 entrusts the Agency with the following assignments:

The implementation of the state policy in the sphere of investment activity;

National Projects’ implementation;

Improvement of the investment image of Ukraine, support of investment development of the regions of Ukraine.

Four directions of the Agency’s activity were defined to realize the tasks abovementioned:

“National Projects”“One-Stop-Shop”“Project Marketplace”

“Investment Marketing”

The Structure of the AgencyThe State Agency for Investment and National Projects of Ukraine is a central executive body which activity is directed and coordinated by the Cabinet of Ministers of Ukraine. The Agency is the main body in the system of central executive bodies responsible for implementing the state policy in the sphere of investment activity and management of National Projects – strategic projects providing technological modernisation and development of the basic branches of the real sector of economy of Ukraine.

Organizational structure of the Agency reflects the main directions of its activity (Table 1). The authorized staff size of the central office is 170 employees. In order to implement the tasks at the regional level to the Agency’s jurisdiction were taken 27 state budget institutions – regional centers for investment and development. In order to ensure effective implementation of the National Projects as well as perform their direct management, the state enterprises are also established.

More details on the realization of the National Projects are listed below in the chapter“National Projects”.

1. About the State Agency for Investment and National Projects of Ukraine

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2.

3.

Structure of the Agency

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Structure of the central office of the Agency

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Major events

The launch of the National Projects of Ukraineunder the Decree of the President of Ukraine. 8.09.2010

Public presentation of the Open World National Project 28.02.2011

Public presentation of the Investment Reform with the participation of the President of Ukraine. 6.04.2011

Public presentation of the Air Express National Project 8.04.2011

The establishment of the State Agency for Investment and National Projects of Ukraineunder the corresponding Decree of the President of Ukraine. 12.05.2011

Determination of the developer of feasibility study of the Open World National Project (TIKON). 25.05.2011

Public presentation of socially orientedNew Life (new quality of maternity and childhood protection) National Project. 6.06.2011

Public presentation of Energy of Nature National Project. 21.06.2011

Public presentation of the LNG-Terminal National Project. 1.07.2011

Draft Law of Ukraine “On industrial parks”was adopted in the first reading. 6.07.2011

The Resolution of the Cabinet of Ministers of Ukraine № 772 “On approval of the Memorandum between the Cabinet of Ministers of Ukraine and the Government of Azerbaijan Republic on the cooperation in the organization of the liquefied natural gas supply to Ukraine” was approved. 20.07.2011

Presentation of the Master-plan and preliminary feasibility study of the Open World National Project. 14.09.2011

Spanish company “SOCOIN” won the tender for the feasibility study development of the LNG-Terminal National Project 16.09.2011

The Provision of the State Register of National Projects was approved according to the Resolution of the Cabinet of Ministers of Ukraine № 999. 19.09.2011

The agreement with Azerbaijan on liquefied natural gas supply and the establishment of the joint company between Azerbaijanian SOCAR and the Agency were initialled. 19.09.2011

The decision of the Government on the implementing by the Agency of the infrastructure project - the construction of the “Minor” ring road. (Resolution of the Cabinet of Ministers of Ukraine №982.) 19.09.2011

The winner of the tender for the feasibility study development of the Olympic Hope - 2022 National Project was announced. (“Klenkhart & Partners Consulting”). 20.09.2011

The winners of the competition for the feasibility study development of the Clean City National Project (“Atlas WordBildinhSystems Ukraine”,“Institute UkrkomunNDIproekt” Ltd. and “Comfort-Service” PC) were announced. 5.10.2011

Launch of the Road shows of the National Projects in the Headquarters of the EBRD (London). For the first time the Road Shows in 15 world financial centers were held. 31.10.2011

The proposals on four new National Projects – Industrial Parks of Ukraine, Revived cattlebreeding, Grain of Ukraine and Green Markets were considered at the meeting of the Committee for Economic Reforms. 2.11.2011

The Cabinet of Ministers of Ukraine approved the preliminary feasibility study of the Affordable Housing National Project. 23.11.2011

The Agency announced the launch of One - Stop - Shop – a new service for investors 1.12.2011

The First International Investment Conference “Investconference in Kyiv 2011” with the participation of the President of Ukraine was held. 9.12.2011

In frames of the Air Express National Project the construction of the high-speed railway connection between Kyiv and “Boryspil” airport was launched. 28.12.2011

Public presentation of the feasibility study of LNG-Terminal National Project. 30.03.2012

International Scientific ConferenceOpen World National Project – start of “School of Future” 17–18.04.2012

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“National Project” – is a project of priority directions of socio-economic and cultural development that is strategically important for a particular industry of the real sector of economy or regional development.

National Projects are the engines of economic reforms in Ukraine and practical implementation of the Program of Economic Reforms for 2010-2014 years “Prosperous Society, Competitive Economy, Effective State”, that was approved by the Decree of the President of Ukraine №504 dd. April 27, 2011 № 504. They are aimed at building modern, stable, open and competitive economy and above all - at the increase of welfare of Ukrainian citizens.

National Projects of Ukraine have three key peculiaritiesStrategic FocusNational Projects represent major and long-term priorities of development of socio-economic sphere. Each project has strategic importance for economic development of Ukraine, its particular sector, social sphere or its separate area and also influences on the improvement of the life quality. National Projects have to become the projects of crucial power of economic transformations in Ukraine.

Sustainable Development National Projects have a social character. As an example - the Open World and New Life projects are aimed solely to improve the life of future generations, the Clean City project is aimed at the significant improvement of environment, the Energy of Nature project is aimed at the usage of alternative and renewable energy.

2. Overview of the activity

2.1. National Projects

Yuriy Husyev Director for National Projects Department

Born on November, 15, 1979.

Finished postgraduate studies at the Kyiv National Economic University and obtained Master’s degree in Project Management and Consulting. During different periods of time was studying in the following educational institutions: Staffordshire University (England), Ukrainian Free University (Munich, Bavaria, Germany), Kyiv National Economic University (Kyiv, Ukraine), Kherson State Technical University (Kherson, Ukraine), John F. Kennedy School of Government of Harvard University (Cambridge, Massachusetts, USA).

Worked as Advisor to the Head of Kherson Oblast State Administration; Deputy Director, Director of several private companies in Kherson and Kyiv, Head of Group of Advisors, Director of Staff of Minister of Economy, Deputy Head of the Department of Investment and Innovative Policy of Ministry of Economy of Ukraine. Currently holds the position of Director of Department for National Projects of the State Agency for Investment and National Projects of Ukraine. Teaches economy in different universities of Ukraine and abroad. Finished and prepared the defense of a thesis “ Strategy of development of enterprises based on franchising”. Is the author of a number of scientific works and articles on franchising, international economy and export development.

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Secure InvestmentSupport of the President of Ukraine is an additional incentive for attraction of investment to Ukraine. It does not replace the necessity to improve the legislation for improvement of investment climate. However, it serves as a guarantee for security of investment into Ukrainian economy. In its turn, cofinancing from the side of State, using the project management tools allows to minimize risks and ensure profitability of the projects.

The conception mentioned under the national abbreviation 3S (Strategic, Sustainable, Secure) became the basis of National Projects branding in the international arena.

While realizing the National Projects the Agency attracts investment even under conditions of economic crisis as well as introduces innovative model of public administration, the main idea of which is the project approach and establishment of a project management office.

In the frames of regulatory support of the realization of National Projects the lawdraft “On National Projects” was elaborated and is currently registered in the Verkhovna Rada of Ukraine (Parliament of Ukraine).

The benefits of establishing the project office for National Projects’ implementation

General benefit - systematic approach during the National Projects’ implementation

Efficiency in obtaining, analyzing and monitoring of information concerning the National Projects’ implementation

Optimization of resources

Management of risks

Effective management decisions

Transparency in dialogue with investors and financial advisors

Security of investment

Development of National Projects in 2011According to the tasks and activities of the National Action Plan for 2011 as for the implementation of the Program of economic reforms “Prosperous society, competitive economy, effective state” in 2011 the Agency was realizing 11 national projects:

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3

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Pre-investment phase

Investment phase

Phase of exploitation and monitoring

For implementation of each of the National Projects the project teams consisting of qualified specialists from the state and private sectors were formed as well as separate state enterprises were established. In the end of 2011 three projects

completed pre-investment phase and entered the stage of practical implementation. They are New Life, Air Express and Open World National Projects.

The average term of realization of each project is 3.5 years.

A typical scheme of project realization involves three phases of life cycle of the project:

Realization stage of the National Projects

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At the end of 2011 the President of Ukraine initiated a new socially oriented and important Timely Assistance National Project – establishment of a single network of regional operational and dispatching services using modern GPS-Technology to reduce arrival time of emergency medical care teams to the patient.

Besides, at the end of 2011 by the initiative of the Agency four new National Projects were introduced to the Committee for Economic Reforms, implementation of which shall promote agricultural development and development of industrial production infrastructure, namely:

– Establishment of ten pilot industrial platforms in different regions of Ukraine.

– Establishment of the network of markets of agriculture products to meet population consumer’s demand.

– Growth of GDP, modernization of grain production and increase of export potential.

– Providing of food safety in the sphere of production of dairy products and beef, increase of export potential of livestock industry.

Advanced projects

Scheme of realization of National Projects

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Vitalii Demianiuk

Chairman of Coordination Council of LNG Terminal National Project

Born on December 26, 1971. In 1995 graduated from Moscow State Engineering and Physics Institute, speciality “engineer-physics”. In 1998 graduated from the Law Faculty of Moscow State University named after M.V. Lomonosov, speciality “lawyer”.

In 2010 graduated from the National Academy of State Administration of Ukraine under the patronage of the President of Ukraine, received a master’s degree of social development.

2000 - 2010 – occupied administrative positions at JSC “Krasnoyarsk uholnaya Companiya” [Krasnoyarsk Coal company], LLC “Russkaya upravlyayushchaya Companiya”, Moscow [Russian management company], JSC “Rosiyskie komunalnie sistemy” [Russian municipal systems] as well as in several gas distribution companies.

March 29, 2006 - August 21, 2006 – Advisor to the Minister of Construction, Architecture, Housing and Communal Services of Ukraine.July - December 2010 – Deputy Head of the State Agency for National Projects of Ukraine.

Since 2011 is a Chairman of Coordination Council of LNG - Terminal National Project.

LNG Terminal National Project – sea terminal to receive liquefied natural gas.

Terminal for receiving and regasification of liquefied gas

Odesa region on the open Black Sea coast near the entrance to port “Yuzhnyi”.

total capacity of the terminal is 10 billion m3 of natural gas per year. The terminal is supposed to receive LNG tankers with a capacity of 138 000 to 178 000 m3.

The construction is planned in 3 stages:1st stage – floating plant for storage and regasification, with a capacity of 5 billion m3 of natural gas per year. Completion of the construction of the first stage and start of LNG deliveries is planned on November 2015. 2016 is the first full year of exploitation;2nd stage – ground terminal with two tanks of 180 thousand m3 with power capacity of 5 billion m3 of natural gas per year;3d stage – construction of the third tank and installation of additional equipment needed for intensification of power capacity to 10 billion m3 of natural gas per year.

approximate investment volume is 856 million EUR, including technology part - 780 million EUR

Regarding the planned tariff policy payback period is 9 years

Investment object:

Localization:

Investment object characteristics:

Investment volume:

Project implementation:

LNG Terminal

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Project development in 2011: July 1, 2011 was held a public presentation of the LNG terminal National Project. The main goal of the project is the implementation of the strategy of the President of Ukraine to diversify energy supplies to Ukraine as well as the intensification of energy security of Ukraine.

July 6, 2011 tender to determine the developer of the project feasibility study was announced.

September 16, 2011 was announced the winner of the tender for feasibility study development of the LNG-terminal National Project. Spanish company SOCOIN (member of the group Gas Natural Fenosa group) became the winner of the tender.

November 16, 2011 Ukraine joined the World LNG-club. It happened at the XII World LNG-summit in Rome, where Ukrainian delegation headed by Chairman of Coordinating Council of LNG Terminal National project Vitalii Demianiuk presented the project and for the first time announced about the participation in the market.

In December 2011 Ukraine initialed the treaty with Azerbaijan on gas supply. Validity is 10 years.

The work with potential investors and suppliers of liquefied natural gas is carried out.

January 30, 2012 SOCOIN Company finished the feasibility study of the LNG terminal National Project.

Experts from the State Enterprise LNG Terminal National Project accomplished the reception of the feasibility study and began the preparation of a preliminary feasibility study for review and approval by the Cabinet of Ministers of Ukraine.

Plans and expected results:In 2012 it is planned to solve the problem of creation of the system of supply and transportation of liquefied gas in Ukraine in the framework of the component LNG – resource.

In the first half of 2012 it is planned to establish Management Company of the LNG Terminal National Project with the participation of leading foreign oil companies, which will start project works of certain objects that are components of the LNG terminal technological complex (dredging, connection to the GTS of Ukraine).

In the second half of 2012 it is planned to establish an international consortium, which includes international and Ukrainian investment and financial companies. Financing of the terminal construction will be realized with the participation of the state.

The result of the project realization:improvement of the level of energy security of Ukraine by diversification of the sources and routes of natural gas supplies to Ukraine;

elevation of social stability in Ukraine through creation of additional working places;

achievement of economically justified level of prices for natural gas;

improvement of the investment climate and additional incentives for the development of energy industries.

Scheme of allocation of LNG terminal

Port “Yuzhnyi”

LNG Terminal

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Viktor SirmanHead of the New Life National Project - new quality of maternity and childhood protection. Born on September, 28, 1974.

In 1997 graduated from Chernivtsi State Medical Institute, specialization medicine, medical specialist obstetrician - gynecologist.Work experience started in Chernivtsi maternity hospital № 1.

2002 - 2006 served as deputy director and later director of the Coordinating Center of transplantation of organs, tissues and cells of the Ministry of Health of Ukraine.

2004 - 2005 studying in Kyiv Medical Academy of Postgraduate Education named after P.L. Shupyk, the Ministry of Health of Ukraine. 2006 - 2008 - studying at UPBA, International Institute of Business, Financial Management.

2006 - 2007 - Executive Director, Member of the Board of UIC “Kniazha”. Since 2007 served as head of division of support of activity of the Minister, Ministry of Health of Ukraine. Since 2010 served as Deputy Minister of Health.

2010 - 2011 – Coordination center of transplantation of organs, tissues and cells of the Ministry of Health of Ukraine, Deputy Head on scientific and coordination issues.

In 2010 defended the thesis on “Impact of progenitor cells in fetal rat pathophysiological mechanisms of renal injury in arthritis Pearson” (experimental study).

In June 2011 was appointed the Head of the New Life National Project.

Candidate of Medical Science. Honored Worker of health protection. State employee of the seventh rank.

New Life National Project – new quality of maternity and childhood protection

Network of regional perinatal center of the III-d level, provided with innovative technologies and modern equipment.

All regional centers, Kyiv, Sevastopol and AR Crimea

Reforming of the sphere of maternity and childhood protection through creation of a network of health care institutions in the sphere of obstetric-gynecologic facing the challenges of nowadays. Regional Perinatal Centers of the III-d level can be constituents of the health care institutions of the republican, regional or city level as well as independent health care institutions on the regional (republican or city) levels. Regional Perinatal Centers are created through the reconstruction, repair operations, technical re-equipment (of buildings, constructions) and installation of innovative technologies and modern equipment.

Financing of the realization of the New Life National Project will be accomplished in terms of expenses envisaged by the state budget and the local budgets of AR Crimea, regions, Kyiv and Sevastopol (25-30%), subventions from the state budget, at the expense of other additional sources, technical assistance of the international organizations participating in the National Project realization.

by 2014.

Investment object:

Localization:


Investment volume:

Project realization:

New Life

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Project development in 2011: New Life National Project was approved as a priority direction of the public policy on maternity and childhood protection, its realization is under the auspices of the President of Ukraine.

December 14, New Life project won an international support. UNICEF representative in Ukraine, the United Nations Population Fund in Ukraine and UNDP Ukraine, WHO Country Office in Ukraine, Swiss Cooperation Office in Ukraine signed Joint Statement of Intent. From the Ukrainian side the statement was signed by representatives of the Ministry of Health of Ukraine and the Head of the Agency Mr. Kaskiv.

January 31, 2012 Perinatal Center was opened in Kirovohrad.

February 10, 2012 Perinatal Center was opened in Kyiv.

March 2, 2012 Perinatal Center was opened in Kharkiv.

Plans and expected results:National project provides practical Reform of the health care protection and creation of the new quality of maternity and children protection to decline the indexes in mortality among newborn and woman in labour through

creation by 2014 of 27 regional perinatal centers, provided with modern equipment. In April it is planned to open Donetsk regional perinatal center.

By the end of 2012 it is planned to establish Republican Perinatal Center in AR Crimea, regional perinatal centers in Dnipropetrovsk, Zhytomyr, Poltava and Ternopil.

Realization of the conception of the New life National Project – new quality of maternity an childhood protection will give the possibility to create basis for achievement of the main tasks of Millennium Development Goals declared by the President of Ukraine at the UN Summit in 2010 concerning the improvement of mothers health and children mortality decline, namely reduction by 17% of the level of maternal mortality, reduction by 17% of the mortality level among children at the age under 5 years.

New Life

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Ihor Kurus Head of the Open World National ProjectBorn on January 2, 1970.

In 1997 graduated from Kyiv Institute of Culture, the specialization “Amateur and folk arts”, 2003 – graduated from the State Academy of Culture and Arts, the specialization “sociologist of culture”.

1992 - 1993 worked as manager on relations with Television and Radio broadcasting organizations of the Direction of All-Ukrainian festival “Chervona Ruta”.

1995 - 1996 – editor of Telenedelya newspaper, Senior editor of Ltd “World Service Radio of Ukraine” in the National Radio Company of Ukraine.

Since March 1996 worked at the National Council of Ukraine on Television and Radio broadcasting. Since 2001 served as organizational department director of the National Council. In April 2005 was appointed as a member of the National Council of Ukraine on Television and Radio broadcasting, since April 2005 - Deputy Chairman of the National Council.

Open World National Project

The project envisages the establishment of the modern educational infrastructure complex to improve level of knowledge of pupils in secondary schools. Basic elements of this infrastructure is an access to broadband radio access (4G) network, providing students with special netbooks and creation of the educational “cloud” - electronic knowledge base, adapted to the needs of the system of the secondary education.

Secondary schools of Ukraine, regional and district education departments.

Creation of the network of broadband radio access in the territory of Ukraine, approximately - 5 million subscribers.In the frames of the National Project 1.5 million schoolchildren will be provided with net books with Ukrainian educational product and access to the Internet.20 thousand schools will get access to the Internet and school rooms for children of 5-9th forms will be equipped with interactive computer systems. The pilot project Open World, involving world experience of electronic education will work in more than 700 Ukrainian schools till the end of March 2011.The project is proposed to be implemented in 5 stages: pilot project (winter-spring 2012), 1st year - (2012-2013 school year, 7th forms) 7% of consumers, 2nd year - (2013-2014 school year, 5-8 th forms) 35%; 3d year - (2014-2015 school year, 5-9th forms) 85%; 4th year - 100% of users.

Approximate investment volume is 676 million USD.

Taking into consideration future business model the payback period is 7 years

Investment object:

Location:


Investment volume:

Projectimplementation:

Open World

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Project Development in 2011: On March 5, 2011 the competition tender for the feasibility study development of the Open World National Project was announced.

From February to April 2011 the pupils competition for the best logo and talisman of the Open World National Project was conducted. There were submitted 655 pupils’ works from 14 regions of Ukraine.

In May 2011 started the administration of the Open World National Project web-page www.ow.org.ua

On May 25 Research and Consulting Association was defined as a winner of the bidding. The Association includes LLC “Joint Venture “TIKON”, A.S. Popov Odessa National Academy of Telecommunications, Institute for Telecommunications and Global Information area NASU, Borys Hrinchenko Kyiv University, Scientific research National Center of Legal Informatics of the National Academy of Legal Sciences of Ukraine.On September 14, 2011 master plan and preliminary feasibility study of the National Project were presented.

In October draft resolution on approving preliminary Feasibility Study of the Open World National Project was submitted to the Cabinet of Ministers of Ukraine.

On December 10, 2011 a nationwide contest for the creation of electronic educational resources (multimedia lessons) was launched among teachers and trainers for the secondary school. More than 1 500 contest entries were submitted for the contest.

The draft legal act of the Cabinet of Ministers of Ukraine on approval of the preliminary feasibility study of the Open World National Project was worked further on and re-submitted to the Cabinet of Ministers of Ukraine on January 17, 2012.

The first schools to implement a pilot project were defined in cooperation with the Departments of education and science of Region State Administrations.

On January 11, 2012 started the implementation of the Open World National Project as the pilot one in 704 secondary schools from 23 regions of Ukraine.

Plans and expected results:The proposals on the state support of the Open World National Project were given for the project implementation on the condition of public guarantees in 2012 budget year.

In 2012 the project is planned to be realized in about 2 000 schools with the participation of approximately 24 000 teachers and more than 120 000 pupils of the seventh forms.

Work proceeding: establishment of regulatory framework, sanitary norms, standards, equip-ment certification, start-up of training portal, software.

The result of the implementation: competi-tive growth of Ukraine, development of the educational sector of national economy, access of Ukrainian pupils and teachers to the best international educational resources, growth of national educational resources’ export, ex-panding of consumers’ audience and providers of educational services, acceleration of Euro-pean integration of Ukraine, implementation of a number of international agreements, pro-grams and projects as well as improvement of the quality of life of Ukrainian people through equal access opportunities to the educational top brand resources.

Open World

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Bogdan Balasynovych

Head of the Clean City National Project.

Born on April 18, 1974.

Graduated from Y. Fedkovych Chernivtsi State University, terminated postgraduate study in Taras Shevchenko Kyiv National University. A candidate of Economics, author and co-author of several publications on economic issues.

In 1996 - scholar of Austrian Academic Exchange Service (OAD) – Training in Klagenfurt University. 1998-2000 - DAAD-scholar, studying and working at his thesis in Ruhr University (Germany).

2001–2002 - practice in the Parliament of the Federal Republic of Germany.During the years studied in Vienna Economic University (Austria), O. von Humboldt University (Berlin, Germany) and John F. Kennedy Graduate School of State Administration at Harvard University (Boston, USA).

In 2006 graduated from the Diplomatic Academy of Ukraine under the Ministry of Foreign Affairs of Ukraine, in 2011 graduated from the National Academy of Public Administration under the office of the President of Ukraine.

Served in the Ministry of Justice, Ministry of Economy and the Cabinet of Ministers of Ukraine.October 2007 - May 2010 served as Deputy Chairman of the State Committee of Ukraine for Technical Regulation and Consumer Policy.

Since October 2010 is a member of the Working Group of the Clean City National Project.Possesses the 3rd rank of a civil servant.

Clean City National Project – modern systems for solid domestic waste (SDW) recycling.

Complexes of solid domestic waste recycling.

The Clean City National Project envisages the construction of modern high-tech systems for solid domestic waste recycling in Ukraine. 10 cities were selected for implementing the Clean City National Project, having become its components, namely: Kyiv, Kharkiv, Dnipropetrovsk, Chernigov, Sumy, Vinnytsia, Ternopil, Khmelnytskyi, Kirovohrad and Poltava. In future other cities of Ukraine may be additionally included to the project.

The planned capacity of the complex for solid domestic waste recycling, depending on the population of the city is from 100 to 300 thousand tons per year.

The average volume of investment in one complex, depending of its capacity and technology chosen, is from 30 to 60 million EUR.

the payback period of each regional component of the project is from 5 to 7 years taking into account the changes planned in tariff policy. The total expected investment volume throughout the project (for all years) is up to 400 million EUR.

Investment object:

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Clean City

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Project Development in 2011:The work on the selection of the cities-participants of the project was carried out. Ten cities were selected among more than thirty cities that have expressed the desire to participate in the project. Selected cities became the component of the National Project.

A competition for the feasibility study (FS) development on the construction of the complex of solid domestic waste recycling was held. As a result of the competition the executors of the feasibility study development for the components of the Clean City National Project are LLC “Atlas VordBildingSystems Ukraine” (Kyiv, Chernivtsi), LLC “Institute UkrkomunNDIproekt” (Sumy, Kharkiv), “Comfortservice” Public Company (Ternopil, Khmelnytskyi) and LLC ”KTS Group” (Poltava, Kirovohrad, Dnepropetrovsk, Vinnitsia).

In frames of the Clean City National Project the morphological investigation of SDW is carried out according to the German standard. Similar investigations have not been conducted in Ukraine for last 20-25 years, but are crucial for the correct choice of SDW recycling technologies.

The specialists and experts of the Clean City National Project developed and submitted to the Verkhovna Rada of Ukraine the draft laws aimed at establishing legislative incentive mechanisms to attract foreign and domestic investment in the waste processing industry.

Plans and expected results:In 2012 it is planned to fulfill the feasibility study development of 10 cities – components of the project, to get their approval by the Cabinet of Ministers of Ukraine, to announce and hold a competition to attract investors for the construction of facilities on SDW re-cycling. Deloitte & Touche USC is a partner of the project, it provides the development of a business plan for each city. The project will be implemented on the basis of public-private partnership. U.S. Agency for International De-velopment (USAID) is a leading consultant of the Clean City National Project concerning the implementation of the public-private partner-ship mechanism. USAID will participate in the preparation of PPP contracts in the final stage of the project.

Expected results: to attract investors and begin the construction of new modern facilities on SDW recycling in cities-components of the project. Modern systems on SDW recycling will improve sanitary and environmental situation of urban settlements; bring the environmental situation into compliance with European norms and standards; significantly reduce landfill household, construction waste at landfills; considerably reduceCO2 emissions and pollution of underground aquifers.

Clean City

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Pavlo Churylo

Head of the Olympic Hope-2022 National Project

Born on July 17, 1984.

Studied in Kyiv National Trade and Economic University, Banking Department, received Master’s degree in banking in 2007.

After graduation in 2007 continued his postgraduate studies in the same University, specializing in “Money, Finance and Credit”. Taught at the Department of Banking Financial Monitoring and Banking Supervision. Has written a thesis “Mergers and acquisitions as a tool for the consolidation of banks’ capital of Ukraine”. Currently is the

author of several scientific publications in professional editions.

Since 2007 worked as a chief economist in the Investors and Sponsors Development Committee in the Construction Direction under the Patriarch of the Ukrainian Greek-Catholic Church. Since 2008 worked in JSC “ProCredit Bank”, OJSC “VTB Bank”, PC “Alfa-Bank” occupying different positions.

In July 2011 was appointed the Head of the State Enterprise “Olympic Hope–2022”.

Olympic Hope - 2022 National Project – development of tourist and sports infrastructure.

Sports and tourist infrastructure of Ukraine.

Lviv and Transcarpathian regions with center in Lviv, the city to apply for holding Olympic Games – 2022.

Sports infrastructure objects of Lviv and Transcarpathian regions of Ukraine, able to ensure appropriate level of native sportsmen to participate in the international competitions as well as hold Winter Olympic Games 2022. Tourist infrastructure, able to provide adequate level of rehabilitation services, treatment and leisure for travelers from around the world.

The project envisages the growth of tourist attractiveness of Ukraine, particularly of Carpathian region, creating positive international image of Ukraine, creating modern conditions for winter sports, physical culture and promoting healthy lifestyle, as well as investment attraction for tourist infrastructure development and creation of new jobs.

The project realization involves the development of Olympic infrastructure for the budget costs and construction of tourist facilities for investment funds according to the requirements of the International Olympic Committee.

approximately 80 billion UAH.

Project payback in the form of public-private partnership – 10 years with

economic profitability.

Investment object:

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Olympic Hope - 2022

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Project development in 2011: September 20, 2011 Klenkhart & Partner Consulting Company (Austria) was announced as the winner of the tender for feasibility study (FS) development of the project. An audit for sports infrastructure and mountainous areas of Lviv and Transcarpathian regions is carried out to prepare for the Winter Olympic Games - 2022 in Ukraine.

The potential locations for the competition and development/reconstruction of sports infrastructure were determined, especially Transcarpathian and Lviv regions. The detailed analysis of existing sports infrastructure of these regions is carried out.

Besides, the Intergovernmental Working Group on the selection of components of the Olympic Hope – 2022 National Project including the representatives of the International Olympic Committee, Federation of Skiing of Ukraine, Federation of Biathlon as well as Lviv and Transcarpathian regions, took a decision for determining the components of the Olympic Hope – 2022 National Project, namely: Lviv – Olympic city, Tysovets Sports Resort, Borzhava-Resort.

Plans and expected results:Pre-feasibility study of the National Project will be developed by Klenkhart & Partner Consulting in the second quarter of 2012. The analysis of economic practicability, the scope of work required, financial models and mechanisms to attract investment resources will be previously defined. Furthermore, within the Olympic Hope - 2022 National Project the development of the rational concept of the Games is planned in 2012. The concept provides maximum benefit for the State and regions, for the development of sport and tourism. Analysis of existing infrastructure under the requirements of the International Olympic Committee. The regulation of land issues including alienation of land for public purposes. Definition of the forms of

government involvement and refinement of the part of public expenditure, determination of the required amount of private investment, preparation of the documents for filing an application.

Olympic Hope - 2022

24

Vadym Tochenyi

Head of the Energy of Nature National Project

Born on May 19, 1969.

Received the economic education in Kyiv Institute for National Economy. Received a Master’s degree on public administration in The National Academy of Public Administration under the office of the President of Ukraine. Vadym Tochenyi participated in drafting the Strategy development of wind power in Ukraine, the wind energy section of the State Concept of development of alternative energy, regional programs development of wind power in the Crimea, Mykolaiv, Kherson, Zaporizhia, Donetsk

regions. With his participation the motivation for private investors on the effectiveness of investment projects in Ukraine of seven wind electric stations with total capacity of 2350 MW was prepared. The negotiations with the potential projects investors from Austria, Belgium, Spain, Italy, China, Germany, Poland, France, the Czech Republic and others were held. The implementation of these projects started.

Improved his professional skills as a First Deputy of the State Enterprise for Interdisciplinary Science and Technology Center of Wind Renewable Energy Institute of the National Academy of Sciences of Ukraine. Is a Board Member of the Association of industrial wind power plants of Ukraine.

In 2010 was appointed the Head of the Energy of Nature National Project.

Timur Morozov

Head of the State Enterprise “Energy of Nature National Project”.

Born on March 15, 1977.

In 1999 received a master’s degree on International Business, studying in Donetsk National Technical University.

Began his working career in 1996 as the office expert on the economy of Donetsk Regional State Administration Innovation Center.

Since July 1998 to September 2000 worked in the corporation

“Industrial Union of Donbas”, since September 2000 to June 2007 worked in Donetsk Regional State Administration Innovation Center. Until October 2010 worked in several projects related to innovation and information technologies.

October 2010 - July 2011 worked at the State Agency for National Projects of Ukraine, since July 2011- is a Head of the State Enterprise Energy of Nature National Project.

Energy of Nature National Project – development of wind, solar and small hydropower stations, the production of solid alternative fuel.

construction of power plants based on renewable energy sources (RES) with capacity of 2000 MW and the construction of factories for the solid alternative fuel production.

Construction of solar and wind power plants in such regions as Donetsk, Zaporizhia, Kherson, Mykolayiv, Odesa, Crimea and the Carpathians. Construction of small hydropower plants (HPP) in the regions of Western Ukraine. Bioenergy potential is available almost on the whole territory of Ukraine.

Investment object:

Localization:

Energy of Nature

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Project Development in 2011:Leading projects in alternative energy received the status of component of National Project within the realization of the Energy of Nature National Project. The Agency actively supports and promotes the arrangements that are intended to unite the efforts of business community and the State for projects’ realization in the sphere of “green energy” and assimilation of technology using the alternative energy sources. The launching of the first stage of Wind Park Novoazovsk industrial power is a significant event in this area.

The enduring dialogue with national and foreign investors in order to implement new technologies is provided. The development of a feasibility study of the Energy of Nature National Project for further implementation of pilot projects under public-private partnership is planned.

Within the framework of its activity Energy of Nature National Project carries on an educational campaign to strengthen the cultural level of energy consumption and the need to preserve the environment by using clean technologies.

Particularly, a number of public lectures on the importance of the Energy of Nature National Project implementation and urgency of energy saving technologies in Ukraine in conjunction with an international charitable organization “Green Dossier “ were organized.

The educational activity is dedicated to the all-European campaign “European days of Sun in Ukraine”.

Under the order of the Head of the Agency (October 21, 2011) the staff and the Provisions on the Intergovernmental Working Group on the selection of the components of the Energy of Nature National Project were approved. The Intergovernmental Working Group consists of the representatives of the Agency, the State Agency on Energy Efficiency and Energy Saving of Ukraine, the Ministry of Coal Industry of Ukraine, the State Enterprise “Energy of Nature” and the State Enterprise “Green Energo”.

The Memorandum of organization of tower production between the Danish Company “Vestas Wind Systems” and the State Enterprise “Production association “South Machine-Building Plant named after O.M.Makarov” was signed. Head of the Energy of Nature National Project Mr.Tochenyi and Minister of Climate Issues and Energy of Denmark Mr. Lykke Friis took part in the signing of the Memorandum.

The Intergovernmental Working Group on the selection of the components of the Energy of Nature National Project has defined the following Projects as the components of the National Project:

“Biomass Energy” – the Project is aimed at the usage of biomass potential (organic wastes processing, bio-gas production and its conversion to thermal and electric power) for munisipal and industrial facilities’ needs. Pilot Project will be realized in Kyiv Region.

“Warm House” – the Project provides for complete thermo-modernization of housing and facilities of public sector. The cities to implement the Pilot Project are: Berdyansk, Novovolynsk, Cherkasy.

“Ecolight” – the Project is aimed at the transformation of market in order to use the light energy-efficient technology and gradual cease of use of inefficient light devices and sources in residential and public buildings.

Plans and expected results:to diversify the sources of energy supply and to reinforce the energy capability of the country;to save on the consumption of imported energy resources (average annual saving of natural gas - 1.3 billion cubic meters);use of power plants based on renewable energy sources enables Ukraine to produce yearly 4.5-5.0 billion kilowatt of environmentally clean energy during 25 years useful life of useful wind and solar power plants;to start the process of renovation of basic foundations of electric power industry of Ukraine;to ensure the implementation of the Kyoto Protocol, to reduce substances emissions, harmful for health and environment (average annual prevention of carbon dioxide emissions - 33.6 million tons, the average annual prevention of sulfur oxides emissions - 33.0 ths. tons, average annual prevention of nitrogen oxides emissions - 21.6 ths. tons);to reach the European Environmental Standards (in accordance with requirements of the European Union the share of renewable energy in national energy production of countries wishing to join the community shall be not less than 6%);to create the market of energy efficient and scientific equipment, appropriate machinery and technologies, technical and technologic reequipment of energy-intensive production.

Available high natural energy potential in Ukraine (including solar and wind) has not been used yet, unlike the European countries, where the best area has long been used for the implementation of the projects on renewable energy. Besides, in Ukraine there is a wide electric network, availability of the land plots that can be involved to the industrial needs of the renewable energy. A high “green” electricity tariff for RES is valid. Therewith, these factors make the relevant investment projects high-profitable.

The value of the pilot Energy of Nature National Project is estimated at 30 billion UAH, the implementation period is 2010-2014,. (More correct cost figures will be obtained by the development of feasibility study). Fraction budgets - 0%, investment funds - 100%. The expected investment is 30 billion USD, including 10% investment of the total sum received in 2012.

In view of the planned tariff policy project payback period will be 7 years.

Investment object characteristic:

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Rostyslav MaraykinHead of Energy of Biomass Project Component of Energy of Nature National Project

Born on September 21, 1974.

In 1997 graduated from Technical University of Kryvyi Rih with qualification Mining Engineer.

In 2005 graduated from International Management Institute (IMI Kyiv) by PMD program Finance and Accounting . Later also obtained education in the sphere of strategic management and project management.

Since 1997 obtained an experience in strategic and operational management at the top positions of enterprises of industrial engineering and general contracting. Has an experience of realization of investment EPC (M) projects of industrial and energy construction in cooperation with leading foreign companies.

Since August 2011 - the Head of Energy of Biomass Project

Component of Energy of Nature National Project Energy of Biomass Portfolio

Project portfolio of Energy of Biomass is aimed at development of bioenergy industry in Ukraine by introduction of bioenergetic equipment and technology for municipal and industrial objects of heat and electricity.

The whole territory of Ukraine

Bioenergy projects for the production of green heat and electric power include the modernization and construction of the following objects:Combined heat and power plant from 1MW to 10MVt of electric power;Biogas plants from 0.1 MW to 6MVt of electric power;

Industrial boilers from 1MW to 50MVt of heat capacity.

The total amount of market of bioenergy projects are estimated by experts at 2 billion Euros. Thus, using existing conditions allow quick creation of the network businesses for producing and selling electrical and heat energy.

Investment projects with payback period of 3 years and exploitation period over 15 years.

Investment object:

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Project Development in 2011:Project Development in 2011:

In November 2011, the Inter-departmental Working Group on selection of the component of the Energy of Nature National Project decided to determine Energy of Biomass project as component of National Project. December 2011:

The working group of the project was created

Carrying out the analysis of existing infrastructure related to renewable (bioenergy) sources of energy, technical and technological potential of industry

The working group developed detailed technical specification for development of the pre-feasibility study and feasibility study of pilot project. Defined qualification requirements for participants in competitive tendering

Made a preliminary analysis of the potential regions and placement of the pilot project.

Considered and selected economically sound technology for the pilot project

Plans and expected results:In 2012 it’s scheduled to hold competitive tendering for the development of the pre-feasibility study and feasibility study of the pilot project

Attraction of the investor (s) and beginning of the investment phase of the pilot project are planned for second half of 2012

In 2012 development of portfolio of the investment proposals on the basis of the conducted pre-investment analysis

Presentation of portfolio of the investment proposals to potential investors - the end of 2012

1Wind energy. According to a research conducted by the international program INFORSE, available wind potential allows to build wind power station in Ukraine with total capacity of 24 GW, apart from the possibility of its offshore construction. Nominee capacity utilization factor of wind stations, built in the Ukraine on the territories with high wind potential, reaches 0.35, which significantly exceeds the corresponding average world and European indicators.Institute of Renewable Energy of Ukraine estimated annual technically achievable wind energy potential of Ukraine at 79.8 billion kW • h / year, equivalent to the standard fuel is 28 million tons of comparison fuel / year.

Solar energy. The potential of solar energy in Ukraine is high enough for extensive introduction of photoelectric systems. Thus, the average total amount of the radiation arriving on 1 square meter of surface ranges from 1070 kW • hours/m2 in northern Ukraine to 1400 kW • hours/m2 and above in the Crimea. This corresponds to the energy around 100 liters of diesel fuel or 100 m3 of natural gas.The index is really high and even much higher than in Germany 1000 • hours /m2 kW or even Poland - 1080 kW • hours/m2.Thus, the photovoltaic plants in this country work during 1 year and in combination with the high rates of green tariff makes the appropriate investment projects profitable.The annual technically feasible energy potential of solar power industry of Ukraine (electric and thermal), according to the Institute of Renewable Energy of Ukraine evaluated at 38.2 billion kW • h / year, equivalent to the standard fuel is 6.0 million tons EF / year.

Hydropower. The development of the potential of the rivers with small and micro hydroelectric power plant (HPP) helps to solve the problem of improvement of energy consumers. The most effective are the small HPP, constructed on existing hydro buildings.The benefits of hydropower are obvious - constantly renewed by the nature reserve of energy, easy operation, absence of pollution, improvement of the working conditions of the river transport. According to the Institute of Renewable Energy of Ukraine the annual technically achievable energy potential of the small hydro rate reaches 8.6 billion kW • h / year in terms of standard fuel is 3.0 million tons of comparison fuel / year.

Bioenergy. According to the Institute of Renewable Energy of Ukraine, technically achievable annual energy potential of bioenergy (including heating and electric) rate reaches 178 billion kW • h/year, equivalent to the standard fuel is 31.0 million tons comparison fuel/year.

28

Volodymyr Bondar

Head of the State Enterprise “Warm House”

Born October 16, 1968.

In 1996 he graduated from the Lesya Ukrainka Volyn State University (Teacher of history and socio-political disciplines).In 2007 graduated from Postgraduate School of Lesya Ukrainka Volyn State University of (Economy).

1997 to 1998 - leading expert of the Volyn Regional Center of Social Service for Youth of Volyn Regional State Administration.

1999 to 2001 - served as a Head of department dealing with youth of LutskExecutive Committee and Deputy Head of Internal Policy of the Volyn Administration.

2002 to 2005 - Member of Parliament of Ukraine, member of the Committee of the Verkhovna Rada of Ukraine on construction and local governments.

2005 to 2007 - Head of the Volyn Regional State Administration.

2007 to 2008 - Advisor to the President of Ukraine.

2008 to 2009 - Senior Consultant of the Analysis and Prediction Department of the Main Service for organizational support of the Secretariat of the President of Ukraine.

2010 to 2011 - Head of the Centre of Municipal Reforms “Lutsk - 1432.”State awards: orders “For Merits” of the III and II degrees, the Order of Danilo Galitskij.

The Component “Warm House” of the National Project “Energy of Nature”

Residential Fund of Ukraine, which requires immediate rehabilitation including more than 246 thousand apartment buildings housing and 23 thousand public sector buildings.

The entire territory of Ukraine.Pilot sites were identified by the criterion of different climatic zones-Berdyansk (Zaporizhia region), Zhovkva town (Lviv region)Novovolynsk (Volyn region), Cherkasy.

Complex modernization of heating systems and objects of consumption ofthermal energy, which includes rehabilitation of the apartment buildings (339 thousand m2), public sector facilities (75 thousand m2) and reconstruction of sources of supply and communications.

The approximate volume of investment for the pilot sites is 403 million UAH.

Upon the condition of implementing the volume planned and maintaining of forecast level of tariffs the payback period is 9 years.

Property investment:

Localization:

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Development of the Project in 2011:October 26, 2011 by the Order № 137 of the State Agency for Investment and National Projects of Ukraine the Inter-departmental Group for selection of components of the Energy of Nature National Project was established.

November 18, 2011 by the protocol solution of the Inter-departmental Group the project “Warm House” was defined as a component of Energy of Nature National Project.

November 17, 2011 by the Order № 158 of the Agency (with the aim of realizing of the project in the areas of socio-economic and cultural development) the State Enterprise “Warm House” was established within the New Energy National Project.

November 29, 2011 by the Order № 180 of the Agency the project “Warm House” was included into the State Register of National Projects as a component of the Energy of nature National Project.

Pilot sites were identified by the criterion of different climatic zones in Berdyansk (Zaporizhia region), Zhovkva (Lviv region) Novovolynsk (Volyn region), Cherkasy.

Plans and expected results:Realization of financial and legal mechanisms for attraction of investments in the projects of energy supply of buildings under Public-Private Partnership;

Begin the process of mass rehabilitation of buildings of housing and public sector;

Energy savings (gas, electricity);

Control of the growth of consumer expensesto heating in the long run;

Formation of the system of energy-efficientoperation of housing and public sector buildings.

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The Affordable Housing National Project - the system of projects of complex construction of affordable housing.

the system of projects of complex construction of affordable housing on the basis of public private partnership.

Pilot cities of the Affordable Housing National Project are: Kyiv, Odesa, Donetsk, Lviv, Kharkiv. After successful launching of the Project it is planned to expand its realization to next cities: Dnipropetrovsk, Ivano-Frankivsk, Kharkiv, Poltava and the Crimea. In subsequent years the Project will be implemented in all regions of Ukraine.

It is planned to build residential buildings as a block of houses – up to 16 houses of the same type with all necessary facilities (water, heat, power and gas supply, sewerage etc.).

In the framework of the project realization it is planned to build 9-storeyed houses, each of them consisting of 70 apartments with total area of 3827 m2. Total number of apartments for building is 1120, including 512 one-room apartments, 320 two-room apartments and 288 three-room apartments. The total area of apartments in a building is 59 264 m2.

Within the realization of the Project direct investment in the construction industry and related areas will be approximately 11.2 billion UAH.

Investment object:

Allocation:


Amount ofinvestment:

Project implementation period:

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Project development in 2011:The Working Group of the National Project and the State Enterprise “Affordable Housing National Project” analized the assets proposed by the regions, selected the land plots for residential buildings construction. Initial analysis of the suitable for affordable housing land plots was made in 17 regions.

The first 8 regions for affordable housing construction were selected (Kyiv, Sumy, Lviv, Kharkiv, Vinnitsa, Ternopil and Odesa). Feasibility study was developed by the State Enterprise “Ukrainian State Research and Planning Institute of Civil Rural Development”.

On November 23, 2011 at the meeting of the Cabinet of Ministers of Ukraine under the protocol decision № 86 the Decree of The Cabinet of Ministers of Ukraine “On approval of the preliminary feasibility study of the Affordable Housing National Project” was approved. The Agency was charged to complete the feasibility study considering the remarks made during the discussion.

On December 2, 2011 Head of the Agency Mr. Kaskiv jointly with Minister of Regional Development, Construction, Housing and Communal Services of Ukraine Mr. Blyznyuk applied to the President of Ukraine with a letter regarding further implementation of the Affordable Housing National Project.

Plans and expected results:Currently the Agency jointly with the Ministry of Regional Development, Construction Hous-ing and Communal Services of Ukraine with the participation of “Big 4” Companies works on the implementation of the Affordable Housing National Program to create an Integrated Resi-dential Fund, particularly in order to meet the needs of different authorities within the social initiatives of the President of Ukraine.

The aim of the Project is to improve public ser-vice through qualitative motivation of civil serv-ants and social support of citizens. The realiza-tion of the Project shall provide the creation of about 3000 new jobs.

32

Vitalii Serpokrylov Head of the Clear Water National Project.

Born June 1, 1970.

Graduated from Eastern Ukrainian State University as economist-manager and from Luhansk State University of Internal Affairs with the speciality of jurisprudence.

Since 1998 - Member of the Kirov City Council of Luhansk Region, since 2002 - Member of the Chervonogvard Village Council of Kirov City of Luhansk Region, since 2010 - Member of the Milovska District Council of Luhansk Region. Since 2007 - Assistant-consultant of the

Member of the Parliament of Ukraine.

Since 2011 - Head of the Clear Water National Project.

The Clear Water National Project - provision of the population of Ukraine with quality drinking water

Network of systems of purification and sale of water for collective use which will solve the problem of provision of the Ukrainian population with qualitative and inexpensive drinking water in proximity to places of residence.

The concept of the project envisages for the installation of equipment in close proximity to the residence of the population. Territorial coverage of outlets in frames of the project is national.The main criteria for selection of cities and locations:1. Coverage of all cities with a population of 100 000 residents;2. Coverage of the most attractive cities in terms of project payback of over 50 000 residents;3. Coverage of cities with population over 25 000 residents providing the project payback and significant environmental water pollution in the city;4. Coverage of other villages according to national security – significantly polluted areas.Within the pilot project primary network deployment is planned in the following cities: Mariupol, Luhansk, Odesa.

Nationwide network of up to 23 000 “water-machines” providing access to qualitative drinking water of 80% of the population of Ukraine.• Planned efficiency of one local system - 1500 l. / day;• Predicted coverage of one local system is 800 - 1200 households;• Predicted proportion of users among households to be covered is 20% -25%;• Estimated water cost – 40 kopecks for 1 litre.

Expenses for the pilot project deployment in 2012 – up to 189 million UAH.30% of investment expenditure of the Project’s first stage is funded at the expense of the state budget.

Total investment volume for the project implementation is 3 008 531, 0 UAH.Payback period of certain stages of the Project is 3 years at the cost for water commercialization 0.4 UAH/litre

Investment object:

Localization:

Investment object characteristic:

Investment volume:

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Project development in 2011:The state enterprise responsible for the imple-mentation of the National Project was estab-lished. The staff meeting with high qualification experience in implementing similar projects was formed.

Basic technologies were analyzed; the monitoring of the situation on drinking water supply in different regions of Ukraine is carried out.

The preparatory works were done and the feasi-bility study of the Clear Water National Project was developed.

15 cities-participants were selected (Alchevsk, Vinnytsia, Dnipropetrovsk, Zhytomyr, Zapor-izhia, Kyiv, Luhansk, Lutsk, Mariupol, Mykolaiv, Odesa, Rivne, Ternopil, Kharkiv, Kherson) to implement the Clear Water National Project.

Plans and expected results:The Project implementation involves three key stages:Stage 1. Launch

Analysis of the experience in the provision of the population with drinking water - Done

FS Development - Done

Establishment of the bank of locations. * The work has begun. Performance during 2012.

* Establishment of the bank of locations is one of the most complex and important links in the process of the Project implementation. The work involves interaction with representatives of au-tonomous bodies, approving authorities and communities’ representatives. Qualitatively se-lected influence locations directly the economic efficiency of the project and its payback period.

Investment attraction or receipt of the state funding in the amount required to meet the objectives of the Project in 2012.

Purchase of the equipment. Performance during 2012.

Installation and commissioning of the equipment. Performance during 2012. Beginning in 2013.

Stage 2. Further network deployment on a national scale.

Analysis of the experience gained during the pilot project implementation.

Work on the formation of the bank of locations. Performance in terms of the duration of the project. Total seats’ number is 23 - 27 thousand.

Work on the investment attraction. Performance in terms of the duration of the project. Total seats’ number is 23 - 27 thousand.

Network deployment pursuant to the main criteria of the locations selection.

34

Volodymyr Kozyavkin The Head of the InterMedicalEcoCity Project - the component of the City of Future National Project.

Born on June 9, 1947.Graduated from the medical faculty of the Grodno Medical Institute. The author of a conceptually new system of rehabilitation for patients with infantile cerebral paralysis, famous expert in the sphere of neurology and medical rehabilitation. The Member of the National Academy of Medical Sciences of Ukraine, Professor, Doctor of Medical Science, Honored Scientist and Technician of Ukraine. Hero of Ukraine.

Olexandr DudkaThe Head of the Piatykhatky Technopolis Project - the component of the City of Future National Project.


In 1992 he became a Head of JSC “Information-commercial network “PROMSNAB”. In 2007 up on request of the Kharkiv Regional State Administration the “PROMSNAB” developed a project of the creation of the industrial park “Rohan,” adopted for the implementation by the Kharkiv Regional Council.

The City of Future National Project - creation of strategic plan and system of projects for city development.

creation of innovative infrastructure and strategic planning of city development.

Currently the National Project is located in Kyiv, Kharkiv and on the Arabat Spit in Kherson Region.

Estimated indicators will be obtained after the development of the feasibility study.

The planned period of the Project realization is 10 years. The period of

realization and payback will be specified after the development and approval of the feasibility study by the Cabinet of Ministers of Ukraine and determination of the key parameters of the Project.

It is planned to attract investment in Kharkiv region of about 224.8 million USD or 1.8 billion UAH additionally through the creation of the territory of priority development - Technopolis Pyatykhatky with preferences for the implementation of innovative projects.

Investment Object:

Allocation:

Investment volume:

Terms of Project realization:

35

Project development in 2011:In cooperation with Kyiv City State Admin-istration, it is actively working on the devel-opment of the Master Plan “Kyiv 2025”, as a component of the City of Future National Project. The partner of this project is “Boston Consulting Group” (which has carried out development of strategic plans of New York, Boston, Singapore, St. Petersburg and Berlin).

On December 15, 2011 Kyiv City State Admin-istration adopted the Strategy of development “Kyiv 2025”.

In addition, the Inter-departmental working group, which deals with the selection of compo-nents of City of Future National Project, decided to include the following projects:

“Kyiv City” – the implementation of devel-opment projects in Kyiv and establishment of the business activity center;

“InterMedicalEcoCity” – a new inter-national medical rehabilitation settlement on Arabat Spit in Kherson region, which will spe-cialize in providing services for rehabilitation of adults, children, disabled people with neu-rological, gynecological diseases, patients with cerebral palsy, the effects of polytrauma in spe-cialized rehabilitation hospitals and creation of social, transport and other infrastructure for its operation;

“Technopolis “Pyatikhatki” – the es-tablishment of city for the development and implementation of innovative technologies, based on existing scientific and industrial in-frastructure of Kharkiv region.

Plans and expected results:Realization of experimental mechanism of re-gional development by creation of strategic plan, development projects and implementa-tion of pilot projects. It also will result in syn-ergies from the implementation of development projects in all sectors: construction, transport, tourism, culture and services. The significant expansion of employment rate and the growth of wages level is expected.

36

Oleg MalichThe Head of the Air Express National Project

Born on May 27, 1960.

Qualified as an economist at the Kyiv Institute of National Economy and Master of Public Administration at the National Academy of Public Ad-ministration under the Office of the President of Ukraine. After serving in the army from 1983 to 1988 services in authorities of internal affairs. From 1989 to 1998 he held leading positions in various commercial firms. From 1998 to 2002 – Head of the Vyshhorod District Council. 2002-2007 years – the Deputy Chairman of the Supervisory Board of JSC “Kyiv Mobile Mechanized Column-2”. Since 2007 – Representative

of the Ukrainian Parliament of VI convocation. Member of the BYuT fraction.

Boris OstapyukDirector of “The Directorate of Engineering and Management of Air Express National Project and other infrastructure facilities in Kyiv region”


In 1987 graduated from the Dnipropetrovsk Institute of Railway Engineers, in 2001 – Dnipropetrovsk State Technical University of Railway Transport, in 2003 – Academician V. Lazaryan Institute of Special Education of the Dnipropetrovsk National University of Railway Transport. His career started in 1987, he was a brigadier of

main railway departments of Lviv Railway Depot. Since 2000 – Deputy Director, Director of the State Enterprise of logistics rail transport of Ukraine “Ukrzaliznychpostach”. Since 2002 – First Deputy of Director of the Main Passenger Department of “Ukrzaliznytsya”, Head of General Logistics Department of “Ukrzaliznytsya”. From 2005 to January 2010 - Deputy General Director of “Ukrzaliznytsya”, from January to April 2010 – Head of State Enterprise “Donetsk Railway.”

The Air Express National Project – the passenger railway service from Kyiv to Boryspil International Airport and construction of other infrastructure facilities in Kyiv region.

Passenger railway service from Kyiv to Boryspil International Airport;

City ring road around Kyiv from Stolychne Shose street to M-03 Kyiv – Kharkiv – Dovzhanskiy highway on section Kyiv – Boryspil;

Road Construction from Podolsky bridge across the Dnipro to the Vatutin avenue with the construction of transport interchanges at landfall in tract from Gorbachiha to Podolsky bridge across the Dnipro in Kyiv.

Kyiv and Kyiv region.

Investment object:

Location:

Air Express

37

Project development in 2011:In 2011 State Enterprise “Directorate of Engi-neering and Management of Air Express Na-tional Project and other infrastructure facilities in Kyiv region” and China National Machinery and Engineering Corporation signed an agree-ment about the implementation of the Air Ex-press National Project.

In December 2011 the Technical Contract on the organization of passenger railway service from Kyiv to the Boryspil International Air-port was transmitted to the Chinese party. On December 28, 2011 the building of high-speed passenger railway service Kyiv – the Boryspil International Airport was launched.

Plans and expected results:Strengthening of competitive position of the Ukrainian air carriers, implementation of the best European and international standards in the sphere of passengers’ serving, improvement of infrastructure of the region, growth of investment inflow and tourist attractiveness of the country. Significant improvement of servicing from reception and departure of passengers, creation of new jobs.

According to the Resolution of the Cabinet of Ministers of Ukraine #335 d. March 28, 2011 the main characteristics of the passenger railway service from Kyiv to Boryspil International Airport are the following:• Length of the route, kilometers - 37.4• Time of train moving, minutes - 41• Number of stop-points, units - 2• Length of the railway overpass, kilometers - 3.5

Total amount 372 313, 538 USDAmount of investment:

Description of investment object:

Air Express

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2.2. One-Stop-Shop (InvestUkraine)

Serhiy YevtushenkoDirector of One-Stop Shop Department (InvestUkraine)


Graduated from National University of “Kyiv-Mohyla Academy” as an economist, political scientist.

Has over 7 years’ experience in the sphere of invest-ment banking and consulting business – took part in many M&A contracts, consulted companies in the sector of finance, insurance, FMCG, construction materials etc.

Former Advisor to the Minister of Foreign Affairs of Ukraine, Chairman of the Committee on Eu-ropean Integration of Ukraine.

In the period from July 2010 to July 2011 – held the position of the Head of the State Agency of Ukraine for National Projects.

He headed SE “Invest Ukraine” in the National Agency for Investment and Development of Ukraine, was engaged in the analysis and selection of investment proposals for forming national strategic projects portfolio.

He established and led the non-governmental analytical centre “Institute of Euro-Atlantic Coop-eration”.

From October 12, 2011 is a Director of One-Stop-Shop Department of the State Agency for Invest-ment and National Projects of Ukraine.

Speaks English and Polish fluently, German is basic.

On December 1, 2011 in Ukraine, a new service for investors was launched – One-Stop Shop Department, which is responsible for invest-ment promotion. This set of services for inves-tors is positioned for the international commu-nity as a brand “InvestUkraine”.

InvestUkraine is a mechanism for supporting individual investors, i.e. investors may receive information, analytical and legal services, sup-port in organizing visits, services for selection of site for investment, assistance in cooperation with local authorities and aftercare service.

InvestUkraine is investor’s first contact point in Ukraine. Due to this mechanism the investor’s way to the market is reduced from 2-3 years to 6-9 months.

InvestUkraine methods of work are based on the experience of leading agencies for attracting private funds and therefore it puts high stand-ards of work. They are the following:The first reaction to the investor’s request - 24 hours.Preparation of basic analytics - 1 week.Preparation of comprehensive analytical and market research - 4 weeks.Selection of location for the investor’s project - 6 weeks.

Facing the world economy globalization, Ukraine has to compete for foreign investors and InvestUkraine is one of the instruments of Government to ensure the competitiveness of Ukraine to fight for every investor, and there-fore for new technologies and new jobs.

The concept, mission, expectations:

39

In order to present a new service for personal support of investor, on December 1, 2011 in Kyiv, the presentation of the InvestUkraine’s concept and main services, provided by Inves-tUkraine for members of the international busi-ness community, diplomatic corps, international economic organizations operating in Ukraine, and representatives of regional authorities was held.

With the same purpose, the representatives of InvestUkraine participated in several Road Shows held by the State Agency for Investment and National Projects of Ukraine in Austria, Korea, China and Japan; the information about One-Stop Shop mechanism was presented during the visit of the official delegation of Ukraine, headed by Deputy Prime Minister of Ukraine, Minister of Social Policy of Ukraine S.Tigipko to France, and during the International Conference “InvestConference In Kyiv - 2011” under the patronage of President of Ukraine, held in Kyiv on December 9, 2011.

In January 2012 among the main results of the One-Stop Shop Department in the sphere of at-tracting FDI to Ukrainian economy is signing of eight memorandums of understanding with the companies, which declared their firm inten-tion to realize specific investment projects in Ukraine. Total volume of investment is 4.5 bil-lion USD, including 2 projects in the mining industry, 4 – in agriculture and food industry, 2 – in a chemical industry. The geographical context of investment inflow - Western Europe, Asia and North America.

Within three months from launching Inves-tUkraine is actively engaged into the develop-ment of partner network, which includes busi-ness associations, world-known consulting and law firms, and representatives of diplomatic corps, as well as international and regional spe-cialized organizations etc. As of January 2012 InvestUkraine has a partnership agreement with world-known law firm Baker & McKenzie, con-sulting companies of Big Four, Rödl & Partner audit firm and SigmaBleyzer investment fund etc. Due to the partners’ support InvestUkraine plans to increase the number of investment in-quiries and improve the quality of services pro-vided for potential and existing investors.

One of the practical results of productive co-operation between InvestUkraine and partners for a short period of its activity is the develop-ment of qualitative and necessary legal informa-tion for potential investors about the business environment in Ukraine, - “Investor’s Guide.” Now “Investor’s Guide” consists of eight the-matic brochures:1. Foreign investment in Ukraine,2. Setting up business in Ukraine,3. Taxation in Ukraine,4. Real estate and construction in Ukraine,5. Employment in Ukraine,6. Intellectual property rights in Ukraine.7. Customs regulations in Ukraine,8. Financial services and insurance.

InvestUkraine will meet the needs of investors and expand “Investor’s Guide” by the relevant themes.

To the existing list of marketing materials that were developed jointly with partners, the reviews of sectors of Ukraine will also be added. These reviews will provide investors with general in-formation on the status and prospects of the in-dustry, its investment attractiveness, Ukraine’s competitiveness in a particular area etc. In the process of positioning InvestUkraine for inves-tors as the first contact point in Ukraine, there is an important tool –a web site:

www.investukraine.com,

developed and operated by InvestUkraine team.A significant contribution to the effective opera-tion of InvestUkraine in the process of attract-ing investment is constant professional develop-ment of its team. InvestUkraine examines best practices of FDI attracting, standards of work with potential and existing investors, promot-ing the investment potential of their countries, etc., while participating in various programs to improve the institutional capacity of agencies for investment attracting, conducted by experts of international technical assistance projects of Eu-ropean Union and the United States (particu-larly, a program of sharing the EU experiences - “Twinning” and the project “Local Investment and Competitiveness”(LINC) of the USAID).

The results of 2011, plans for 2012

40

In 2010-11 the Department has issued a num-ber of products that can fundamentally change the attitude of investors to Ukraine. Category of National Projects consists of the programs and projects with high payback and state support pro-vided. The goal of investment marketing in 2011 was the effective promotion of these projects in the investment sphere as the best investment op-portunities.

Within the process of preparing and passing vari-ous stages of products mentioned in 2011, the Agency organized in Ukraine more than 30 pub-lic events for the business community, public and media to promote and inform on the National Projects’ realization. In addition, last year over 20 new marketing products - brochures, booklets etc. were prepared. In particular the following brochures “Why Invest”, “Where Invest”, “How Invest” (Invest in Ukraine) were widely recog-nized as those that appeared in Ukraine since its Independence for the first time.

Investment marketing is one of the main direc-tions of the Agency’s activity. In 2011 the Agen-cy launched a systematic marketing that focuses on results and the target groups of customers. Systematic work of marketing on the realiza-tion of key strategic objectives of the Agency includes:

Significant improvement of the investment cli-mate by means of promoting the best invest-ment opportunities.

Promotion of strategically important projects (National) as priorities for investment.

Highlighting and promoting the best invest-ment opportunities at the sectoral and regional levels.

Development of InvestUkraine Brand and its promotion to external markets.

Olexandre YurchakHead of Investment Marketing Department

Born on June 20, 1965.

In 1988 graduated from Kyiv Polytechnic Institute, qualification – Engineer, in 2003 graduated from Chartered Institute of Marketing (UK), qualification - Marketing Manager.

Has more than 17 years’ experience at leading positions in the sphere of marketing and sales. He has been working in the international company Schneider Electric for 11 years, in large Ukrainian industrial companies – for 5 years. Worked at foreign companies, is an expert on Europe and CIS markets. Fluent French and English. Actively practices and develops the best marketing standards in Ukraine, the author of numerous articles. Has the international status of Chartered Marketer.

Since September 2011 has been working at the State Agency for Investment and National Projects of Ukraine.

The strategic objectives of investment marketing

The main events and campaigns in 2011

The beginning of the promoting the agency’s products

2.3. Investment marketing

41

The world Road-Show of the National Projects as a major marketing campaign was holding from October 31 till December 19, 2011.The Road-Shows covered four continents, 11 countries and 15 world financial centers:Europe: London, Vienna, Frankfurt am Main, Madrid;

USA: New York, Houston, Chicago, Washington;

Middle East: Istanbul, Kuwait, Abu-Dhabi;

Far East: Tokyo, Osaka, Seoul, Shanghai.

In general more than 1 000 visitors from 910 foreign companies visited the Road-Shows. Among them such world leading companies

as Barclays Capital, Citigroup, Bank of America Merrill, Lynch, Societe Generale, Exxon Mobile, Morgan Stanley, Commerzbank AG, Velatel, Pricewaterhouse Coopers AG, Baker & McKenzie, HSBC, Halliburton, Vanco Exploration Company, Chavron, Deloitte, SigmaBleyzer,Dieselpoint, Shelton Petroleum, Abu Dhabi National Oil Company, Interpipe, GE Energy, Mitsubishi Corporation, Sumitomo Corporation, Japan Tobacco Inc. , Yokogawa Electric, Daewoo E & C, Samsung, POSCO, Hyundai Corporation, LG Electronics and others.

During the road-shows 62 bilateral negotiations with foreign companies were held.

Road Show: marketing campaign abroad 2011

42

The praiseworthy comments expressed during the Road-Shows are an evidence of great interest to the investment potential and future of Ukraine:

Michael GrimmU.S. Congressman from New York State

“Ukraine is among the top five most emerging economies of the world, along with such countries as China, India and Singapore. The U.S. should pay attention to the potential of Ukraine, because there are many opportunities for cooperation between our two countries. “

Morgan WilliamsThe President of the USUBC

“This year will become a turning point for the part-nership between Ukraine and the USA. Everything Ukraine needs (new jobs, funds for restructuring the infrastructure etc.) will come from the private business. We do believe in the prosperity of Ukraine, therefore last year we invested 100 million of the US dollars to agricultural sector, and have a plan to invest in future. We put special hopes on the devel-opment of the energy sector. Many U.S. companies already operate on the Ukrainian market and are very interested in this sector, in particular Shell, Exxon Mobile, Chevron. Therefore, we expect at least $ 1 billion USD of investment to the energy sector of Ukraine this year”.

Thomas MirowPresident of the European Bank for Reconstruction and Development

“Relations between the EBRD and Ukraine are long-standing and close: since 1992 the Bank has signed nearly 300 projects with a total investment amount of 7 billion euro. We remain deeply committed to Ukraine today: now the country ranks second place among the partners of the EBRD in terms of annual investment.

Since then we have doubled our investment in 2008 and have signed worth more than 1 billion euros annually.

During the past two decades, Ukraine has come a long way. The country has made greatsuccess in building the government institutions and establishing of market economy as well as establish-ing of democracy in the region that suffered from authoritarian rule. By some measures of privatization, price liberalization and trade transparency, Ukraine is one of the most advanced reformers in the region.

43

Abdulwahab Ahmed Al-BaderKuwait Fund for Arab Economic Development

“National projects are very large-scale and may at-tract investors of all types. We have a long history of cooperation with Ukraine. Today the delegation of the Agency presented us new investment opportuni-ties of Ukraine. As an organization that primarily deals with financing and the provision of loans for development, we are interested in the projects of infrastructure development. We have great expecta-

tions concerning the development of Ukraine and wish success to your mission. “

The main result of the road-shows is establishment of contacts with a series of leading companies andsignificant increase of the investment image of Ukraine in the countries of the road-shows.

Kim Pon KwonVice-President of the Korea Trade-Investment Promotion Agency (KOTRA)

“ Today many countries actively mobilize their in-vestment to Asia and Eastern Europe. In this case Ukraine has currently a great potential in the region of Eastern Europe. “

Michael PolskiFounder and President of Invenergy,

New Energy Opportunities

“It’s extremely pleasant to see that new generation of people with a new mentality and new ideas are responsible for implementation of positive changes in Ukraine’s economy. Each project , proposed by the State Agency, is also new for cooperation be-tween Ukraine and the U.S. due to its scale and significance. These projects are planned for years of cooperation providing a stable and transparent partnership”.

Currently Ukraine is at an important historic juncture. We extremely hope that Ukraine will be able to overcome the practical and political obstacles to strengthen institutional and economic relations with the EU and reduce barriers for investment that will be essential for modernizing the economy and reaping the benefits of access to the vast European market. As a long-term partner, we continue to encourage Ukraine to solve these issues. The international community and international investors should emphasize the readiness of Ukraine for development because the country has huge economic potential. The way we and international community will carry the dialogue with Ukraine, it will influence its future”.

44

Media campaign accompanied the road-shows from the end of October 2011 and was aimed at attracting attention and awareness of the target audiences at the investment opportunities of Ukraine. The campaign included the display of the image-building videos on TV, advertising in the onboard magazines of the leading airlines, online advertisements, articles and interviews of the leadership of the Agency in the press.

In general the following was done: 225 outputs of the commercials on Bloomberg and Euronews channels.

310 outputs of the commercials on national channels (Inter, ICTV, 5 Channel, UT-1)

67 outputs of the advertising inserts in print media, including 12 publications in onboard magazines of the leading airlines such as Lufthansa, British Airways, Emirates, American Airways, etc.)

location of advertisement on the 300 billboards and city lights

location of the banners on the 33 internet sites

articles and interviews (as the results on the road-shows) - 19 interviews, about 500 publications in leading global print and electronic media, about 40 publications in the information agencies and about 30 stories on top TV channels.

International Investment ConferenceINVESTCONFERENCE IN KYIV 2011 launched new format of business communication for the business community on the top state level. Di-rect dialogue between the state top management and investors is aimed at the discussion of the most crucial issues of the investment environ-ment and development of Ukraine, including regional development.

The conference was held on December 9, 2011 and consisted of a discussion of 4 key issues re-form of the economy under the world crisis:

external and internal factors; the investment potential of Ukraine and Central Eastern Eu-rope;

competitive advantages of doing business;

investment climate and implementation of the national projects.

In the framework of the conference discussion on “Public-private partnership. Investments for regional development” was held. Over 300 guests took part in the conference, among them are representatives of multinational companies, international organizations and Ukrainian busi-ness groups.

Media campaign abroad and in Ukraine

International Investment Conference in Kiev

45

Creation of the multi-lingual informational web portal www.InvestUkraine.com is aimed at informing investors and other stakeholders about Ukraine, its investment potential and opportunities for investment. The portal was launched in November, 2011. The initial version is in Ukrainian and English and contains the information on services, products and projects of the Agency. In 2012 the portal will be further developed.

Creation of a rating system of regions ratings gives an opportunity to accelerate regional in-vestment development and identify the best in-vestment opportunities. The main task of the investment marketing of the Agency in this area is to promote the regions and their investment opportunities.

In 2011 a first evaluation of the investment at-tractiveness of the regions was made. The top places were taken by Dnipropetrovsk, Luhansk, Zaporizhzhya regions and the city of Kyiv.

In 2011 the Agency has actively implemented some other forms of investment marketing such as participation in numerous forums and confer-ences, conducting of the visits to the potential investors, development of relations with the key partners, cooperation with an international or-ganizations and marketing of the new services within the “One stop-shop”.

The measures for 2012 are aimed at full im-plementation and confirmation of the results of 2011.

They include:

Continuation of the road-shows abroad with more emphasis on target countries and invest-ment centers.

Media and public relations campaign in Ukraine intended to change the opinion of domestic players- analysts, financiers, experts and con-sultants on investment and asset management,about the investment climate and opportunities in the country.

Promotion of the web portal as an effective tool of influence, information and services.

Holding of the sector-based national investment conferences.

Participation in the major international and Eu-ropean investment exhibitions and conferences.

These measures are aimed at identifying barriers and practical problems of investing in Ukraine, as well as finding ways for tackling these prob-lems including national and international ex-perts. As a result, significant improving of the investment rating of Ukraine and increase of investments is exposed in 2012.

Launching of “Invest Ukraine” web portal

Creation of a rating system of investment attractiveness of regions

Activities and Plans for 2012

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3. Rule-making activity

Andriy GalushchakDirector of Legal Department

Born on January 19, 1974.

Received higher legal education at Precarpathian Na-tional University named after V.Stefanyk (cum laude). He has worked as the advisor to the Head of Ivano-Frankivsk Regional Council, as the Head of Legal De-partment of the Executive Committee of Ivano-Frankivsk City Council, as the Advisor to the Mayor.

From 2005 to 2006 – Deputy Director of Legal Department of the National joint-stock company “Naftogaz of Ukraine”. From 2007 to 2011 - Member of the Supervisory Board of JSC “UKRGAZ-ENERGO”, from 2008 - Head of Legal Department of LLC “Gazprom SALES UKRAINE”. Since 2011 - Advisor to the Head of the State Agency for Investment and National Projects of Ukraine.

He was awarded the Order of Merit of III degree.

Draft law of Ukraine “On National Projects of Ukraine” - defines legal and economic prin-ciples of business relations in the sphere of preparation, implementation and realization of National Projects that are of priority for Ukraine’s economic development.

Under this draft law, the National Project is a set of activities prepared and approved pursu-ant to this Law.

The social implementation of these activities is of strategic importance for economic develop-ment or social sphere and is a priority for the state or its individual regions.

The draft law also specifies general require-ments for National Projects, namely:strategic importance for economic development of Ukraine, its particular branch, social sphere or its separate territory;promotion of innovative development of Ukraine;positive impact on economic and social life of Ukraine;possibility of technical realization.

Draft law of Ukraine “On Ukrainian Develop-ment Bank” is intended to create legal condi-tions for the formation of the Ukrainian De-velopment Bank. Its mandate will include:granting long-term and medium term loans in local and foreign currency for the implementa-tion of government programs, National Pro-jects and their components, as well as invest-ment and innovative projects that will ensure rapid economic growth;support of targeted development programs of particular branches, small and medium enter-prises, promoting investment activities aimed at infrastructure development.

Draft Laws of Ukraine

1. 2.

47

Resolution of the Cabinet of Ministers of Ukraine dated 15.06.2011 № 674 “On approv-ing the use of funds provided by the state budg-et for the development of design estimate docu-mentation, feasibility studies (their inalienable components) of National Projects, including the formation of statute capitals of state-owned en-terprises responsible for implementing National Projects”;

Resolution of the Cabinet of Ministers of Ukraine dated 15.06.2011 № 675 “On amend-ments to paragraph 2 of the Directions of use of funds provided by the state budget for state support of innovative and investment projects in the real economy through the mechanism of easing of credit”;

Resolution of the Cabinet of Ministers of Ukraine dated 15.06.2011 № 680 “On approv-ing the Directions of use of funds provided by the state budget to implement the measures to create a network of regional perinatal cent-ers, equipped with innovative technologies and modern equipment”;

Resolution of the Cabinet of Ministers of Ukraine dated 15.06.2011 № 694 “On ap-proving the use of means provided by the state budget to implement the measures of positive investment image of Ukraine”;

Resolution of the Cabinet of Ministers of Ukraine dated 19.09.11 № 982 “Certain aspects of the “project Infrastructure facilities of Kyiv region”;

On January 1, 2012 the Law of Ukraine “On preparation and implementation of invest-ment projects according to One-Stop-Shop principle” came into effect. The provisions of the Law are declarative, thus the statutory wording is impossible to execute. These results are confirmed by many Ukrainian and foreign experts. In particular, the recommendations of International Finance Corporation (IFC) in Ukraine prove that the most appropriate option of action would be to withdraw this law, be-cause in its current version it can not contribute to the expected investment stimulus in Ukraine.

In order to eliminate the drawbacks the Agency in cooperation with the members of Parliament elaborated a draft law of Ukraine “On Amend-ments to the Law of Ukraine “On preparation and implementation of investment projects ac-cording to a one-stop-shop principle”, which in due course will be submitted to the Verkhovna Rada of Ukraine.

Draft law of Ukraine “On the industrial parks of Ukraine” will provide an opportunity to cre-ate industrial real estate market, reduce time for investors to market from 2 to 3 years to 6-9 months. In 4-5 years it is expected to attract into the investment projects 14-15 billion USD, and create about 300 thousand working places.

On March 22, 2012 the Verkhovna Rada of Ukraine adopted the Law.

Draft amendments to the Law of Ukraine “On public-private partnership” will attract investment into assets that are not subject to privatization. Taking into account the short-age of public funds, the inflow of additional investment will be especially important to im-prove municipal and transport infrastructure.

The Agency continues to study the international experience of using the public-private partner-ship mechanism. The amendments to the Law of Ukraine “On public-private partnership” are being prepared.

Resolutions of the Cabinet of Ministers of Ukraine adopted by the initiative of the Agency

1.

2.

3.

4.

5.

3. 4.

5.

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Resolution of the Cabinet of Ministers of Ukraine dated 19.09.11 № 999 “On approval of the State Register of National Projects”;

Resolution of the Cabinet of Ministers of Ukraine dated November 16, 2011 N 1208 “On Amendments in addition to the Cabinet of Ministers of Ukraine dated December 8, 2010 N 1256”.

Draft resolution of the Cabinet of Ministers of Ukraine “On approval of the State Target Economic Program of investments activities for 2011-2015” aimed at enhancing of invest-ment activity, boosting investment in economic and social development, implementation of economic restructuring and improving indus-try competitiveness, sustainable development of territories.

Draft resolution of the Cabinet of Ministers of Ukraine “Some aspects of preparation for implementing the national project” Afford-able Housing”– system of projects of com-plex construction of affordable housing'. This resolution determines realization of the Affordable Housing National Project.

November 23, 2011 the Cabinet of Ministers of Ukraine adopted the resolution.

Draft resolution of the Cabinet of Ministers of Ukraine “Certain aspects of preparation for implementing the Open World National Project - creation of information and com-munication educational network at the na-tional level based on radio access technol-ogy of the fourth generation (4G)”. This resolution determines the mechanism of par-

ticipation of the state and regulatory bodies in the implementation of the Open World Na-tional Project as well as the possibility of creat-ing favorable conditions for attracting private investment into the project realization.

November 23, 2011 the Cabinet of Ministers of Ukraine adopted the resolution.

Draft resolution of the Cabinet of Ministers of Ukraine “On approval of the modal contract on realization of the investment project of reconstruction of districts (neighborhoods) of obsolete housing” – adopting draft resolu-tion will contribute to the implementation of state policy in the comprehensive reconstruc-tion of districts (neighborhoods), reconstruc-tion of old districts, development of urban infrastructure, right of citizens of Ukraine on dwelling, increase of housing construction, re-plenishing local budgets after commissioning the restored infrastructure obsolete areas; set-tlement of issues arising when providing re-construction by local government, replacement of housing in determination of liability and re-sponsibility for their failure by the participants of the reconstruction.

Draft acts of the Cabinet of Ministers of Ukraine

6. 7.

1.

2.

3.

4.

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Draft resolution of the Cabinet of Ministers of Ukraine “On amendments to paragraph 6 of the Directions for removal of trees, shrubs, lawns and flowers in the settlements” - im-plementation of the draft resolution will allow the implementation of the Air Express Nation-al Project - passenger railway service from Kyiv to the Boryspil International Airport and other infrastructure facilities of Kyiv region in full amount, with the rational use of public funds and credit and achieve a reduction of payback period of Air Express National Project.

Draft resolution of the Cabinet of Ministers of Ukraine “On amendments to the use of funds provided by the state budget for state assistance in order to implement National Projects on a co-financing basis”- the adop-tion of the act is needed to ensure public sup-port for investment projects in real economy on terms of co-financing.

Draft decree of the Cabinet of Ministers of Ukraine “On Amendments to the Decree of the Cabinet of Ministers of Ukraine dated December 18, 2003 № 779”, aimed at improv-ing the evaluation system of central and local authorities in the field of investment activity. The draft act provides the implementation by the Agency of an annual comprehensive com-parative sociological research of the investment climate and investment attractiveness of regions. The Act is submitted for consideration to the Cabinet of Ministers Ukraine.

5.

6.

7.

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4. International Activity

Igor ZhovkvaDirector of Department for International Cooperation

Born on October 22, 1979.

In 2001 graduated from the Institute of International Relations of Taras Shevchenko Kyiv National University (cum laude).

In 2005 was conferred as the Ph.D. in Political Science.Since 2007 has been teaching in the MFA Diplomatic Academy of Ukraine.

In 2002 - the assistant to the Head of the European integration Committee of the Verkhovna Rada of Ukraine.

From 2002 to 2008 – Chief Consultant, Head of Division, Deputy Director of the Department of the Foreign Policy directorate in the Administration of the President of Ukraine.

From 2008 to 2010 – Chief of Staff of the Deputy Prime Minister of Ukraine.From September 2010 to June 2011 - Director of the National Projects Department in the State Agency of Ukraine for National Projects.

Since June 2011 – Director of FDI and International Cooperation Department in the State Agency for Investment and National Projects of Ukraine.

Igor Zhovkva has the third rank of civil servant and diplomatic rank of the advisor of the First class.

Presentation of the investment opportunities and implementation of the National Projects of Ukraine to the foreign business circles was carried out through organization of foreign vis-its of the Head and representatives of the State Agency for Investment and National Projects of Ukraine, participation in official visits of the Prime-Minister and the President of Ukraine, participation in international business forums, conferences etc.

In particular, within the year foreign visits on official delegations were paid to the Republic of Poland, the People’s Republic of China, Russian Federation, USA, France, Hellenic Republic, Cuba, Brazil, Singapore, Vietnam, Brunei, Turk-menistan, Turkey, Israel, Lebanon, Montenegro, Jordan, Lithuania, Latvia, Azerbaijan. In order to conduct the presentations of the National Projects (road shows) the Ukrainian delega-tion has visited the United Kingdom, Austria, Germany, Spain, USA, Turkey, Kuwait, United Arab Emirates, Japan, Korea, China.

During 2011 the Head and representatives of the State Agency for Investment and National Projects of Ukraine presented the investment opportunities of Ukraine during such Business Forums as: Ukrainian Business Week 2011; 7th Annual Adam Smith’s Conference “Ukrainian Investment Summit” (London); Ukrainian Busi-ness Conference in frames of the Economic Day of Ukraine (Gelsenkirchen, Germany); Ukrain-ian-Singapore Business Forum; Ukrainian-Viet-namese Business Forum; Ukrainian-Mongolian Business Forum; Ukrainian - Armenian Busi-ness Forum; Ukrainian-Cypriot Business Forum; Ukrainian-Turkmen Business Forum; Ukraini-an-Greek Business Forum; Ukrainian-Slovenian Business Forum; Ukrainian-Tajik Business Fo-rum; Ukrainian-Azerbaijani Business Forum.

Foreign visits

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Within 2011 the State Agency for Investment and National Projects of Ukraine signed ten Memoranda of cooperation with foreign invest-ment agencies, aimed at facilitating information exchange concerning new projects and programs in the sphere of investment activity and bilat-eral trade.

The Agency concluded memoranda with the following institutions: Polish Information and Foreign Investment Agency, Ukrainian-Polish Chamber of Commerce, Vietnam Investment Agency, The Ministry of Commerce of the Peo-ple’s Republic of China, Greek investment agen-cy “Invest in Greece”, the Brazilian Trade and Investment Promotion Agency, Center for In-vestment Israel “Invest in Israel”, the Republic of Turkey Prime Ministry Investment Support and Promotion Agency, Investment and develop-ment agency of Latvia, Lithuanian Development Agency, Russian Federation Vnesheconombank, Azerbaijan Export and Investment Promotion Foundation, Jordan Investment Board. Besides, memoranda of cooperation with two projects of international technical assistance were signed, implemented with the financial support of U.S. Agency for International Development: project on the public-private partnership development and LINC project.

In 2012 Memoranda of Understanding with investment agencies of Azerbaijan, Lat-via, Lithuania, Jordan and Russian Federa-tion Vnesheconombank were signed. It is also planned to conclude Memoranda of Under-standing with investment agencies of Bulgaria, Denmark, Estonia, Slovenia, Hungary, Serbia, Jordan, Lebanon, Kuwait, Russian Federation and Moldova.

During 2011 representatives of the Agency took part in the intergovernmental bilateral commis-sions of such countries as Israel, Japan, Vietnam, Slovenia, Lithuania, Saudi Arabia, Serbia, Mol-dova, Turkey, Hungary, France, Estonia, Czech Republic, Germany, Belarus, Korea, China.

Memoranda of Cooperation

Participation in the intergovernmental bilateral commissions

52

In 2011 the Agency carried out activity on the membership in the Investment Committee of the OECD, preparation of Investment Policy Review and Sectoral Competitiveness Review. Thus, Director of FDI and International Co-operation Department Mr. Zhovkva took part in the session of the Investment Committee on March 22, 2011 in Paris (France). During the session the Review of investment policy of Ukraine with a detailed description of the in-vestment climate, in-vestment regime, par-ticipation of the state authorities in the in-vestment attraction was presented and discussed.

On September 5-7, 2011 the Head of the Agency Mr. Kaskiv and the Director of FDI and International Coopera-tion Department Mr. Zhovkva paid a working visit to Paris to the headquarters of the OECD with the aim to hold bilateral meetings with OECD management. The Agency expressed willingness to become the National contact point in the framework of Ukraine’s membership in OECD Investment

Committee and assist Ukraine’s accession to the OECD Declaration of International Investment and Multinational Enterprises.

The accession to the OECD Declaration of International Invest-ment and Multinational Enterprises provides our country with a range of additional tools includ-ing the aspect of col-laboration with foreign investors. Key princi-ples of the Declaration present distinct recom-mendations for enter-prises operating in the country that accede to the Declaration, includ-ing recommendations regarding information availability about their activity, protection of workers’ rights, envi-ronmental protection, fight against corruption, protection of consumers, research and technolog-

ical developments, competition etc. Therefore, on acceding the Declaration Ukraine introduces in its territory unified recommendations under which multinational enterprises shall operate in Ukraine the way they operate in state members of OECD.

The Director of FDI and International Coopera-tion Department held a meeting with Executive Secretary of UNIDO on June 15-17, 2011 in Vi-enna (Austria). During the meeting the Parties

discussed the possibilities of founding mission of UNIDO at the Agency. As a result of the meet-ing, UNIDO supported the idea of openning its full-fledged office in Ukraine.

In May 2011, Director of FDI and International Cooperation Department took part in the Review of project portfolio of EBRD in Ukraine. The Clean City National Project within “Municipal and Environmental Infrastructure” block was presented.

During the road show in London on October 31, 2011 (see Road Show chapter), EBRD representative declared the readiness of the Bank to consider this project for the inclusion in the portfolio with a financing of 5-15%.

Cooperation with international organizations

Organization for Economic Cooperation and Development (OECD)

The United Nations Industrial Development Organization, UNIDO

European Bank for Reconstruction and Development

53

In 2011 the Agency was the beneficiary of three projects of international technical assistance.

Twinning project “Enhancing Performance of the State Agency for Investment and National Projects of Ukraine in line with best EU prac-tices”.

The project was financed by the European Un-ion from November 2009 to December 2011.

The main result of the project is adoption of European experience in foreign investment at-traction, in the development of systematic and structured database of investment projects. An-other important result is that the employees of regional centers of the Agency enriched their knowledge concerning the direct work with in-vestors. This experience is actively used since January 1, 2012, when the Law of Ukraine “On preparation and implementation of investment projects under the Principle of One-Stop-Shop came into effect. The Law provides equal rights and legitimate interests of investors, transpar-ency of documents’ issue, enabling them to im-plement investment projects and obtain infor-mation, analytical, legal services as well as the assistance in cooperation with local authorities.

Two countries of the European Union – Poland and Germany were the partners of the Agency within this project. The staff of the Agency got diversified and valuable experience as Poland and Germany have different national systems for foreign investment promotion. This project offered an opportunity to assess real situation in the investment activity sphere in Ukraine and clearly define the priorities of the new Agency.

Besides, the Agency is the beneficiary of two oth-er projects – “Program of Public-Private Part-nership Development” and “Support of Small and Medium Business by Granting a Credit”, the donor of the projects is the U.S. Govern-ment through the U.S. Agency for International Development.

The Agency actively cooperates with the Agency for International Business Promotion and Coop-eration of the Netherlands, joint collaboration is aimed at the launch of technical assistance project “Study of the Netherlands experience in the sphere of foundation and functioning of venture capital with the state participation and/or assistance”. The Agency also cooperates with the Agency of International Cooperation at the Ministry of Economy and Finance of France (ADETEF) with the purpose of concluding the Framework agreement on cooperation.

Cooperation with international technical assistance projects

54

5. Activities in the Regions

Vasyl FedyukDirector of the State Investment Policy and Regional Development Department

Born on June 18, 1961.

Graduated from Yuriy Fedkovych Chernivtsi National University and Interregional Academy of Human Re-sources. He is an aspirant for the Candidate of Economic Science of the National Institute for Strategic Studies under of Ukraine

Mr. Fedyuk is a specialist in business management, economic development, policy analysis, strategic planning. He had his own business, managed several private firms, regional economic development agency, Business Support Fund. Has a 10-year project management experience. He worked as a Di-rector of the European Integration and the Investment Policy Department of the Ivano-Frankivsk Regional State Administration,as a Director of the Foreign Investment Attraction Department of the National Agency of Ukraine for Foreign Investment and Development, as a Deputy Director of the National Projects Department of the State Agency of Ukraine for National Projects.

Since June 2011 - Director of the the State Investment Policy and Regional Development Depart-ment of the State Agency for Investment and National Projects of Ukraine. He has the fifth rank of civil servant.

The Head of the Agency declared fundamentally new approaches of the Agency to the investment development of the regions at the meetings of the Council of the regions under the President of Ukraine and the Committee on Economic Re-forms. Development of the investment potential, improvement of the investment climate, promo-tion and realization of investment opportunities of the regions are reflected in certain actions. They are determined at the increase of invest-

ment activity of the regions and the formation of professional approach to the work with inves-tors, which are crucial factors for investment at-traction and sustainable economic development of the country. Thus, in 2011 the Agency con-centrated its efforts on strengthening regional cooperation, formation of an effective network of regional centers for investment and develop-ment and preparation of investment proposals and projects, attractive for investors.

The Agency proposed regional leaders to use a new format of agreements which ensure obli-gations and responsibilities for the investment activity development in the regions instead of signing declarative memorandums which an-nounce intentions and regulate interaction be-tween central and regional level institutions. The subjects of agreements are:

Realization of the components of national and important regional investment projects;

formation and joint coordination of activities of regional centers for investment and development;

functioning of One-Stop-Shop at the regional level;

promotion of investment opportunities of the re-gions in Ukraine and abroad.

Regional cooperation

55

The agreements containing a list of specific pro-jects in the midterm are made during the di-rect working trips of the Head of the Agency to the regions. During the visits the meetings with local leaders and investors take place. The new investment areas are visited. Currently in-stalled cooperation Kharkiv, Lviv, Transcarpathi-an, Dnipropetrovsk, Chernivtsi and regional state administrations and regional councils, and also with the Kyiv City State. The agreements the implementation of the national projects and their components, support of the regional in-vestment projects, as well as specific measures to improve the investment climate in the regions and increase of their investment attractiveness. The leadership of the Agency and its about a dozen of regional investment forums and differ-

ent business events - presentations of the invest-ment opportunities of the regions. In particular, the Head of the Agency Mr. Kaskiv participated as a moderator at the XI International Economic Forum “Economic integration - National Priori-ties” held on October 14-15, 2011 in Truskavets. Representatives of 22 countries, including the USA, Germany, Russia, China, Canada, Italy, Switzerland, Kazakhstan, Georgia, Iceland as well as entrepreneurs and industrialists from the western region of Ukraine with a great interest discussed the new approaches of the agency on the foreign investment attraction in the regional development and National Projects implementa-tion. The Forum also identified the priority areas of cooperation of the Agency with the region.

At the invitation of local executive bodies and local authorities the experts of the Agency in the sphere of regional development and investment attraction take part in investment activities con-ducted at the initiative of the regions. Meetings with investors, discussion panels, professional moderation sessions and consultations held in the regions are the best platform for effective

management decisions to improve the investment areas. Kharkiv region is an example of interaction model between central and local executive bod-ies, local governments, investors, institutions in the sphere of local economic development and investment attraction, One-Stop-Shop at the re-gional level.

56

In frames of the International Conference “In-vestconference in Kyiv 2011” a regional section was held. Target audience, which is more than 100 representatives from the regions, was sug-gested practical tools to stimulate foreign direct investment in the regions of Ukraine. Interna-

tional experts and national practicians focused on issues of regional development, using tools of public-private partnerships, development of investment infrastructure, establishment and op-eration of industrial parks.

27 state budget institutions – regional cent-ers for investment and development fall within jurisdiction of the Agency. In 2011 began the process of “reload” and transition from the process-oriented activity to the result-oriented one.

The Agency jointly with regional authorities set a goal to establish powerful regional centers, staffed by competent professionals of invest-ment attraction activity. The regional centers

should accompany 5-10 projects (components of national and regional priority projects) si-multaneously.

The experts of the Agency proposed the ap-proach of organization of the regional centers, based on the best national and international practices of regional investment development; the approach got high approval of local gov-ernments and expert community.

At the end of the year open competition to select the heads of regional centers began. The competition was based on clearly defined cri-teria: education level, knowledge of foreign languages, experience in management, business and investment attraction spheres. Analysis of the applications proves great interest and high competitiveness of the candidates. Overall, af-ter pre-selection more than 60 participants passed for the finals of the competition.

The first success in 2011 on the implementa-tion of marketing of the areas of Ukraine re-flects the correctness of chosen strategy for re-gional centers’ development. In particular, the

professional coordination of regional centers’ activity provided quality training materials for participation in the contest European Cites & Regions of the Future 2012/13, conducted by fDi Magazine (Financial Times) which is one of the most respected editions in the foreign investment sphere1.

For the first time almost 20 Ukrainian cities/regions won or entered top ten in this prestig-ious competition, which is the recognition of investment attractiveness of Ukrainian regions by reputable experts.

Network of regional centers for investment and development

1fDi magazine makes selection of the cities and regions with the best perspectives for foreign investment attraction and local economic development. Representatives of the fDi magazine estimated more than 50 criteria from the expenses efficiency for doing business to the human resources potential and infrastructure.

57

Inventory of available investment opportunities in every region of Ukraine as well as definition of opportunities for financial support of regional projects and their promotion among potential investors have always been the main objectives of the Agency.

The experts of the Agency maintain current da-tabase of investment proposals, following the best foreign practices. They also perform analy-sis of the assets in all regions of the country. The potential investors will be offered:

Greenfield land plots;

Brownfield land plots;

Investment projects to be implemented, in par-ticular on the basis of the Public-Private Part-nership.

Experts of the Agency process approximately 400 project proposals that will be included to the database of projects to be implemented on the basis of public-private partnership. 2-3 land plots in most of the regions were determined for the establishment of industrial parks. Suggested investment proposals will be displayed on the investment map of Ukraine.

Experts of the Department conduct an inven-tory of possible funding sources of regional projects. The activity of investment funds, international organizations, financial institu-tions, leasing companies, international tech-nical assistance projects is under the analysis. Investment proposals, which information was received in full size, were processed and pub-

lished (in conjunction with prepared invest-ment profiles of the regions) on the national investment web portal investukraine.com. The brochure on regional investment opportuni-ties in Ukrainian and English was prepared; it contains brief description of the investment proposals, map-layout and design of potential industrial parks.

Regional investment proposals and projects

Greenfield: Conceptual design of the industrial park of Rivne region;

Brownfield: Conceptual design of the Stachanov Industrial Park.

58

6. Finance

Olena PanamarchukDirector of Financial and Economic Provision Department

Born on October 13, 1970.

She graduated from the Trade and Economic University, specialty “Economy” and Interregional Academy of Human Resources with the specialty “Lawyer”. From 1995 to 2006 occupied executive positions in financial divisions in the system of local self-government in Kyiv (KCSA), from 2006 to 2007 – Financial Director of Football club “Arsenal Kyiv”, since 2008 works in central executive bodies of the State Agency of Ukraine on Preparation to Euro-2012, Ukrzovnishinvest, Ukrnatsproekt.

Since June 2011 - Director of the Financial and Economic Provision Department, the State Agency for Investment and National Projects of Ukraine. Married, has two sons.

For the year 2011 for the activity of the Agency the State Budget of Ukraine envisaged expendi-ture amounting to 1 158 894,50 ths. UAH, actu-ally used – 1 047 534,5 ths. UAH.

Expenditures for the feasibility studies’ (FS) de-velopment required to implement National Pro-jects amounted to 100 000,00 ths. UAH, which provided the financing of feasibility studies’ de-velopment for ten National Projects, including:

LNG-Terminal National Project (construction of a terminal for receiving and regasification of liq-uefied gas in the Black Sea coast) - 4 000,00 ths. UAH;

Olympic hope – 2022 National Project (the con-struction of sports and tourism infrastructure in Western Ukraine) - 14 600,00 ths. UAH;

Clean City National Project (the construction in ten cities of Ukraine of modern waste processing complexes with subsequent expansion to other Ukrainian regions) - 50 600,00 ths. UAH;

Air Express National Project (the construction of passenger railway connection between Kyiv and Boryspil International Airport) - 10 800,00 ths. UAH;

Clear Water National Project (the construction of a network facilities to purify and use clear drinking water by the population of Ukraine, es-pecially in preschools and schools on the basis of water-purification equipment) - 6 000.00 ths. UAH

Components of the Energy of Nature Nation-al Project “Greenenergo” (the construction of power plants based on renewable energy and production of solid alternative fuel) - 3 500,00 ths. UAH and “Warm Housing” (thermo-mod-ernization of housing facilities and public sector facilities) - 4 500,00 ths. UAH;

Danube Corridor (development of transport con-nection and shipping in the Danube region) - 4 800,00 ths. UAH;

New Life National Project (the construction of a network of regional perinatal centers of the third level, provided with innovative technology and advanced equipment) - 1 200,00 ths. UAH.

The Agency reserved 567 200,00 ths. UAH through depositing

59

the funds into the statutory of the State Enter-prise “State Investment Company” in order to accumulate funds to provide the state support for National Projects on a co-financing basis, which implementation phase is to start in 2012 and subsequent years.

In 2011 the Agency made expenditures in the amount of 108 283,4 ths. UAH for co-financing (3) of the New Life - a new quality of maternity and childhood National Project, namely the re-construction, technical re-equipment, innovative technology provision and advanced equipment for regional perinatal centers of the third lev-el in five regions: Kirovohrad, Dnipropetrovsk, Kharkiv, Donetsk and Zhytomyr. Official open-ing of the perinatal centers will be conducted in 2012.

The Agency took measures to create a positive investment image of Ukraine in order to attract investment funds to implement National Projects and to inform potential investors about invest-ment opportunities of the country. In 2011 the Agency spent 24 395,30 ths. UAH for the above mentioned measures. The main expenditures was: organization of road show of National Projects

(9 362,50 ths. UAH), organization of media campaigns abroad (3 817,40 ths.UAH), organi-zation of media campaigns in Ukraine (8 619,00 ths. UAH), organization of Interna-tional Investment Forum “Investconference in Kyiv” (1 456,20 ths. UAH) and other marketing activities (1140,3 ths. UAH). For more detailed information see “2.3. Investment marketing” chapter of the Report.

Overall expenditures for the maintenance of cen-tral office of the State Agency for Investment and National Projects and the network of regional centers for investment and development amount-ed to less than 3% of total expenditures in 2011 (29 505,2 ths. UAH).

Expenditures for government support of in-novation and investment projects implementa-tion in the real sector of economy through the mechanism of reduction of loans in 2011 totaled 218 150,60 ths. UAH in the direction of use of performance-budget liabilities arising to entities-winners of the competition in accordance with agreements concluded with them on the com-pensation of interest rate for credits.

3 Under the Decree of the Cabinet of Ministers of Ukraine dated August 3, 2011 № 847 “On the approval of the costs use, provided in State Budget for the State assistant to support the National Projects realization on co-financing terms.

60

Budget Program (KPKV)

№ Title of the budget program/event

Plan for 2011,ths. UAH

Cash expendi-ture 2011, ths.

UAH

Volume of spent costs de-facto in

2011, ths. UAH

Difference between costs expenditure de-facto and the plan for

2011 (6:4), %

Note

567200,00 UAH was contributed to the statutory fund of the SE “State investment company”

1 2 3 4 5 6 7 8

I. 6301010

II 6301030

III 6301040

IV 6301110

Management and administration in the sphere of investment activity and national projects management

Salary

Salary charge

Units, materials, equipment and stock

Services payment(except communal)

Other expenditures

Business trips expenditures

Payment for heating supply

Payment for water supply

Payment for electricity

Payment for other public utilities

Purchase of equipment and units of a long-term use

Measures taken for the creation of the positive investment image of Ukraine

Information allocation services

Services on photo-materials processing

Services connected with interna-tional relations (Road Show)

Services in advertising field

Services connected with international relations (International investment forum)

Polygraphic materials

Services to organize and conduct panel discussions, conferences and seminars on the investment possibilities of Ukraine and na-tional projects implementation

Oral interpretation services

Written translation services

Maintenance of the regional centers for investment and development

Salary

Salary charge

Units, materials , equipment and stock

Services payment (except communal)

Other expenditures

Business trips expenditures

Payment for heating supply

Payment for water supply

Payment for electricity

Payment for natural gas

Payment for other public utilities

Other development measures

State support for the national projects implementation on terms of co-financing

SE “State investment company”

17 755,20

9 940,40

3 608,40

406,10

873,20

5,30

165,00

281,00

17,50

295,00

1 913,30

250,00

47 282,00

93,80

60,00

12 720,08

24 794,64

1 620,96

1 871,89

590,00

28,00

352,00

13 857,30

8 616,90

3 128,00

132,90

427,80

3,30

88,60

304,20

43,40

302,10

5,60

791,00

13,50

620 000,00

16 380, 80

9 939,50

3 405,80

355,70

736,20

0,10

60,30

210,00

5,00

245,70

1 290,70

131,80

24 395,30

93,80

60,00

9 362,50

12 436,40

1 456,20

929,00

57,40

-

-

13 124,40

8 496,70

3 004,10

126,60

349,50

2,00

63,50

209,10

18,90

238,00

5,60

601,40

9,00

567 200,00

567 200,00

16 380, 80

9 939,50

3 405,80

355,70

736,20

0,10

60,30

210,00

5,00

245,70

1 290,70

131,80

24 395,30

93,80

60,00

9 362,50

12 436,40

1 456,20

929,00

57,40

-

-

13 124,40

8 496,70

3 004,10

126,60

349,50

2,00

63,50

209,10

18,90

238,00

5,60

601,40

9,00

-

-

7,7

0,0

5,6

12,4

15,7

98,1

63,5

25,3

71,4

16,7

32,5

47,3

48,4

-

-

26,4

49,8

10,2

50,4

90,3

100,0

100,0

5,3

1,4

4,0

4,7

18,3

39,4

28,3

31,3

56,5

21,2

-

24,0

33,3

100,0

61

1 2 3 4 5 6 7 8

V. 6301120

The provision of the develop-ment of the design and budget documentation, feasibility studies (their integral compo-nents) of National projects, including the establishment of statutory funds of the state enterprises

SE “LNG terminal National project”

SE “Olympic hope – 2022”

SE “Clean city”

SE “Directory for the construc-tion and management of the Air express National Project”

SE “Clear Water National Project”

SE “Greenenergo”

SE “InvestUkraine”

SE “Warm house”

SE “New life”

Measures taken for the estab-lishment of regional perinatal centers, provision with innova-tion technologies and modern equipment

Kirovohrad Region State Administration (RSA)

Dnipropetrovsk RSA

Kharkiv RSA

Donetsk RSA

Zhytomyr RSA

State support for the innova-tive and investment projects implementation in the real sector of economy through the mechanism of the easing of credit of National projects on terms of co-financing

Fund balance in the statutory fund is 3518,5 UAH



10800,00 UAH was contributed to the statutory fund of the SE “Directory for the construction and management of the Air express National Project”

6000,0 UAH was contributed to the statutory fund of the SE “Quality water National project”

3500,0 UAH was contributed to the statutory fund of the SE “Greenenergo”

4800,0 UAH was contributed to the statutory fund of the SE “InvestUkraine”

4500,0 UAH was contributed to the statutory fund of the SE “Warm house”

1200,0 UAH was contributed to the statutory fund of the SE “New life”

100 000,00

110 000,00

250 000,00

100 000,00

4 000,0

14 600,00

50 600,00

10 800,00

6 000,00

3 500,00

4 800,00

4 500,00

1 200,00

108 283,40

19 950,60

25 253,70

34 984,40

22 462,00

5 632,70

218 150,60

10 494,30

481,50

1 422,80

8 590,00

-

-

-

-

-

-

108 283,40

19 950,60

25 253,70

34 984,40

22 462,00

5 632,70

218 150,60

89,5

-

-

-

-

-

-

12,7

VI. 6301130

VII. 6301100

TOTAL 1 158 894,50 1 047 534,50 390 838,80

Budget Program (KPKV)

№ Title of the budget program/event

Plan for 2011,ths. UAH

Cash expendi-ture 2011, ths.

UAH

Volume of spent costs de-facto in

2011, ths. UAH

Difference between costs expenditure de-facto and the plan for

2011 (6:4), %

Note

62

7. Main tasks for 2012

Achievements of the Agency in 2011 are based on several key factors, namely:

political support from state leadership, maximum openness and transparency in the work, coopera-tion and support from a wide range of partners, professionalism and dedication of the working team of the Agency. Therefore, the Agency plans to achieve the following results in 2012.

Attracting foreign investment in Ukraine

To attract the investment in the amount of 10 billion USD in the economy of Ukraine in 2012. Of these 2 billion USD - directly by the Agency through One-Stop-Shop, 3.5 billion USD - through the implementation of the National Projects (In particular, Air Express, LNG termi-nal, Open World, Clean Water, Olympic Hope).To ensure compliance with best European ser-vices standards provided by One-Stop-Shop (InvestUkraine).To create Public-Private Partnership Center.To create a new service “Projects Marketplace”.To promote the adoption of laws, development of which started in 2011.

The implementation of the National projects

To achieve target indices of each of the projects. In particular:• Commissioning of eight perinatal centers in

frames of the implementation of the New Life National Project.

• To start the implementation of the Open World National Project from the beginning of a new academic year (2012-2013) among the 7th forms in the most trained secondary schools of II-III accreditation levels.

Investment Marketing

To conduct road shows of National projects and investment opportunities of Ukraine in 15 financial centers of the world.To make InvestUkraine.com one of the most popular Ukrainian web-sites in the sphere of investment marketing.To hold an International Investment Forum INVESTUKRAINE CONFERENCE 2012.

Quality of Public Administration

Full compliance with standards of project man-agement following PMI standards.To carry out certification of the management system of the Agency for compliance with ISO.

Implementation of the state investment policy and regional development

To develop the concept of the Investment code of Ukraine, the draft laws and regulations, the state target economic program development of investment activity for 2012 - 2015.To create institutionally capable regional cent-ers for investment and development, to conduct training and certification of the staff.To strengthen regional cooperation, concluding and implementing of agreements with the re-gions of Ukraine, the formation of operational plans for the implementation of national prior-ity investment projects. To develop a database of regional investment proposals and projects.To create investment interactive maps of the re-gions, regional investment web-sites, to support regional investment forums and other market-ing activities. To promote the development of investment in-frastructure, the definition of places of localiza-tion and creation of industrial parks’ designs. To organize comparative and generalizing re-search of investment attractiveness of the re-gions, definition of the index of the investment attractiveness.To organize the work of the Council of investors and the Public Council under the Agency.

International cooperation

To deepen cooperation with investment agencies of the world leading countries, to conclude 10 memoranda (agreements) of cooperation.To become the member of the World Association of Investment Promotion Agencies (WAIPA), to involve the Agency in the work of the Invest-ment Committee of the OECD, to develop a road map for opening the Centre of UNIDO at the Agency. To open the Ukrainian Center of Public-Private Partnership at the UN European Economic Com-mission.To start new projects of international techni-cal cooperation to support the realization of the tasks of the Agency.

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