Ukraine House Davos Plays Host to US$370 Million of Investment Deals
DAVOS, Switzerland, Jan 24, 2019 – President Petro Poroshenko witnessed the signing of two deals worth US$370 million of investment for Ukraine at Ukraine House Davos, underlining the return of big investors to the European country after a period of economic reform.
The private equity and foreign direct investment deals involving Total Eren, the French energy giant; NBT, a Norwegian energy company; European Bank for Reconstruction and Development (EBRD); and Horizon Capital, an investment fund, follow a landmark agreement signed with the IMF in October.
“This shows that Ukraine is opening for business because it is reforming, because it has been reforming the energy sector for several years now and moving towards EU standards,” said Sir Suma Chakrabarti, President of the EBRD.
The EBRD arranged a syndicated loan of €150 million loan for the construction of a 250 MW windfarm in the Kherson region of southern Ukraine. The loan will be extended to the local developer SyvashEnergoProm LLC, co-owned by Total Eren and NBT for the construction of the initial 133 MW phase. The farm is expected to begin power generation by the end of 2019.
At the same signing ceremony at Ukraine House Davos, Lenna Koszarny, Founding Partner and CEO Horizon Capital, announced a $200 million private equity fund for Ukraine.
“When we first started raising this fund people told us this could not be done. We set a target of $150 million and we exceeded it. Then we reached the maximum of $200 million and we were turning away investors,” she told a packed audience, including co-investors the International Finance Corporation and Western NIS Enterprise Fund.
“Our success is Ukraine’s success. This sends a strong signal to the market that Ukraine is an attractive investment destination. Certainly our investors believe so: and our investors include investors with over $350 billion in capital, putting money to work in a long term fund that is over a decade for Ukraine,” she added.
President Poroshenko said he was pleased that the reform efforts of the Government, and Prime Minister Volodymyr Groysman, over the past two years had created a business environment that was highly attractive to investors.
“This shows that foreign investors are returning to Ukraine on the back of reform,” said Sir Chakrabarti of the EBRD. “Renewable energy an area where I think Ukraine is going to be a world leader, if not a regional leader, and this is the largest wind farm in Ukraine.”
The loan package will consist of a €75 million EBRD A-loan and a B-Loan of up to €75 million from the Green for Growth Fund (GGF) and the Netherlands Development Finance Company (FMO). A parallel loan of €5 million will be provided by the Nordic Environment Finance Corporation (NEFCO).
Ms Koszarny said Horizon’s $200 million Emerging Europe Growth Fund III, L.P. would be invested in Ukraine’s manufacturing, agribusiness and services sectors.
“This financing will also help create new jobs in Ukraine. This is very important because the $650 million that we have already put to work has already created 46,000 jobs over the years,” she said.
Horizon Capital is the leading private equity firm in Ukraine, and a co-organizer of Ukraine House Davos, with over $850 million under management and investing more than $650 million to date in Ukraine and the near region.
EEGF III’s investment strategy is focused on fast-growing, export-oriented companies that leverage Ukraine’s cost competitive platform to generate global revenues primarily in IT, light manufacturing, food and agriculture. The Fund will also pursue investments in select, high-growth domestic market segments, including e-commerce, healthcare and pharma, consumer goods and financial services. Since holding its first close last year, EEGF III has concluded six investments and plans to invest the new fund in compelling, fast-growing companies over the coming years.
Once the wind farm project is fully commissioned, it is expected to reduce CO2 emissions by 470,000 tonnes annually, and to produce over 850,000 MWh of renewable energy each year – enough to provide power to the Ukrainian municipality of Rivne, which has approximately 100,000 households.
The EBRD is the largest international financial investor in Ukraine. Since the start of its operations in the country in 1993, the Bank has made a cumulative commitment of almost €13.1 billion across some 418 projects in Ukraine.
About Ukraine House Davos
Ukraine House Davos is powered by co-organizers Ukrainian Venture Capital and Private Equity Association (UVCA), Western NIS Enterprise Fund (WNISEF), Victor Pinchuk Foundation and Horizon Capital. Ukraine House Davos is proud of its all-female, five-member Organizing Committee of volunteers Svitlana Grytsenko (Victor Pinchuk Foundation), Jaroslawa Johnson (WNISEF), Lenna Koszarny (Horizon Capital), Olga Afanasyeva (UVCA) and Alexa Chopivsky (Ukraine House Davos).
In addition to the generous support of its Co-Organizers and Gold Sponsor Temerty Foundation, Panel Sponsors of Ukraine House Davos include BHFF, Business 100, EBS, Effective Investments LLC, First Generation Capital, Hillmont Partners, ICU, IT Ukraine Association, TA Ventures, TIU Canada and UFUTURE Investment Group.
Ukraine House Davos is supported by UkraineInvest, National Investment Council, Ukrainian World Congress, Aspen Institute, Aspen Institute Kyiv and the Atlantic Council.