Kyiv, Ukraine, August 20, 2020 — IFC, a member of the World Bank Group, supported Ukraine’s Ministry of Infrastructure and the Ukrainian Sea Ports Authority to finalize the landmark Olvia Port public-private partnership project in the city of Mykolaiv on the northern Black Sea coast. The project is expected to contribute to Ukraine’s economic development by attracting private investments and boosting trade competitiveness.
The Ukrainian Sea Ports Authority and QTerminals, the leading Qatari port operator, signed today a 35-year concession agreement to upgrade the port’s facilities and increase its efficiency. The project is the country’s second port concession implemented in accordance with best international standards , following the agreement for the seaport of Kherson signed earlier this year. QTerminals will support the Olvia port over the next several years, constructing a new grain terminal and other critical infrastructure.
“This project will be developed by a leading world operator with extensive experience in Qatar - the Qatari company QTerminals, which operates Qatar's largest trading port - Hamad. The company will invest around 3.4 billion Ukrainian hryvnia in the development of the port of Olvia and will also guarantee that the jobs are preserved. 80 million Ukrainian hryvnia will be spent on improvement of infrastructure of Mykolaiv," said Vladislav Krykliy, the Minister of Infrastructure of Ukraine.
IFC , in cooperation with the European Bank for Reconstruction and Development (EBRD) and the Global Infrastructure Facility, was the lead transaction advisor, helping the government competitively tender the project and bring it to commercial close.
Ukraine is a major supplier of bulk commodities to global markets, and these commodities are mainly transported via sea freight. However, Ukrainian seaports operate at only about half of their potential capacity due to their outdated infrastructure, which can disrupt their ability to bring these supplies to the market. This concession will help modernize Olvia Port and increase the volume of its cargo transshipment, a great share of which is expected to be delivered by rail or water transport resulting in a cleaner environment in the city of Mykolaiv.
“The successful closings of the Olvia and Kherson seaport pilot concessions have proven that the public-private partnership model is effective at attracting private investment into Ukraine’s infrastructure , ” said Jason Pellmar, IFC Regional Manager for Ukraine, Belarus and Moldova . “Both projects will serve as models for future concessions across different sectors of Ukraine’s economy. The efforts are in line with the core of our mission to improve Ukraine’s trade competitiveness and accelerate its economic growth . ”
IFC, in partnership with the Federal Ministry of Finance of Austria and the Swiss State Secretariat for Economic Affairs SECO , supported Ukraine’s Ministry of Infrastructure with structuring a comprehensive contractual framework and determining bidding criteria for the Olvia and Kherson concessions. The projects have significantly exceeded expectations in terms of investment and concession fees .
IFC and Ukraine signed a memorandum of understanding in October 2019 to identify key sectors for joint implementation of public-private partnership projects. IFC is working on pre-assessment analyses of pilot concessions in roads, airports, rail, energy, and health care, aimed at boosting investments and accelerating the economic growth of the country.
About IFC
IFC — a sister organization of the World Bank and member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2019, we invested more than $19 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org .
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