Dear all,

We are pleased to present the latest edition of our monthly Business Sweden Ukraine Newsletter, designed to keep you informed about significant business developments in Ukraine. It is a privilege to extend our support to your companies as they contribute to the reconstruction efforts in Ukraine. Please do not hesitate to reach out to us with any inquiries or clarifications; we are here to assist you.

Key Summer Highlights

• On June 11-12, 2024, Ukraine Recovery Conference 2024 took place in Berlin, Germany, which has brought together governments, international organizations, financial institutions, businesses, municipalities, with over 3,400 participants representing various stakeholder groups. The Conference was marked by signing of over 110 reconstruction-related agreements, including a dozen of B2B ones. Business Sweden’s CEO Jan Larsson and Trade Commissioner to Ukraine Andreas Giallourakis attended the conference to mark Business Sweden’s inclusion in the newly established Business Advisory Council, a platform aimed at enhancing the investment climate in Ukraine.

• On June 23-24, 2024, the first Swedish government-promoted business delegation visited Ukraine since the full-scale invasion began in 2022. The delegation was led by Johan Forssell, Minister for International Development Cooperation and Foreign Trade. It included, among others, representatives of Saab, Ericsson, Volvo Group, Scania, Elekta, Beetroot, and Beredskapslyftet. In Kyiv, the delegation met with President of Ukraine Volodymyr Zelenskyy, Prime Minister of Ukraine Denys Shmyhal, Ukrainian ministers, and other high-level representatives. The discussions focused on expanding Swedish business operations and attracting new investments to Ukraine. The visit of the delegation was also marked by official inauguration of Business Sweden’s new office in Kyiv. We are also honored to inform that our local team has expanded to 6 specialists, including Team Leads in Energy & Electricity and Infrastructure.

• On June 24-25, 2024, “Rebuild Ukraine: Health & Rehabilitation” Exhibition & Conference was held in Warsaw, Poland. The high-ranking presence of the Swedish delegation was confirmed by the participation of the Swedish Minister for Health Care Ms. Acko Ankarberg Johansson, which demonstrated the Swedish government’s commitment to steadfast for Ukraine in the healthcare sector. The presence of Swedish pavilion dedicated to healthcare, medical technology, and rehabilitation demonstrated that Swedish private sector has a strong interest in actively participating in Ukraine’s recovery process.

Tender Opportunities

We continue to encourage you to visit our Tender Opportunities page on our website, where we regularly update information on both international and local tenders relevant to Swedish companies. Stay informed and discover how your company can contribute to Ukraine’s reconstruction efforts by participating in current opportunities.

With regard to this, we would like to draw your attention to latest attractive opportunities in energy sector. On August 6, 2024 National Power Company “Ukrenergo” has announced its first long-term auctions for procuring ancillary services to balance the power system. The initial auctions are scheduled for August 15 and 22, 2024, aiming to secure various types of reserves through five-year contracts, extendable by one year. This presents a unique opportunity for investors, businesses, and communities to enhance energy independence and explore new ventures. The auction on August 15 will address a demand of 99 MW, primarily targeting energy storage systems capable of rapid response. Maximum bid price for this service is 33 EUR per MW. The larger auction on August 22 will seek 1000 MW, divided into 579 MW for load services and 421 MW for symmetrical reserves, open to gas reciprocating, gas turbine, and biomass power plants. Maximum bid price for this service is from 24 to 33 EUR per MW. For more details, please explore News page on our website.

Our Events and Reports

Looking ahead, we are glad to announce upcoming joint webinar by Swedish Civil Contingencies Agency (MSB) and Business Sweden “Swedish support for Ukraine’s resilience: Support from MSB in coordinating and transporting material donations from business” on August 30, 2024. The registration is available via the link.

In addition, please feel free to join two webinars to be conducted by Swecare, dedicated to business opportunities that the Ukrainian healthcare market presents:

• “Ukrainian Healthcare System”, which will take place on August 29, 2024. The registration is available via the link. The registration deadline is August 25, 2024.

• “Funding Opportunities for Swedish Life Science in Ukraine”, which will take place on September 05, 2024. The registration is available via the link. The registration deadline is August 25, 2024.

We also encourage you to participate in the 4th International Exhibition & Conference “Rebuild Ukraine: Construction & Energy” to be held in Warsaw, Poland on November 13-14, 2024. The interested participants are invited to register at https://nyteknikevents.se/produkt/construction-energy-ukraine/ or contact Mr. Peter Davidson, Program Director Swedish Pavilion at Rebuild Ukraine, at peter.davidson@foreversustainable.se or +46 73 708 1501. For more detailed information, please see “Invitation to Swedish Pavilion at ReBuild Ukraine – Construction & Energy”.

Please follow Event page on our website for more information on future events.

In addition, we are glad to inform that the recordings of the webinars "Rebuilding Ukraine: Opportunities for the Swedish Private Sector", conducted on April-May, 2024, as well as presentation materials are accessible on our web-site via following link: "Rebuilding Ukraine: Opportunities for the Swedish Private Sector".

We have also updated "Rebuilding Ukraine: Opportunities for Swedish Private Sector" guide for Swedish companies seeking ways to contribute their solutions and expertise to Ukraine's recovery and renewal journey. We encourage you to explore the new edition of the guide on our website.

Key Updates

As we approach the middle of August, we would like to highlight important business and investment updates in Ukraine:

1. Ukrainian government

• Ukraine's GDP grew by 3.7% in May 2024 compared to the same month last year, despite negative factors. The Ministry of Economy reported these estimates, noting positive trends in transport, industry, construction, agriculture, and domestic trade. However, significant challenges remain, including a shortage of skilled labor and ongoing Russian attacks on energy infrastructure. In addition, Ukrainian exporters increased physical sales of their goods by 35% in the first half of 2024, compared to the same period last year. The increase in the physical volume of exports of Ukrainian goods was primarily due to the stable operation of the Ukrainian Sea Corridor and expansion of other logistics routes.

• Large-scale privatization continues in Ukraine: On July 9, 2024, the Government added two 100% state-owned enterprises in the sphere of aerated concrete products manufacturing (LLC "Aeroc") and mining (LLC "Demurinsky Mining and Processing Plant") to the list of large-scale privatization. The privatization objects will be sold through Prozorro.Sale, an electronic public procurement platform. Revenues from the privatization of the above objects will be directed to the Fund for Elimination of the Consequences of Armed Aggression.

• The Government of Ukraine has allocated UAH 100 million (SEK 25 million) for the priority restoration of Okhmatdyt hospital, which was attacked by Russia during a mass missile attack in Kyiv on July 8, 2024.

• The Government of Ukraine is launching a massive campaign in licensing digitalization: businesses will be able to obtain licences and permits in electronic form. The pilot project envisages the digitalisation of the full cycle of licensing procedures. First of all, it will be possible to submit a declaration on labour protection and to obtain a veterinary licence. Other services are scheduled to be launched in October 2024.

• On July 16, 2024, the Parliament of Ukraine adopted laws providing for exemption from VAT and customs duties on the import of energy equipment into Ukraine. This includes power generating equipment, wind and solar generation equipment, and batteries. The adopted laws will provide the necessary conditions for energy stability and security in Ukraine.

• On August 13, 2024, the Government approved the National Renewable Energy Action Plan for the period up to 2030, along with its’ implementation plan. The plan aims for renewable energy to constitute 27% of the gross final energy consumption by 2030. An additional annual quota was also introduced to support businesses that generate energy from alternative sources, starting in 2024, and a schedule of pilot auctions that will take place this year to allocate the quota to power generating facilities was also confirmed. In addition, the terms and conditions for tenders concerning the construction of generating capacities and demand management measures have been approved.

2. International Cooperation

• The first EUR 1.4. billion tranche from Russian assets to be allocated for Ukraine’s military needs in early August. These funds will be directed at the acquisition of priority military equipment for Ukraine – air defence systems, artillery ammunition and the procurement in the Ukrainian defence industry. Previously, on May 21, 2024, the EU reached decision to use revenues generated by Russian immobilized assets to support Ukraine.

• On June 22, 2024, Ukraine and the EU have signed a Framework Agreement on EU financing under the Ukraine Facility, the EU’s financial assistance programme for Ukraine for the period of 2024-2027 for a total of EUR 50 billion. The agreement defines the mechanisms of financial cooperation between the EU and Ukraine, in particular on the management and control of the use of funds under the Ukraine Facility, as well as joint measures to prevent corruption. In addition, within the Ukraine Facility Framework, Ukraine and the EU have finalized an agreement to secure EUR 27 billion from the Ukraine Facility for 2024-2027. The initial EUR 1.9 billion pre-financing tranche has been disbursed in June, with subsequent payments released quarterly, contingent upon Ukraine meeting specific performance indicators.

• The IMF concluded that Ukraine’s performance remains strong under the Ukraine’s Extended Fund Facility (EFF), a 48-month arrangement with access to over USD 15 billion. On June 28, 2024, the IMF completed the fourth review of the Ukraine’s EFF arrangement and concluded that Ukraine met all structural benchmarks for the fourth review, including anticorruption reforms and programs to support small and medium enterprises. That enabled an immediate disbursement of about USD 2.2 billion of financing.

• Denmark will contribute an additional EUR 4.7 million to the Ukraine Energy Support Fund (the Fund) to help restore energy infrastructure in Mykolaiv and Kharkiv. This brings the Fund's total contributions to over EUR 551 million. Recently, Germany, Australia, the UK, and Austria have also contributed or announced intentions to contribute to the Fund.

• On 09 July 2024, Ukraine and the EU signed a EUR 5.27 billion Financial Agreement. This agreement aims to stabilize Ukraine's macroeconomic and financial situation. It will support key sectors of the economy through private and public investment projects, fostering resilience against Russian aggression and promoting long-term sustainable growth.

• Ukraine and Norway have initiated an energy partnership, focusing on collaboration in hydroelectricity, other renewable energy sources, and natural gas. To deepen the partnership, Ukrainian and Norwegian officials conducted discussions with Norwegian businesses like Scatec, Fenix Repower, Bergen Engines, etc., committed to investing in Ukraine’s energy sector.

• The Business Advisory Council (the Council), a new platform composed of global business leaders from the US, Canada, the UK, Norway, the EU, and Ukraine, has been established to enhance the investment climate in Ukraine. This council aims to offer practical advice to Ukrainian authorities to boost private sector investment. Its inaugural meeting took place at the URC-2024 International Conference on Ukraine's Recovery in Berlin. Business Sweden’s CEO Jan Larsson was appointed Swedish representative in Council.

• Ukraine and France have finalized a EUR 200 million grant agreement to support the restoration of Ukraine's critical infrastructure and key economic sectors. The agreement allocates EUR 60 million specifically to Ukraine's energy sector. The grant aims to facilitate recovery in various fields including healthcare, energy, agriculture, and digital technologies, reinforcing Ukraine's resilience and rebuilding efforts.

3. Sweden in Ukraine

• The Government of Sweden has agreed on a three-year framework for military support to Ukraine totalling SEK 75 billion for 2024–2026, which equates to SEK 25 billion a year.

• On June 23-24, 2024, the first Swedish government-promoted business delegation visited Ukraine since the full-scale invasion began in 2022. Within this visit, the Ukrainian Ministry of Health and Elekta advanced their collaboration to enhance oncology centers and develop radiotherapy in Ukraine. This partnership has led to the acquisition of 15 cutting-edge Elekta Harmony linear accelerators at half the planned cost, totalling UAH 541 million (SEK 140 million), to strengthen oncology facilities across 15 regions. The Ukrainian Ministry of Health emphasized that it is interested to continue cooperation with Elekta, which includes the introduction and development of the latest technologies and the training of Ukrainian doctors in modern approaches to cancer treatment.

• Sweden will enter a coalition together with eleven other countries, which, through joint procurement, will support Ukraine’s armed forces with unmanned aerial vehicles – drones. Systems training may also be included. Besides Sweden, the coalition includes Australia, Canada, Denmark, Estonia, Germany, Latvia, Lithuania, the Netherlands, Poland, and the United Kingdom. It is jointly led by Latvia and the United Kingdom. Sweden has previously donated EUR 10 million to Ukraine for the purchase of drones.

• On May, 28, 2024, the Government of Sweden has presented a new energy package to Ukraine in the amount of SEK 650 million. This support will help secure Ukraine’s energy supply to ensure that fundamental public services, such as schools, hospitals, transport, water supply and businesses, can continue to run.

We look forward to sharing more insights in the coming months. If you have any questions or contributions, please feel free to reach out. Your active involvement is key to our collective success.

Best Regards,

Business Sweden Kyiv Team