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INVESTMENT POTENTIAL OF LVIV REGION EMERGING MARKET

INVESTMENT POTENTIAL OF LVIV REGION EMERGING MARKET. DENYS SHMYHAL CHAIRMAN OF MAIN ECONOMIC DEPARTMENT OF LVIV REGIONAL STATE ADMINISTRATION. May 17-18 th 2010. WHY LVIV REGION?. COMPETITIVENESS OF THE REGION. A BRIDGE BETWEEN THE EU AND UKRAINE.

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INVESTMENT POTENTIAL OF LVIV REGION EMERGING MARKET

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  1. INVESTMENT POTENTIAL OF LVIV REGIONEMERGING MARKET DENYS SHMYHAL CHAIRMANOF MAIN ECONOMIC DEPARTMENT OF LVIV REGIONAL STATE ADMINISTRATION May 17-18th 2010

  2. WHY LVIV REGION? COMPETITIVENESS OF THE REGION

  3. A BRIDGE BETWEEN THE EU AND UKRAINE For the EU – access to significantmarket: 2.5millionconsumers – Lviv region 12millionconsumers – Western Ukraine 47millionconsumers – Ukraine • Lviv region – transit border territory: • Key airport for all Western Ukraine • International carriers: Wizz Air, LOT, AustrianAirlines • Lviv – 70km to the EU border • 400km to Warsaw • 630km to Budapest • 720 km to Vienna • Border with Poland stretches for –278km • 7border crossings • Extensive goods turnover with Europe: • Export – 794million US dollars (in 2009) • Import – 1,6billion US dollars (in 2009)

  4. Lviv region is rated 4th competitive region among other Ukrainian regions (Ukraine Competitiveness Report, World economic forum) Rationale: Intellectual potentialand qualified workforce Rated 2nd by the quality of education in Ukraine(Ukraine Competitiveness Report,World Economic Forum, 2009) 25universities and academies, 110 thousand students: every 5th person in Lviv is a student Ivan Franko Lviv National University – one of the oldest in Europe (est. 1661) Innovations and IT 15%innovation-richindustrial enterprises Lviv is one of 30 most promising cities in the world for IT development (KPMG research) More than 100 companies and 5 thousand persons are involved in IT 1000 students graduate from National University “Lvivska Politechnika” annually Competitive labour costs Average wages: Almost 30times less than in France 6 times less than in Poland. COMPETITIVENESS

  5. Investment volume: 4th among Ukrainian regions 1st in Western Ukraine 1112,0 million USD of FDI attracted into the region as of 1.01.2010 1273enterprises-recipients Dynamics: 234,9million USD in 2009 250million USD (outlook for 2010) Structure: More than 50% - real sector industry and agricultureper 26% each INVESTMENT PROFILE OF THE REGION FDI into Lviv Region in 2008 SECTOR SPLIT industry agriculture finance real estate automotive trade FDI into Lviv Region in 2008 COUNTRY SPLIT construction Cyprus Great Britain USA Austria Poland Denmark other

  6. LESS EFFECTED BY CRISIS • European economy structure • Small business • 87%in real numbers, 75%in tax earnings • Business growth • 25,5%in 2009 (almost 15 thousand of new entrepreneurs) • Less effected by economic crisis • 2009: • Because of the factors of global financial crisis the region has lost 20 percent of industrial output. The volume of construction activity decreased nearly by 50 percent. The commercial and financial sectors activity decreased as well. • Official unemployment level 1,7%. • 2010outlook: • Decline in industrial production by 4,0% • Agricultural productionto 4,5billion UAH (1,6%)

  7. INVESTMENTS INTO LVIV REGION: REGION’S PROFILE INVESTMENT CLIMATE PROJECTS AND OPPORTUNITIES

  8. INVESTMENT CLIMATE Maximum support in: Simplifying procedures for setting up of business Simplification of a permit system Establishment of a “single permission window” in all Lviv region district administrations Information support Regular meetings with entrepreneurs, investors Every investment project has a responsible executive within Lviv Regional State Administration (Head of the Department/Deputy Head of the Department) Co-ordinating investment council patronized by Head of regional administration Promotion: Lviv International Economic Forum Ukrainian Investment Summit Lviv promotion investment agency

  9. KEY INVESTORS WORKING IN THE REGION

  10. INFRASTRUCTURE PROJECTS:INTERNATIONAL AIRPORT Construction timeframe: 2009-2010 Cost: 100-150million USD Funding: State budget of Ukraine Project: new passenger terminal: handling capacity –1000 passengers per hour area34thousand sq.m ground infrastructure runway built according to the requirements of ІCАО CAT II transnational planes allowed (critical plane – Boeing 767-400) Development started in 2009.

  11. INFRASTRUCTURE PROJECTS: EUROGAUGE Przemysl – Lviv, 85 km 1435 mmgaugerailwayconnectionPolishborder – Lviv • ImprovingconnectionfromWesternEuropetoLvivareaalongtheIII pan-European Corridor • Boost to international high-speed railway connection across the EU • Multiple stakeholders – the EU, state & local authorities, transportministriesand railwayoperators in Ukraine and Poland • Part of the State Programme of implementing high-speed railway passenger traffic in Ukraine for 2005 – 2015 • Outlook for EURO-2012 and the 150th anniversary of the 1st railway connectionVienna – Krakow – Lviv (1861-2011) • Investment volume:628 million USD • Including the fleet of high-speed railway trains • Implementation frame: 2-3 years • Design speed - 300-500 km/hour • Revenue forecasts:during the 1st year of direct commercial exploitation of 4 trains (box-office returns only) – over25million USD.

  12. INDUSTRIAL AND MINING PROJECTS Cement plant“Lafarge” of “Mykolaivtsement” corporation “Dry” method of cement manufacturing Total investment – 326million USD Land plot for this project sold at an auction on December 30, 2008 Growth of cement sales by250thousand tons per year Decrease in harmful emissions into environment • “Lyubelska” mine • First private mine in the country with foreign investment • Implementation timeframe: 2009-2014 • Total investment – 1billion USD, 25million USD – 2009, 20thousand jobs • Coking coal of one of the most valuable varieties • Balance reserve – 86million tons of coal will partially cover the deficit of coking coal in Ukraine.

  13. TOURISM & RECREATION PROJECTS Hotel and resort with in-housetherapeutic pools in Truskavets Construction timeframe: 2007-2010 Cost: 36million USD Project: 5* hotel: 210 rooms, 9 floors Aquapark: 4 floors Water area – 5 554 sq.m Water surface area – 1 320 sq.m.

  14. PRIORITIES FOR THE DEVELOPMENT AND INVESTMENTS Region of sustainable economic and business development Lviv region: environmentally friendly manufacturing Lviv region:agricultural business Ukrainian Gateway to the European Union – EURO 2012 Infrastructure, tourism and recreation: Border areas, Lviv: transport, housing and utility sector Lviv and Pre-Carpathian territory: network hotels with international brand names Lviv: exhibition and conference halls Pre-Carpathian are and Carpathian mountains: hotels providing sport and recreation services Region of well educated population, innovation potential and technologically advanced companies Lviv: professional services, ІТ sector, energy-saving technologies and innovations.

  15. CENTRE FOR CULTURE AND RECREATION Resort and recreation area attractive for investors • Cultural monuments • 50%UNESCO heritage of Ukraine • 25%of all Ukrainian historic and architectural monuments of ХІІ-ХХ centuries • Lviv first mentioned in history in 1256 • Nature recreation • Balneology: 7 of 8 world famous mineral waters (Truskavets, Morshyn, Skhidnytsya) • Carpathian mountains: a range of mountain resorts • Tourist flow • 1,95 million in 2009 • 10% of potential used.

  16. THANK YOU FOR ATTENTIONAND WELCOME TO LVIV REGION! http://www.loda.gov.ua d.shmyhal@loda.gov.ua

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