Amid all the gloom, at least one foreign investor sees some bright prospects for its business in Ukraine.

Scheduling the opening its first 10.7 megawatt solar power plant in the city of Nikopol in Dnipropetrovsk Oblast for January, TIU Canada gave another positive sign that the investment climate in Ukraine has started to improve again since Russia launched its war on the country four years ago.

With the outbreak of the war in the Donbas, foreign companies have naturally had many concerns about coming to the country.

“When we first arrived in 2016 there was a lot of skepticism and not that many western firms were even looking at Ukraine,” Hani Tabsh, CEO of TIU Canada, told the Kyiv Post in a recent interview.

“Now, over the last year-and-a-half that attitude has slowly morphed into — ‘okay, there’re still some things to get worked out, but it’s starting to become more comfortable.’”

Currently Tabsh does not see a serious threat from Russia.

“It feels like there is no conflict at all… It’s a very localized thing, which is important to recognize, but from (the) investor perspective you have to keep an eye on it,” he said.

The sooner the better

Over the past four years, renewables in Ukraine have become one of the most rapidly developing sectors of the economy. Part of the reason is Ukraine’s desire to become as energy independent as possible from Russia, which was previously the country’s biggest gas supplier.

Ukraine has also set an attractive green tariff for sales of power generated from renewables, and there is a high level of transparency for such business activity, making it less susceptible to corruption.

Since 2015, the renewable energy sector has seen generating capacity rise by 766 megawatts, to reach 1.7 gigawatts by the end of the first half of this year, according to the State Agency on Energy Efficiency and Energy Saving, or SAEE.

Over the same period more than 740 million euros of investment, both foreign and domestic, have been made in the sector, according to the SAEE.

Just like renewables, Ukraine now has a generally positive, but still very slow, trend of increasing foreign direct investments. From January to August FDI was $1.4 billion, a modest $200 million more than over the same period in 2017, according to the National Bank of Ukraine.

Among renewables the solar business is one of the most popular, as it is easier to get started and requires less initial data than other types, like wind or biogas.

“You don’t have to do a one-year wind study, plus the construction time is a lot faster,” said Tabsh.

In 2009 there was not a single solar power plant in Ukraine; in comparison, by the end of 2017 some 184 solar projects were completed, producing some 742 megawatts of electricity altogether, according to the Ukrainian Association of Renewable Energy, or UARE.

The trend is persisting in 2018: The renewable sector is expecting to see the installation of another gigawatt of “green” capacity — 600 megawatts of solar, 300 megawatts of wind, and 50–100 megawatts of bioenergy, according to Irina Krymus, an expert at the UARE.

However, despite all the progress in renewables seen in Ukraine, the country is still far from securing its energy independence.

Unlike Germany, where renewables produce 40 percent of the country’s electricity, Ukrainian renewables accounted for only 1.2 percent of the electricity the country generated in 2017, or only 1,896 million kilowatts, according to energy expert Andrey Perevertaev.

That number is dwarfed by the output of nuclear power plants, and coal- and gas-fired power plants, which generated 91 percent of all of the electricity in Ukraine, or some 141,000 million kilowatts over the same period.

Solar portfolio

Like the other major players on the Ukrainian renewable market, TIU Canada doesn’t want to stop at a single solar power plant in Nikopol.
It plans to build five new solar power plants in Ukraine, investing 94 million euros, according to Ivan Bachynsky, the company’s communications representative.

“We want to have a portfolio of 50–100 megawatts if not larger as we grow over the next year,” added Tabsh.

Since Mykolaiv Oblast has one of the best locations for solar power generation in Ukraine, another solar plant near the village of Kalynivka is already under construction. It will cover 20.2 hectares with a capacity of 13.5 megawatts.

The plant will help reduce Ukraine’s carbon dioxide emissions by 18,212 tons per year, according to Bachynsky.

According to Tabsh, the company is in the final stage of negotiations and completing due diligence for two additional solar projects in that same region.

“And as soon as we’ve got those closed and meet all the final requirements, we’re going to start constructing them this fall,” he said.

Historic agreement

TIU Canada doesn’t just have business ties with Ukraine — there is much broader interest in cultural exchanges at the company.
For instance, on Sept. 10, two mayors — Nikopol’s Andriy Fisak and Gerald Aalbers of the Canadian city of Lloydminster — signed a historic agreement between their two cities.

The Canadian investments in Nikopol were the motivation for signing this first major non-military cooperation agreement between Canada and Ukraine in 35 years.

“We’re not happy simply to put money into a community, walk away, and just collect income that comes from that type of investment,” said Tabsh. “Our company wants to be actively involved within the communities in which we’re investing.”

Since Lloydminster and Nikopol have some similarities in terms of industries and population size, the cooperation could produce real growth in trade as well as opportunities in education, art, and sports between them, according to Tabsh.

“There will be cultural exchanges hopefully between the two cities after the meeting of the two mayors, and we’re looking to see how it will develop and will support it as quickly as we can,” said Tabsh.