From agriculture to green energy: which sectors of the Ukrainian economy Korean businesses want to invest in

The issues of involving South Korean companies in the reconstruction of Ukraine, investment prospects and transformation of the Ukrainian economy in the context of the country's recovery were discussed by the First Deputy Prime Minister of Ukraine, Minister of Economy of Ukraine Yuliia Svyrydenko with representatives of South Korean business circles during the round table "Korea-Ukraine Partnership for the Future" held in Seoul on May 16 under the auspices of the Chamber of Commerce and Industry of the Republic of Korea.

"Korean companies are known for their experience in implementing infrastructure projects. We are working to get them more actively involved in the post-war recovery of Ukraine. After the victory, new unprecedented opportunities for work and development will open up. We are counting on South Korea's significant contribution to Ukraine's reconstruction," said Yuliia Svyrydenko.

She emphasized that Ukraine now faces two main tasks: to do everything to win and to start rebuilding the country now, without waiting for the end of the war. In 2023, Ukraine will need USD 14 billion for rapid recovery, which means hundreds of different projects where recovery will take place simultaneously.

The Ukrainian delegation suggested that Korean businesses consider opportunities to implement joint projects in various sectors of the economy. Korean investors were interested in such prospects.

For example, Lotte E&C and Hyundai Engineering expressed interest in cooperation in the restoration and cooperation in the fuel and chemical industry.

For POSCO International, we presented the potential of our country in terms of green metallurgy development. This company also has a grain terminal in Ukraine, so the parties discussed the prospects for cooperation in the agricultural sector with a focus on agricultural production and agro-processing.

They also addressed the possibility of cooperation in the extraction and processing of critical minerals, such as lithium.

The Ukrainian delegation also prepared separate proposals for cooperation with a number of other large Korean companies: Hyundai E&C (one of the market leaders in the construction of infrastructure, energy, industrial and residential facilities), Hyundai Motors, with the possibility of placing electric vehicle production in Ukraine, SK Ecoplant, which specializes in the introduction of the latest environmentally friendly technologies in industry, and Samsung C&T (one of the leading South Korean construction companies), Hanwha Group, with the aim of engaging in the production of full-cycle solar panels, dual-use and defense products, as well as mobile unmanned demining vehicles.

Yuliia Svyrydenko assured the South Korean business community that Ukraine was currently the best place for future business development. After all, our country has a highly skilled workforce capable of coping with the most complex tasks. In addition, investors are offered favorable conditions.

"We offer new companies in the Ukrainian market solutions for locating their production facilities in industrial parks, and we also offer specialized companies to join the development of industrial parks in Ukraine as their management companies. We have established state incentives in the form of exemption from import duties and VAT on equipment imports for manufacturing companies," Yuliia Svyrydenko assured the Korean businessmen. Ukraine is able to meet its consumption needs due to its large domestic market and significant export potential.

"We have found common ground with our Korean partners and are already working on resolving organizational issues as promptly as possible to get quick results," summarized Yuliia Svyrydenko.

"Ukraine is included in the list of priority countries for bilateral cooperation with the Republic of Korea under the Official Development Assistance (ODA) programme. The possibility of receiving the first tranche of up to USD 300 million from the EDCF will appear in 2023 within 3-4 months from the signing of the second stage of the agreement, which is expected in a month from today's extraordinarily important event. The next tranche of up to USD 3 billion will become available in 2024, with the limit gradually increasing to USD 8 billion as the pipeline of projects is filled. Also, Ukraine will be able to use Korean capacities and experience for the post-war reconstruction of the destroyed infrastructure, industrial and civilian facilities," said Yuliia Svyrydenko.

In particular, the funds will be raised for a long-term period at minimal interest: the loan term can be up to 40 years at 0.15% per annum with a 10-year grace period for repayment of the loan principal. The loans will be provided by the Export-Import Bank of Korea under the EDCF.

The completion of the Agreement between the governments of Ukraine and the Republic of Korea is an important milestone that allows us to start working on individual projects now.

"We hope that in the coming weeks all the formalities will be completed and we will be able to present the first projects to be financed by the Fund to the business communities of our countries," added Yuliia Svyrydenko.

Separate loan agreements will be concluded to attract financing for specific projects. For its part, the Korean Government can provide grants and technical assistance for the preparation and evaluation of projects.

In addition, it is planned to open an EDCF office in Ukraine.

"Ukraine is using every opportunity to attract additional resources from international partners. The implementation of the Agreement will open up new opportunities for business cooperation between the two countries. We look forward to the active participation of Korean business in the post-war recovery of our country, and today's signing will allow us to attract significant investments from South Korea to locate new technological production facilities in Ukraine in strategically important industries in partnership with global Korean corporations," said Yuliia Svyrydenko.

Background

The Economic Development Cooperation Fund (EDCF) was established by the Government of the Republic of Korea on 1 June 1987 to promote economic cooperation between Korea and developing countries. The Fund provides financial support to partner countries for their industrial development and economic stability.

IC UAC according to the MEU