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Russia to provide $4 billion to Ukrainian yards

Kiev - Russia and Ukraine are considering implementing a number of major joint investment projects in shipbuilding during the next few years, as part of recently signed agreements between the two countries’ governments, writes Eugene Gerden for The Motor Ship

Kiev - Russia and Ukraine are considering implementing a number of major joint investment projects in shipbuilding during the next few years, as part of recently signed agreements between the two countries’ governments, writes Eugene Gerden for The Motor Ship.

Under the terms of the agreements Russia will invest more than US$4 billion in developing Ukrainian shipbuilding. It is planned that majority of investment will be for building LNG-carriers and offshore support vessels, to be built at Nikolayev, the historic centre of Ukrainian shipbuilding.

According to Valery Muntiyan, Ukrainian Commissioner for cooperation with Russia and the countries of the Eurasian Economic Community, implementation of the project will allow Russia to start active export of liquefied gas, help expansion of the Ukraine fleet, and raise skilled employment levels in shipbuilding.

Development of shipbuilding is regarded as a high priority for southern Ukraine, in particular Kherson, Odessa, Nikolayev and Crimea. As well as meeting global demands for offshore vessels, the Ukrainian yards hope to build bulk carriers and strengthen cooperation with global shipbuilders.

Ukraine financial conglomerate Smart-Holding, owned by businessman Vadim Novinsky, plans to build a series of hulls of container carriers at the Black Sea Shipyard (CSY) in Nikolayev in cooperation with the Dutch Damen Shipyards Group.

Funding for developing Ukrainian shipbuilding is expected to come partially from foreign investments, and part is expected to be allocated from the state budget. According to Mikhail Korolenko, Ukraine’s Minister of Industrial Policy, the government plans to provide domestic shipbuilders with access to cheap credits and to ensure stability in domestic orders.

He said that the government will provide guarantees in order to attract loans for domestic shipbuilding enterprises in the order of UAH 5 billion (US$555 million). Ukraine has rich experience in shipbuilding and had large merchant fleet and navy during the Soviet times.

This is reflected by the fact that during the Soviet period, some 70% of the country’s fleet was repaired and modernised in Ukrainian yards. After the collapse of the USSR Ukrainian shipbuilding has declined, resulting in a crisis in the industry and massive job losses.

Source: The Motor Ship

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