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EBRD and IFC to help modernize Ukraine’s Black Sea port of Chornomorsk
EBRD, Kyiv, Ukraine
Wed, Oct 20, 2021
- Ukraine’s Chornomorsk Port to boost its competitiveness with a public-private partnership
- EBRD and IFC to assist the government in preparing the tender and liaising with investors
- New concession follows the success of PPP contracts for Olvia and Kherson ports
The European Bank for Reconstruction and Development (EBRD) and International Finance Corporation (IFC) are supporting the Ministry of Infrastructure of Ukraine and the Ukrainian Sea Ports Authority in structuring and tendering a public-private partnership (PPP) to modernise the country’s Chornomorsk Port on the north-western shore of the Black Sea.
Private sector-led investment and modernisation of the port, one of the largest in the Black Sea region, could increase Ukraine’s import and export capacity, boosting its trade competitiveness and economic growth.
The EBRD and IFC will help the Ukrainian government to prepare a comprehensive contractual framework, set bidding criteria and tender rules, and liaise with potential investors, paving the way for a successful tender. Ukrainian Minister of Infrastructure Oleksandr Kubrakov and Mark Magaletsky, EBRD Deputy Head of Ukraine, Sustainable Infrastructure, formalised an agreement to this end.
Mr Kubrakov said: “Regarding the development of ports, we focus on working with investors. Our partners, IFC and the EBRD, provide full support to this process. The Chornomorsk Port is the third-largest in terms of cargo volume in the country, so this concession project is especially important. In Ukraine, container transport has great potential for development, as it currently accounts for only 8.5 per cent of the total volume. After finding an investor for the Chornomorsk Port and modernising the container terminal, it should be possible to almost double its capacity. This will be a powerful stimulus for the development of the region’s economy and increase the competitiveness of Ukraine as an infrastructure hub.”
Mr Magaletsky added: “We are very pleased to reach this new milestone in our PPP advisory work. Together with IFC, we recognise how critical port infrastructure is to the competitiveness of Ukraine. The benefits of thorough project preparation and a well-run PPP tender are significant. We look forward to bringing the Chornomorsk Port to the market with the involvement of further private-sector investment. ”
The Chornomorsk container terminal and railway-ferry complex concession will help to modernise the terminal’s existing assets, improve and optimise its operations and develop additional services for carriers and cargo owners. Improving the port by optimising cargo logistics and providing higher-quality services is expected to boost the attraction of Ukraine to leading international shipping operators.
The EBRD’s engagement in Chornomorsk follows two recent successful tenders in the country’s maritime infrastructure sector. In 2020, the Bank – in partnership with IFC and the Global Infrastructure Facility – supported Ukraine’s Ministry of Infrastructure in structuring concessions for the ports of Kherson and Olvia, two mid-sized Black Sea ports.
“The upcoming concession of the Chornomorsk port terminals is a huge step in the development of Ukraine’s port industry, driving economic growth and increasing the country’s competitiveness in the global market,” said Mehita Fanny Sylla, IFC’s Manager for the Public-Private Partnership (PPP) in Europe. “The modernisation of Chornomorsk Port, along with the success of the concessions in Kherson and Olvia, will prompt the further private sector-led transformation of the sector.”
Ukraine is a top-three investment destination for the EBRD. In the past two years alone, the Bank has committed €2 billion to the economy. The EBRD finances infrastructure, energy efficiency, energy security, agricultural and industrial projects, as well as projects for smaller businesses. It combines these investments with support for policies that promote a more enabling business environment.