The following is the Nov. 26, 2024 edition of our Ukraine Business Roundup weekly newsletter. To get the biggest news in business and tech from Ukraine directly in your inbox, subscribe here.
Our most-read article last week was a story about how after Israel repeatedly ignored Ukraine’s warnings and offers to help counter the threat of Iranian drones, the tides appear to be turning as Israel faces increased drone attacks.
The independent Israeli investigative outlet Shomrim found that after talking with dozens of officials and key individuals in the defense technology sector, early signs of collaboration are emerging as Israeli defense tech companies seek proven, combat-tested solutions.
Earlier this year, Shomrim reported that long before the Oct. 7 Hamas attack on Israel, Ukrainian officials had reached out to their Israeli counterparts to share their experience countering Iranian-made drones that Russia began using against Ukraine in 2022.
Their warnings were virtually ignored, Shomrim found.
A former senior Ukrainian official said at least one Ukrainian company developing anti-drone technology sent representatives to Israel before the outbreak of the war in Gaza — but could not find a single counterpart from the defense sector in Israel willing to meet with them at their office.
“Someone did agree to meet with them at a fast-food restaurant and I believe that was the only meeting. It was a humiliating experience,” said the former official, who agreed to speak on condition of anonymity to discuss the private conversations.
Both current and former Israeli and Ukrainian officials said that Israel paid a heavy price for dismissing those warnings.
The Iranian-made drones that are being launched at Israel from Lebanon, Yemen, Syria, Iraq, and Iran itself have led to casualties, destruction, fires, and panic and are now the main challenge currently facing Israel’s aerial defense systems.
The extent of the threat was underscored by the drone that hit and damaged the private residence of Israeli Prime Minister Benjamin Netanyahu in Caesarea.
The Ukrainian companies, for their part, are hoping to grow and profit from the Israeli companies’ international contacts. Ukraine gained experience from almost three years of war, with over 7,000 drones launched from Russia into Ukraine since the beginning of 2024, including about 2,000 in October alone.
Read the full article here.
Russia has damaged 321 port infrastructure facilities, as well as 20 foreign merchant vessels since July 2023, President Volodymyr Zelensky said on Nov. 23 at the International Conference on Food Security in Kyiv.
Zelensky said that the country's "food exports provide food for 400 million people in 100 countries around the world."
"Food prices in Egypt, Libya, Nigeria, and other countries in Africa directly depend on whether farmers and agricultural companies in Ukraine can operate normally," Zelensky added.
Critical financing
DTEK, Ukraine's largest private energy company, is set to receive $112 million from the EU and the U.S. to restore facilities damaged in Russian attacks and help it get through winter.
Why this matters: DTEK, as a private energy company owned by Ukraine’s richest man Rinat Akhmetov, has largely been shut out from international financing to make repairs on its critical infrastructure damaged by Russia throughout the war over to its ownership.
The newly announced financing is the first time since the start of the full-scale invasion that DTEK is receiving direct financing to help it restore capacity, the company said.
Russian attacks destroyed 90% of DTEK's generation capacity during an aerial campaign in the spring and summer earlier this year. The company put a plan to repair 65% of what was damaged in those months by this winter, but has declined to say publicly how much it was able to repair.
DTEK spent around $100 million of its own money last year, and around $65 million this year to repair damages caused by Russian missiles and drones.
Reuters reported on Nov. 21 that Russia’s missile strikes on Nov. 16-17 hit three of the five operational thermal power plants owned by DTEK, leaving one plant offline.
Meanwhile, a controversy over financing DTEK spilled out into public view after Italian media reported that the European Bank for Reconstruction and Development, Ukraine’s largest institutional investor, will continue to refuse giving any money to the company over the fact that it’s owned by an oligarch.
In an interview with Italy's Corrierte della Sera, the bank’s president said, without mentioning Akhmetov by name, that the EBRD has “very firm ideas” on Ukraine freeing itself from the influence of oligarchs, and that “accepting compromises on this point would damage the country’s prospects in the long term.”
In a statement, DTEK said it was disappointed by the president’s words, writing, “The company hopes that the EBRD will further contribute to the restoration of Ukraine’s energy sector.”
“DTEK is ready to work with the bank to secure peace and light in Ukraine,” the statement read.
Russian assets — What will Trump do with them?
As Donald Trump prepares to take office this January, one open question remains over how he’ll approach the divisive matter of Russian Central Bank assets frozen across the West.
So far, Trump has not directly commented on the frozen Russian assets and his unpredictability makes it hard to know which route he will take.
Mobilizing the assets and making Russia pay fits in with his strong-man approach but he may also err on the side of caution for fear of foreign countries, like China and Saudi Arabia, pulling out their assets from the U.S., business reporter Dominic Culverwell writes in his latest.
He could pressure a reluctant Brussels to pick up the slack and resolve the EU’s bickering over the issue.
At least for now, it seems unlikely that Trump would unfreeze the assets and hand them back to Russia.
“There's no automatic procedure for Trump to get rid of this whole thing entirely,” Anna Vlasyuk, a legal research fellow at the Kyiv School of Economics (KSE) told the Kyiv Independent.
Read more here.
Turning drones from low-cost to boutique
After spending around a year piloting mostly reconnaissance drones, Buntar Aerospace founder Ivan Kaunov recognized the need for a more perfect guidance system for drones being used on the battlefield in Ukraine.
He assembled a wishlist of the best gear to put into a Ukrainian drone that would be meant for long-term, deep surveillance usage.
Kaunov rallied enough interest to translate into funding for a prototype of the Buntar-1, the basis for his current company, Buntar Aerospace.
Over the past year, Buntar has armed itself with nearly $3 million in investment from Ukraine, the EU, and the U.S.
Kaunov hopes to build what will be the Cadillac of Ukrainian surveillance drones – high-cost, premium quality, and repeat usage — in a major divergence from the cheap one-time use drones that have become symbols of Ukraine’s resistance to Russia’s invasion.
Read the full profile here.
What else is happening
Ukraine to receive $4.8 billion from World Bank
Ukraine and the World Bank signed a loan agreement worth $4.8 billion, which Kyiv will use for priority budget expenditures, the Finance Ministry said in a statement. Finance Minister Serhii Marchenko and the World Bank's Eastern Europe Operations Manager Kevin Tomlinson signed the agreement for the loan on Nov. 22, which falls under the Public Expenditures for Administrative Capacity Endurance (PEACE) project. Since the start of the invasion, Ukraine has received around $35.5 billion through the PEACE project.
UK sanctions Ukrainian oligarch-in-exile Dmytro Firtash and others in anti-corruption crackdown
The U.K. has sanctioned the exiled Ukrainian oligarch Dmytro Firtash, along with Angolan billionaire Isabel dos Santos, and Latvian politician Aivars Lembergs, the U.K. government announced on Nov. 21. The statement noted that freezing their assets is part of a crackdown on global corruption and "dirty money." Firtash allegedly "extracted hundreds of millions of pounds from Ukraine" and invested significant amounts of the gains in U.K. properties. His wife, Lada Firtash, was also sanctioned as she “profited from his corruption and holds U.K. assets on his behalf.”
Ukraine '95% ready' to resume flights but needs adequate air defenses, minister says
Ukraine is "95%" ready to resume commercial flights, but the key remaining factor is to ensure the safety of passengers, Communities and Territories Development Minister Oleksii Kuleba said on Nov. 21. Speaking with the Suspilne broadcaster, the minister said: "The security architecture requires very serious air defenses... so when we have enough air defense for this or that airport, we will be able to talk about it. Unfortunately, today it is impractical."
Ukrnafta acquires 51% share in Shell's gas station network in Ukraine
Ukrnafta, a state-owned oil and gas extraction company that is a subsidiary of Naftogaz, has bought a 51% stake in Shell's gas station network in Ukraine, the press service of Naftogaz reported on Nov. 19. Ukrnafta will now hold a majority stake in a network of 118 operational gas stations. Shell, one of Ukraine’s top 10 fuel networks, ranks number 9 in fuel sales and number 7 in station numbers, with most stations located in high-traffic areas. All 1,550 employees will keep their jobs, and rebranding is set to be completed within a year.
In case you missed it:
More than two years after Russia’s full-scale invasion delayed its release and upended its developers’ lives, Ukraine’s "S.T.A.L.K.E.R. 2" — one of the most anticipated video games of the year — was released on Nov. 20. Originally set for a release in April 2022, the game experienced several delays when many of its staff were forced to flee Ukraine that February. Ahead of the release this week, presales of the game took it to the top spot for games sold on the popular video game platform Steam. Read more here.
