The following is the Nov. 12, 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.
As Donald Trump prepares to reenter the White House, the biggest question hanging over Ukraine is what his return means for future U.S. financial and military aid to Kyiv as it fights Russia’s war.
Trump has repeatedly said, without saying how, that he would end the war on day one of becoming president and criticized aid to Ukraine, calling President Volodymyr Zelensky a great “salesman.” His son, Donald Trump Jr., mocked aid to Ukraine on Instagram with an image of Zelensky and the caption: “You’re 38 days from losing your allowance.”
It is still uncertain what Trump will actually do to address Russia’s ongoing invasion of Ukraine, and whether he will manage to end the war as quickly as he hopes remains to be seen.
One thing is for certain: U.S. aid to Ukraine has been a lifeline that has allowed Ukraine to keep fighting and keep its economy afloat — if Trump decides to block further aid to Ukraine and Kyiv’s European allies also pull back, it could seriously threaten Ukraine’s survival.
Ukraine’s government said earlier this year that it is predicting a budget deficit of 19% as defense spending remains high, leaving a hole of around $35 billion that will have to be filled by external financing.
While more than half of that amount will come from the International Monetary Fund, the rest — around $15 billion — will likely need to be sourced from loans from G7 countries, Bloomberg earlier reported, citing officials close to the matter.
As President Joe Biden’s time in office runs out, Ukraine’s allies on both sides of the Atlantic are urging him to act quickly to get Kyiv badly needed aid.
The Telegraph reported on Nov. 12 that British Prime Minister Keir Starmer is preparing to press Biden to release $20 billion in funds that are part of a $50 billion loan agreed by G7 world leaders back in June, funded in part on the interest earned on Russian assets seized at the start of the full-scale invasion.
Speaking of Russian assets — no decision has been made on seizing the $300 billion in immobilized Russian Central Bank assets and getting them to Ukraine. Most of the assets are tied up in Europe where policymakers claim the risks are too high to make a move on confiscating them and releasing them to Kyiv.
Biden’s team has already announced it’s going to appeal to Congress to approve more aid to Ukraine before his time is up and is reportedly moving to send Ukraine as much military aid as possible in the upcoming months.
If Biden is interested in cementing his legacy as the president who showed up for Ukraine, the time is now.
Air travel could return early next year
Ukraine is planning to reopen one airport by the end of January 2025, just shy of three years after all airports shuttered at the start of Russia’s full-scale invasion, Marsh McLennan Senior Partner Crispin Ellison said at the Kyiv International Economic Forum on Nov. 7.
It is unknown exactly which airport will open first, but according to Ellison, the likely scenario is Lviv first, followed by Kyiv’s Boryspil.
Securing insurance for aviation will be easier if planes use Lviv Airport as it’s close to the country’s western border and far from the front lines, but President Volodymyr Zelensky insists that Boryspil International Airport be opened first, Ellison said. It’s unclear why Zelensky is so dead set on Boryspil opening first.
It’s up to the Presidential Office to make the final decision on flights as it needs to take into account the security situation and the performance of Ukrainian air defenses. Given Russia has been attacking Kyiv and its suburbs, which includes Boryspil, with drones on a daily basis, it’s hard to imagine the security situation would allow for air travel any time soon.
“What we need is a confirmation around the (air) defenses and the military situation, which allows regulatory sign-off,” Ellison said.
Read more here.
Hitting the million mark
One million drones have already been delivered to the front lines in 2024, with 96% of them Ukrainian-made, Digital Transformation Minister Mykhailo Fedorov said on Nov. 11.
“Drones have become a real game changer in the war, striking at vehicles and infantry every day and hitting strategic targets behind enemy lines,” he wrote in a post on Telegram.
Through its Brave1 initiative to spur defense tech development, the country has already attracted $25 million in investments from international investors, Fedorov said. By the end of the year, the figure may reach $50 million, according to the minister.
IMF back in town
The International Monetary Fund has arrived in Kyiv to kick off its latest assessment of a four-year $15-billion loan program for Ukraine, which could allow for the release of another $1.1 billion tranche if the government has fulfilled its commitments under the program.
“The in-person mission to Kyiv ends on Nov. 18, with discussions expected to continue virtually thereafter,” Priscilla Toffano, the IMF’s resident representative in Ukraine, told Bloomberg.
Since the start of the full-scale invasion, the IMF has released some $9.8 billion in loans to Kyiv — the first time the fund has loaned to a country at war.
There’s one thing the IMF isn’t too happy about and will likely raise in conversations — why President Volodymyr Zelensky still hasn’t signed a law passed last month on a tax increase — a move the IMF is expecting from its borrower.
Stay tuned for more.
Ukrainian Metro game series ventures into VR
Metro Awakening, the fourth video game in the popular Ukrainian-born post-apocalyptic survival franchise set in Russia’s underground subway, was released on Nov. 7 by the virtual reality (VR) company Vertigo Games.
In what may be one of the few remaining public collaborations between Ukrainians and Russians in the creative industries, exiled Russian writer Dmitry Glukhovsky, whose novels formed the basis of the franchise, contributed to scripting this standalone prequel.
Prior to the full-scale invasion, Ukraine was home to hundreds of video game companies and an estimated tens of thousands of Ukrainian video game developers. Though the war has disrupted the young and booming industry, many companies have continued their operations, including the globally successful GSC Game World, whose S.T.A.L.K.E.R. 2 is set to release Nov. 20.
Read more here.
What else is happening
Ukraine’s 2025 budget includes $1.3 billion for weapons production, minister says
Some Hr 54.55 billion ($1.3 billion) will be directly allocated for the development and implementation of new technologies, and the expansion of defense production capacity, Strategic Industries Minister Herman Smetanin said on Nov. 12. The minister added that the 2025 figure is almost Hr 3.5 billion ($84.4 million) more than in 2024. Another Hr 500 million will be allocated to an affordable loans program for defense companies.
Ukraine imposes emergency blackouts across country due to threat of energy sector attacks
Ukraine briefly introduced emergency blackouts across the country due to the threat of Russian attacks against critical energy infrastructure overnight on Nov. 11. “The measures taken are aimed at preserving the power system of Ukraine,” Cherkasy Oblast Governor Ihor Taburets said. Ukrainian officials have warned that Moscow is preparing to carry out renewed strikes against the country’s energy system during what they say could be the most difficult winter since the start of the invasion.
American AI company Vantiq launches project to develop ‘smart cities’ in Ukraine
U.S tech company Vantiq has donated AI software worth $500,000 to develop smart cities — those that use information technologies to increase operational efficiency — in Ukraine, the company’s VP of Partnerships David Sprinzen announced at the Mayor’s Club Summit in Kyiv on Nov. 8. The memorandum of understanding lays out a smart system for over 100 industrial parks across Ukraine, that has the potential to impact the lives of 2.5 million citizens and help create “hyper-modern” cities, Sprinzen said. Vantiq develops AI for quick decision-making based on data collected by cameras, satellite imagery, social media, roadway monitoring systems, and drones.
No Azeri gas deal currently on table to maintain flows via Ukraine, Naftogaz CEO says
No deal is currently on the table between Europe and Azerbaijan to keep gas flowing through Ukraine once a transit deal with Russia expires at the end of the year, despite reports a contract was nearing, CEO of Ukrainian state-owned oil and gas giant Naftogaz Oleskiy Chernyshov told the Kyiv Independent on sidelines of the Kyiv International Economic Forum on Nov. 7. “There is no alternative model at this moment on the table,” adding that Ukraine “is preparing for the full stop of gas transit by the end of the year” once the deal expires.
World’s largest business organization cuts arbitration costs to boost foreign investment in Ukraine’s reconstruction
The International Chamber of Commerce (ICC) will lower the costs of its arbitration court for foreign investors involved in Ukraine’s reconstruction projects to encourage much-needed investment, the ICC Secretary General John Denton said at the Kyiv International Economic Forum on Nov. 7. “The big issue for a foreign investor is clear access to dispute settlement,” he said. “We want to encourage more investment to support the economic front.”
