Kyiv, Ukraine, October 20, 2021—Private sector-led investment and modernization of Chornomorsk port, one of the largest in the Black Sea region, can increase Ukraine's import and export capacity, and boost the country's trade competitiveness and economic growth. In response, IFC and the European Bank for Reconstruction and Development (EBRD), in partnership with the Global Infrastructure Facility (GIF), will support the Ministry of Infrastructure and the Ukrainian Sea Ports Authority in structuring and tendering a public-private partnership (PPP) to modernize the Chornomorsk port.
IFC and the EBRD will help the government prepare a comprehensive contractual framework, define bidding criteria and tender rules, as well as liaise with potential investors until commercial closing of the transactions.
"Cooperating with investors is a priority for us to develop and strengthen Ukraine's port industry, with our partners—IFC and the EBRD—supporting us. The Chornomorsk port is the third largest transshipment port in Ukraine in terms of total volume, which makes this concession project crucial for the country," said Oleksandr Kubrakov, the Minister of Infrastructure of Ukraine.
The concession of the Chornomorsk container terminal and railway-ferry complex will help modernize the terminal's assets, improve, and optimize its operations, and develop additional services for carriers and cargo owners. As one of the largest maritime terminals in Ukraine, the port's improvements will boost the country's competitiveness by attracting leading international shipping operators with optimized cargo logistics and higher quality services.
"The upcoming concession of the Chornomorsk port terminals is a huge step toward the development of Ukraine's port industry, driving Ukraine's economic growth and increasing its competitiveness in the global market," said Mehita Fanny Sylla, IFC's Manager for the Public-Private Partnership (PPP) in Europe. "The modernization of the Chornomorsk port, along with the success of the concessions in Kherson and Olvia, will prompt further private-sector led transformation of the sector."
In 2020, the country's exports totaled $47 billion and its imports reached $57 billion, according to Ukraine's Ministry for Development of Economy, Trade and Agriculture, with much of the transport of goods reliant on shipping. With ports operating only at partial capacity, the government plans to double cargo turnover in seaports by 2038. The infrastructure upgrades of the Chornomorsk port along with Kherson and Olvia, two mid-sized ports also on the Black Sea, will play a critical role in reaching the country's goal.
"We are pleased to reach this new milestone in our PPP advisory work. Together with IFC, we recognize how critical port infrastructure is for 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," said Mark Magaletsky, EBRD Deputy Head of Ukraine, Sustainable Infrastructure.
The Chornomorsk project follows two recent successful tenders in the country's maritime infrastructure sector. In 2020, IFC, in partnership with the EBRD and the GIF, a multi donor fund created to support public-private partnerships, assisted Ukraine's Ministry of Infrastructure with the structuring of the concessions for the ports of Kherson and Olvia.
In addition to maritime infrastructure, IFC is analyzing PPP opportunities in the road, rail, energy, and health care sectors, to help leverage private investments and drive the nation's economic growth.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2021, IFC committed a record $31.5 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic. For more information, visit www.ifc.org.
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