Ukraine is an attractive market for investment

Investments are the main engine for the development of the economy of any state. Their increase is influenced by the formation of an optimal climate for investors in the country. Often attention is paid to the actual volumes of incoming investments, for example, in the balancing electricity market in Ukraine. Also, important proper efficiency in the use of money. To create the most attractive conditions for investing in the economy, it is necessary to correctly build state policy. It should provide for the formation of organizational, legal, investment conditions for attracting funds from external and internal investors.

How to form investment attractiveness in Ukraine?

A huge number of works are devoted to the study of issues of investment attractiveness of the country. But this problem requires constant revision. It is necessary to take into account the dynamics of change, factors of external and internal nature that affect it:

  • indicators of the development of the world economy;
  • geopolitical situation;
  • other circumstances.

The successful development of any state is impossible when its regions do not develop, economic instability is noticed, inflationary expectations and an unstable exchange rate of the national currency are growing, and there is no stable medium and small business. Comprehensively resolve these issues by attracting investments in the development of industry only the government can.

The investment climate is a system of qualitative and quantitative indicators that fully characterize the social, political, and economic development of the country. The investment climate is most often considered in the context of investment attractiveness (IA). It is a key parameter of the investment climate in the state.

Investment attractiveness is a combination of factors that hinder or facilitate the process of internal and external investment in the economy of the region, the state as a whole. Issues related to investment attractiveness are considered at the level of the country as a whole or a group of states (EU, Southeast Asia).

Investors, before deciding to invest in industry or the agricultural sector, additionally analyze the following characteristics: the

  • state of the credit and financial system;
  • status granted to a foreign investor;
  • the state of the productive forces;
  • investment activity of residents (purchasing power);
  • the level of the existing investment infrastructure;
  • availability of foreign investment.

Less often, research is carried out at the regional level. A regional individual entrepreneur has a tangible impact on the formation of investment returns, the emergence of investment risks (venture investments), and other issues.

Actual volumes of investments in the economy of our state

Таблиця. Foreign investments in Ukraine for 2002-2019
Таблиця. Foreign investments in Ukraine for 2002-2019

According to the definition adopted by the OECD, direct investment is considered as international investment in cases where a resident, who acts as a direct investor, invests in a recipient (a specific enterprise located in another country). 

The IFI uses a slightly different formulation: «long-term investment by non-residents in the economy of the state».  

In some years, there has been an increase in direct investment with partial recessions. All recessions were caused by internal political and economic crises in the country, except for 2009 (world crisis).

Unfortunately, it is not possible to identify a clear upward or downward trend in volumes. 

Dynamics of foreign direct investment volumes for 2002-2019
Dynamics of foreign direct investment volumes for 2002-2019

It should be noted that investments in the economy of our state in the XXI century significantly exceed the investments of Ukraine in the economy of third countries. Analyzing investments in Ukraine by country, we can see that Cyprus occupies a leading position.  

It is necessary to assess the IA of the state not only by internal indicators but also in comparison with other states. This makes it possible to more accurately determine the bottlenecks of the domestic investment market.

From the global rankings, it can be seen that Ukraine has improved its performance on several criteria:

  • index characterizing economic freedom;
  • rating of attitudes towards corruption;
  • Doing Business rating, which determines how easy it is to do business in a country.

There is a slight decrease in some items.

Even though for a significant number of positions included in the world rankings, there is a positive trend (for example, investments in solar energy in Ukraine), the state’s IA has slightly decreased (to the level of 2016). 

This was influenced by a decrease in the investment attractiveness index (IAI):

Index of investment attractiveness of Ukraine for 2009-2019
Index of investment attractiveness of Ukraine for 2009-2019

This value assesses the attitude of business to the investment climate prevailing in the state:

  • <3 — negative;
  • 3≤ SMPS <4 — neutral;
  • ≥4 is positive.

The fall of the IAI was caused (according to the OECD) by the following factors:

  • political instability;
  • lack of judicial and land reforms;
  • significant corruption;
  • lack of qualified personnel.

The following are noted as positive changes in the formation of the business climate in Ukraine:

  • liberalization of legislation governing currency circulation;
  • the stability of the hryvnia;
  • decrease in the inflation rate;
  • fruitful cooperation with the IMF.

IA of our country over the past ten years has improved in terms of investments in alternative energy, but only slightly. Breakthrough changes were not achieved.

In the context of the country’s course towards European integration, restructuring of the state’s economy, taking into account the standards of a united Europe, developed corruption, growing inflation, economic and political instability, and other unfavorable factors, Ukraine needs effective and rapid reforms. Increasing IA should become one of the priority areas.

The government perfectly understands the tasks facing the state and makes every effort to stimulate internal and external investments in the economy, including the green energy sector of Ukraine.

Your reliable business partner in Ukraine

For your investments in the Ukrainian economy to be maximally protected, to ensure guaranteed profit and timely return on investment, you need to have a reliable and trusted partner, registered and working on the country’s market for a long time, that may become Avenston Group, founded in 2007. We started working on the development of elements for the manufacture of solar modules. Now the company has made significant progress in this direction. Our employees specialize in large investments in promising developments in solar energy, other areas of renewable energy sources, and the introduction of the latest renewable energy technologies.

The company is developing its activities in other areas. Independent structural divisions have been created, specializing in:

  • investment (primarily in projects related to renewable energy sources);
  • engineering;
  • consulting.

Our group of companies represents a technical and financial advisory center with a consistently positive business reputation. We are ready to provide potential partners and customers, private and institutional investors with optimal, comprehensively balanced recommendations, support on any issues related to financing and attracting external sources to projects. In each specific case, an optimal business model is built, which ensures the accumulation of forces and funds to obtain the best result.

We are ready to undertake turnkey management of any projects in the field of RES implementation. Each project is worked out individually. Cooperation with us allows investors to receive maximum dividends from timely and correctly invested funds. Despite everything, the international community evaluates our country as a platform with the necessary investment attractiveness and ample opportunities to increase it.

 

Key business activities of Avenston

Utility-Scale Solar Plants

We build on-grid utility-scale solar PV power plants to operate using a "green" tariff or to sell electricity through a system of "green" auctions. On-grid ground-mounted solar power plants - project, turnkey EPC-contract, connection to grid.
Discover more

Commercial and Industrial Solar Plants

Since 2010, we have been performing a full range of development, engineering, construction, and maintenance for all types of solar photovoltaic power systems. Huge practical experience in the construction of solar power plants for commercial use.
Discover more

Energy Storage Systems

A full range of services for the implementation of battery energy storage systems (BESS) for solar PV power plants and other renewable energy facilities, industry and the commercial sector. Development, design, construction and commissioning.
Discover more

Equipment for Solar Power Farms

Avenston has many years of experience in planning and procurement, and supply of equipment and materials to the site. The coordination of suppliers, cost and choice of payment methods of goods delivery, and choice of optimal delivery schedule.
Discover more