Archive for the ‘EBRD invests’ Category

Fake Euro 2012 goods thrive on Ukraine’s “7 Kilometre” black market.

The products Tayo Abraham sells today made the same voyage the Nigerian trader did five years ago. They came over the Black Sea.
Five years ago, Abraham, 28, left his wife back in Africa and headed to Europe, the distant land of promise. He ended up on its outer edge, here, in the Ukrainian Black Sea port of Odessa.
Abraham plies his trade in what must be Europe’s largest open-air market.
It stands on the outskirts of Odessa and is known as “7 Kilometre.” This labyrinth of shipping containers covers an area the size of 110 soccer fields, and it would be easy to get lost if the metal containers weren’t painted blue, green or orange to identify their sector.
Every day, this city of sheet steel attracts some 200,000 shoppers who buy €20 million ($25.8 million) worth of goods.
The market’s management says some 60,000 people work here and that the place gives the entire region an important economic boost.
But the container mall is also a hub for product pirates and smugglers.
It is regarded as the biggest black market on the European continent.
Traders sell fake Adidas shoes and €15 knock-offs of Louis Vuitton luxury handbags.
Tayo Abraham takes a pair of sneakers from one of his boxes. With their three stripes, they are the spitting image of Adidas brand shoes.
“In truth they come from China or Turkey,” says Abraham. A pair costs the equivalent of €12. He also sells shoes bearing the exclusive Lacoste crocodile for an affordable €15.
Demand is strong. Abraham rents two containers piled on top of each other. He has turned the lower one into an improvised shoe shop with shelves and a cracked mirror. The container above is filled with boxes of merchandise for wholesale customers who buy bulk and smuggle the goods westward into the rest of Europe.
The 2012 European soccer championship, co-hosted by Ukraine and Poland, is big business for the traders of “7 Kilometre.”
Abraham fishes a box of flip-flop sandals from his container. They are adorned with the brand name “UEFA Euro 2012” and the logo of the championship, a soccer ball framed by two flowers in the national colours of co-hosts Poland and Ukraine.
“I’m selling crateloads of them,” says Abraham.
He’s also making a pile in Euro 2012 felt hats and stuffed toy mascots of the tournament, Slavek and Slavko, the rights to which are owned by U.S. media giant Warner Bros.
The body that governs European soccer, UEFA, is losing merchandising revenue as a result. “We don’t know how much counterfeit stock is on the market,” says UEFA’s sales manager Thibaut Potdevin. “So it is hard for us to estimate the damage.”
There isn’t much that UEFA can do about it. Ukraine passed a law before the championship to protect UEFA’s trademark.
But black markets like that in Odessa have influential allies among the police and local authorities. Market director Anatoly Berladin used to be deputy head of the local militia force. Oleg Kolesnikov, one of the bazaar’s backers, is a member of Odessa city council. “So far, no one has managed to disrupt our business,” he says.
No one has made a serious effort to do so. It’s an open secret in Odessa that Ukrainian authorities are knowingly letting counterfeit merchandise from Turkey and China get through the customs controls.
Abraham said the wholesaler who supplies him bribes the port authority.
“It is clear that the customs authority is getting a share of the proceeds from the smuggling,” says an employee of Warner Bros. who did not want to be named.
When traders come to buy whole crates of trainers and Euro flip-flops, Abraham knows where they’re headed. The smugglers transport the goods to the breakaway territory of Transnistria some 80 kilometres away. The strip of land between Moldova and Ukraine isn’t internationally recognized and is regarded as a bastion of smugglers. From there, the counterfeit goods are taken to Moldova and then on to Romania — in the EU.
The market administration of “7 Kilometres” charges about $300 rent per container per month, and the lease on a store on the site costs about $1,000.
But it’s worth the money, even for small traders.
Abraham earns about $1,200 per month.
Market director Berladin denies there is any black market trading or product piracy. “Everything here is above board,” he insists.” But he adds that it’s impossible to check each one of the 14,000 traders.
While thousands of cars cram the giant parking area, a short distance away stands a branch of Epicenter, a chain of DIY stores that is sponsoring the tournament and is entitled to sell official fan merchandise.
There’s no shortage of parking spots there — the difference is they are all empty.

EBRD invests in first wind power project in Ukraine.

The European Bank for Reconstruction and Development is making its first ever investment into wind power generation in Ukraine by organising a €13.3 million financing package to Eco-Optima, a Ukrainian-Italian joint venture company, which will operate a wind farm in Staryy Sambir region of western Ukraine.
The European Bank for Reconstruction and Development is making its first ever investment into wind power generation in Ukraine by organising a €13.3 million financing package to Eco-Optima, a Ukrainian-Italian joint venture company, which will operate a wind farm in Staryy Sambir region of western Ukraine.
The loan will consist of two parallel tranches: a 10-year EBRD loan of €9.5 million and a 15-year loan of €3.8 million from the Clean Technology Fund (CTF).
The loan proceeds will be used to construct and operate a wind farm with a total capacity of 12.5 MW. It will consist of 5 wind turbines and is expected to generate at least 25.5 GWh every year. The project will improve the quality and reliability of power supply in the Lviv region and will secure electricity supply to more than 10,000 households. The wind farm, which will be operational by the end 2012, should bring total annual reduction in carbon emissions to about 26,000 tonnes.
This is the first project to receive funding under the EBRD’s Ukrainian Sustainable Energy Lending Facility (USELF), an investment facility of €70 million (€50 million from EBRD and €20 million from the CTF) designed to provide finance to private local enterprises wishing to invest in renewable energy projects in Ukraine. Technical assistance on projects preparation, regulatory framework development and strategic environmental review is funded by the Global Environmental Facility. It helped the Ukrainian authorities introduce necessary regulatory changes to make renewable energy projects commercially viable and attractive for investors.
Olivier Descamps, EBRD Managing Director for Turkey, Eastern Europe, Caucasus, and Central Asia, said: “Ukraine has a great potential in developing renewable energy generation and this project is our contribution to this good cause. We are committed to support the development of wind, solar, small hydro and biomass energy projects in Ukraine through our own funds and by providing technical assistance to them”.
Maxim Kozytskyy, Eco-Optima Director, added: “We appreciate EBRD’s catalyst role in the Ukrainian renewable energy sector. Our project was made possible thanks to the USELF programme which combined both the EBRD and the CTF financing as well as consultants’ support”.
Monique Barbut, CEO and Chairperson of the Global Environment Facility, said: “This new investment is a stellar example of how public private partnerships can leverage public funds and encourage private sector investment in clean energy and other environmentally sound technologies. We are committed to working with EBRD and other financial institutions to create many more of these successful partnerships.”
CTF was established to provide developing countries with positive incentives to adopt technologies that have a high potential for minimising long-term greenhouse gas emissions. The CTF finances programmes in 12 countries and one region.
The EBRD’s Sustainable Energy Initiative (SEI) was launched in 2006 to address the challenges of energy efficiency and climate change. In an attempt to make Ukraine more energy efficient and energy independent, the Bank has already invested €1.3 billion in 60 sustainable energy projects for the total value of almost € 6 billion.
The EBRD is the largest financial investor in Ukraine. To date, the Bank has committed over €7.4 billion (US$ 9.76 billion) through 293 projects.