1. EURO 2012 Football Championship As Business Opportunity Israel Business Conference December 2007 European Bank for Reconstruction and Development Your Partner in Ukraine Mark Magaletsky, Principal Banker

2. What is EBRD?  Established in 1991 to promote market reforms in ex- communist countries of Eastern and Central Europe  Owned by 61 countries and two multilateral institutions  Operates in both public and private sectors on the basis of the market principles – no “soft loans”  As of end 2006, EUR 33.3 bn of cumulative commitments, mobilizing EUR 69.6 bn from other sources for a total project value of EUR 102.9 bn

3. EBRD in Ukraine since 1993….  Extensive knowledge of local economy, business environment and practices and in problem resolution.  Excellent working relationships with the central and local Government at the highest levels.  Full range of financial products and tenor tailored to client needs (debt, equity, trade finance).  Door opener for foreign investors: Willingness to share risks, including political risks.

4. Signed 183 projects for over EUR 3.0 billion Financial Institutions Industry Agribusiness Transport Telecommunications Property and Tourism Power and Energy Natural Resources Municipal Infrastructure EBRD Cumulative Business Volume in Ukraine – Allocation by Sector (end 2007)

5. EURO 2012: Hosting Cities in Ukraine  Kiev  Dnipropetrovsk  Lviv  Donetsk  Kharkiv  Odessa

6. EURO 2012: National Preparation Program  Approved by the Government of Ukraine  Covers all related preparatory work: sport infrastructure, transport, utilities, emergency services etc  Total size of investments - $25 bn  $20 bn are expected to come from the private investors and financial institutions

7. EURO 2012: Key Sport Arenas  Kiev: $300 mln major reconstruction of the National Olympic Stadium, to be funded by the state, works not started yet  Dnipropetrovsk: new arena is nearing completion, funded by the local sponsors  Donetsk: new arena is under construction, completion in 2008, funded by the local sponsors  Kharkiv: construction of the new arena is not started yet, to be funded by the local sponsors  Odessa: construction of the new arena is not started yet, to funded by the local sponsors (?)  Lviv: investment tender for construction of the new arena is announced, closing on 18 December 2007

8. EBRD in Ukraine Transport Sector  Projects in all key subsectors (railway, road, shipping, ports, aviation, air navigation, airports)  Experience with both public and private sector  More than $800 mln funding committed  Agreement on co-financing with European Investment Bank

9. Ongoing EBRD Transport Projects Relevant to EURO 2012  Rehabilitation of M06 road Kiev-Chop: –824 km magistral road connecting Kiev with EU border –EBRD financing €375 mln + €200 mln from EIB –I phase completed in 2005, II phase to be completed in 2008, III phase - in 2010  Financing of Ukrainian railways modernisation: –EBRD financing $172 mln –Reconstruction of Beskyd tunnel –Procurement of track maintenance machines for fast passenger services

10. Investment Opportunities in Ukraine Transport Sector Related to EURO 2012 Reconstruction of airports in the hosting cities  All hosting cities plan major reconstruction/expansion of the local airports (both airside and passenger terminals)  Size of investment projects range from $50 - $200 mln  All hosting airports (except Kiev Borispol) are controlled by the local authorities  Different development strategies  Opportunities for concessions (most likely Lviv and Odessa), but final decisions are yet to be made

11. Investment Opportunities in Ukraine Transport Sector Related to EURO 2012 Road sector  State Road Program is approved by the Government  Key sources of funding: state budget, loans from IFIs and commercial banks under sovereign guarantees, private investments  Good opportunities for contractors: volume of road works to reach about $2 bn p.a  Some opportunities for concessions, but specific projects are yet to be prepared

12. Investment Opportunities in Ukraine Transport Sector Related to EURO 2012 Railways  Railway infrastructure is state owned, no plans for privatization, but gradual opening of the sector to private business starting from non-core activities  Key opportunities for the private business at this stage:  For investors: leasing of the rolling stock (freight, passenger, locomotives)  For contractors: reconstruction of stations, tunnels, bridges, electrification of the lines

13. Investment Opportunities in Ukraine Municipal Sector Related to EURO 2012 Key features  Good base infrastructure in all hosting cities, but huge investment needs in upgrade and rehabilitation  Utilities are predominately owned by municipalities with limited private sector involvement in such areas as urban transport and waste management  Tariffs are usually below cost recovery  Limited opportunities for concessions (weak regulatory basis, political pressure)

14. EBRD in Ukraine Municipal Sector  Water / waste water project in Zaporizhzhia – USD 28 mln  Water / waste water project in Dnipropetrovsk – EUR 20 mln  Public transport project in Kyiv – EUR 100 mln  In preparation: –District heating projects in Cherkasy, Odessa, Vinnytsia, Dnipropetrovsk and Zhytomyr –Water and wastewater projects in Yalta and Zhytomyr  Total EBRD financing for projects signed and under preparation is around EUR 225 million

15. Investment Opportunities in Ukraine Tourism Sector Related to EURO 2012 Key features  Most of the hosting cities are “underhoteled”  All products are in demand: 2*/3*/4*/5*, international chains, boutiques, business class, hostels, out of city resorts  Private sector – to play a key role  Green light from the authorities (hopefully!) - municipalities are under pressure to deliver  Alternative solutions might be a success (e.g. sea-river cruise ships for overflow guests in Kiev, Dnipropetrovsk and Odessa)

16. EBRD in Ukraine Real Estate Sector Financing tailored to the nature of each project  Long-term (up to 10 years)  Local / foreign currency  Target gearing varies  Competitive pricing  Clear and fair distribution of risks and returns between different financing partners  Alignment of each financing feature (timing of disbursement / repayment, level of return, etc.) with the underlying risk  Financing predominantly for new developments

17. EBRD in Ukraine Real Estate Sector Radisson SAS Kiev  EUR 6.79 mln equity contribution (28.6% of the total equity)  EUR 1.5 mln stand-by equity  EUR 23.74 senior loan (including EUR 13.91 of the participating bank) Project  Development of the first international quality hotel in Ukraine  Experienced local and international sponsors  Classic project finance  Commissioned in 2005 EBRD participation

18. EBRD in Ukraine Real Estate Sector GTC Ukraine  EBRD’s USD 10 million equity contribution invested pro-rata with the sponsor in individual sub-projects  Potential additional support through senior debt financing at sub- project level Project  A well established international sponsor  Total equity investment of USD 100 million  Development of office, retail and residential projects in Kiev and major regional cities EBRD participation

19. CONCLUSIONS  Ukraine is close, big and growing  Do not wait until all is perfect! It will be too late then !!  Be careful, but start now.

20. How to contact us Tel: +380 44 270 6132 Fax: +380 44 270 6813 Email: kiev@kev.ebrd.com www.ebrd.com/ukraine Kiev Resident Office 27/23 Sofiyvska Street Kiev 01001 Ukraine