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THIS WEEK IN UKRAINE

16 January 2025

Ukraine's Diplomatic Efforts This Week

From January 10–15, 2025, President Volodymyr Zelenskyy continued critical diplomatic engagements to bolster Ukraine’s international support:

These engagements demonstrate Ukraine's continued push for international cooperation and strengthened defense capabilities.

Ukraine and Latvia Explore Joint Drone Production Ventures

Ukraine and Latvia are considering the establishment of joint ventures to produce drones, including long-range UAVs, as discussed during a meeting between Ukraine’s Defense Minister Rustem Umerov and Latvian Seimas Speaker Daiga Mierina in Kyiv. Latvia, a leader in the Drone Coalition, is focused on strengthening partnerships and leveraging frozen Russian assets to fund such initiatives. Enhancing Ukraine's air defense and fostering defense industry collaboration also topped the agenda, with both nations committed to advancing defense technology and production capabilities. 

Ukraine Launches Updated Industrial Parks Catalog

Ukraine's Ministry of Economy has released an updated catalog of industrial parks, offering businesses a comprehensive tool to find locations with advanced infrastructure, tax incentives, and investment opportunities. The catalog covers 100 registered parks, showcasing specialization, transportation links, and available utilities. Highlights include tax exemptions (e.g., 10-year corporate tax holidays with reinvestment), VAT-free equipment imports, and discounted land rates. With every hectare creating 50 jobs and $1 public investment attracting $6 private, the initiative accelerates economic recovery and growth. Notable investments include 925.05M UAH in escrow accounts for 13 applicants. Businesses and investors are encouraged to leverage this platform to contribute to Ukraine’s economic resurgence. 

Ukraine Adopts WINWIN Innovation Strategy for 2030

Ukraine’s Ministry of Digital Transformation has unveiled a comprehensive Innovation Strategy to 2030, targeting economic and technological growth. Key priorities include DefenseTech, MedTech, Biotech, AI, GovTech, and GreenTech, alongside ambitious projects like building the country’s first chip factory (Chips UA), developing drone-based harvesters, and launching innovation clusters and competence centers. The strategy aims to integrate Ukraine into global value chains, increase the GDP share of innovative products to 15–20%, and position the country among the top global innovation leaders. Proposed actions include creating an innovation council, enhancing IP protection, and fostering public-private partnerships. 

Ukraine Strengthens Collaboration with the International Energy Agency

The Ukrainian government has approved a Joint Work Program with the International Energy Agency (IEA) for 2025–2026, authorizing Energy Minister Herman Halushchenko to sign the agreement. The program builds on prior achievements, focusing on energy security, renewable energy development, European market integration, and innovative technologies like biomethane and low-carbon hydrogen. It aims to bolster Ukraine's energy resilience and sustainability, aligning with its 2050 Energy Strategy and the Paris Agreement goals, while positioning Ukraine as a leader in green energy innovation. 

DTEK Partners with Fluence on €140M Energy Storage Project

DTEK has selected American company Fluence Energy to deliver a €140M project deploying six advanced energy storage systems across Ukraine with a total capacity of 200 MW and 400 MWh, enough to power 600,000 homes for two hours. Scheduled for completion by late 2025, this initiative will enhance Ukraine's energy resilience and security during war, supporting renewable integration and decentralized energy management. Fluence’s cutting-edge technology will enable rapid response and grid stabilization, marking Ukraine's energy infrastructure as a regional leader in innovation. The project includes training DTEK staff for long-term operational sustainability. 

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Knauf Relocates German Factory to Ukraine Amid War

German building materials giant Knauf is relocating a factory from southern Germany to Borshchiv, Ukraine, investing €150M in a project that will fully launch by 2026. The new plant will produce 30M m² of drywall and 320,000 tons of dry mixes annually, supporting Ukraine's reconstruction and addressing rising demand in Western regions. This move reduces production costs by cutting logistics expenses and prepares Knauf to capture post-war market growth. Knauf's Ukrainian revenue grew 66% in 2023, and the company continues to dominate the local market with a 65% share in drywall and 90% in dry mixes. 

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