UKRAINIAN INFRASTRUCTURE OPEN FOR INVESTORS MINISTRY OF INFRASTRUCTURE

UKRAINIAN INFRASTRUCTURE: OPEN FOR INVESTORS MINISTRY OF INFRASTRUCTURE OF UKRAINE October 2016

ATTRACTIVE GEOGRAFICAL LOCATION: UKRAINE CONNECTS EUROPE AND ASIA Geographical center of Europe 5 Pan European transport corridors 18 EU routes Ideal trade hub between EU, Middle East and Asia Kyiv Ukraine 2

UKRAINE: COMFORT FOR INVESTORS EFFICIENT & CHEAP LABOR FORCE VAT REIMBURASMENT PROBLEM SOLVED BAN ON REPATRIATION OF DIVIDENDS LIFTED SIMPLIFIED COMPANY REGISTRATION PROCESS POLITICAL WILL AT ALL LEVELS INVESTMENT PROMOTION OFFICE IS IN PLACE BEST TIME TO ENTER THE MARKET

INFRASTRACTURE: KEY PRIORITIES REFORMS TARGETS PRIVATIZATION of SOEs Private Operators on RIVERS PORTS PPP/ Concession of SEAPORTS PPP/ Concession of AIRPORTS CAPEX in MOTORWAYS CAPEX in Ukrainian POST RAILWAYS Private Operators LEGISLATION New Law on Privatization is in process Law on Inland Waterways is in process PPP Project Office is established New Law on Concession is to be voted in 2017 State road fund is established Law on Railways 4

INFRASTRUCTURE: HUGE GROWTH POTENTIAL Ukraine cargo transportation structure, 2015 the most extensive railroad networks in Europe handling a substantial part of 13% passenger and freight traffic 50% road network is no less extensive, it covers the country’s entire territory and makes possible Ukraine’s 28% Roads run through Ukrainian territory Ukraine has 8% Railway 5 out of 10 European transport corridors deliveries to any point of destination Water Avia other reconstruction of river waterways The upcoming will help river transport become a worthy alternative to its rail and road counterparts 5

UKRAINIAN SEAPORTS – KEY IN THE BLACK SEA REGION 13 seaports* Ukraine position in worldwide trade volumes: Olvia (ex Oktyabrsk) # 1 Sunflower oil Chornomorsk # 3 Grains following whole EU and USA # 4 Iron ore following Australia, Brazil and South Africa Ukraine handles every 3 rd ton of cargo in the Black Sea region, 2015 Cargo turnover by sea ports, Mt 9 m 2016 29. 6 Total 96. 7 Mt 18. 6 6% 11% 16. 0 11. 6 33% he rs 1. 1 Ot n so er ya rd 2. 7 Kh ns k l ai Be kt ia 2. 9 Russia Ukraine Ol vi a (e x. O m br sk po iu ar M 4. 1 Iz ) 4. 3 l sk or no m Ch or M uk ol ai v es sa Od zh ny 42% mln. tons 5. 8 Yu 452 * Not included Crimea Romania Bulgaria Georgia Turkey 6

OPPORTUNITIES IN SEAPORTS ⇒Government initiates new concession legislation ⇒Big 4 audit of all state stevedores ⇒Further deregulation: in 2015 vessels waiting time decreased by 14 x times. Current vessel clearance procedure is 15 minutes Investments in Ukraine ALREADY 2017 E Grain becomes main product for seaports in 2016: • 27. 4 mln tons for 9 m 2016 • +6% vs 2015 and +20% vs 2014 Huge potential for grain logistics growth • 90% of grain export is transported through seaports • Up to 50% of grains cargo supplied by multinational companies Grains, Iron ore, Black iron - 68% of ports turnover in 9 m 2016 28% 31% 97 mln tons 13% Grain Iron ore Black iron other 27% 7

YUZHNYI HARBOUR - #3 IN THE BLACK SEA REGION Key points: 5, 5 km quay line Up to 19. 0 m max draft Ore, coal, grain, chemicals – core products Vessel types: Capesize, Panamax 9 m 2016 results: 29. 61 mln tons turnover 61`580 TEU Yuzhnyy seaport view Yuzhnyy harbour turnover, 9 m 2016 9% Ore 7% 9% 18% Grain 29. 6 mln tons 53% Coal Chemicals Other Fertilizers 8

STATE STEVEDORING COMPANY “YUZHNYI CSP” Largest iron ore and coal terminal 14. 3 -19. 0 m draft & Maximum draft in Ukraine 7 berths 40 k t / day loading intensity 650 railcars/ day loading intensity 1, 000 ths tons storage capacity 41 cranes 7 port fleet 31% of cargo in Yuzhnyi Harbour 16. 8 mln tons cargo in 2015 Balk cargo, steel 9

CHERNOMORSK HARBOUR Key points: 6 km quay line Up to 13. 5 m max draft Grain, ores, containers– core products Vessel types: Panamax 9 m 2016 statistics: 11. 61 mln tons turnover 18`160 TEU Chornomorsk seaport view Chernomorsk harbour turnover, 9 m 2016 Grain 7% Ore 8% 16% 11. 6 mln tons 47% Containers Seeds oil Other 19% Constructions materials 10

STATE STEVEDORING COMPANY “CHORNOMORSK” 11. 9 mln tons cargo in 2015 grain, iron ore, autos 30. 3 mln tons annual capacity incl. 1`150 k TEU 254 k auto vehicles 11 -13. 5 m draft 13 tags 63 handling equipment Chornomorsk seaport view 11

SEAPORT CONCESSION: PILOT PROJECTS Mariupol Yuzhniy Odesa Olvia Berdyansk Kherson Azov Sea Illichivs k Black Sea Kerch Yevpatori a Feodosiya Yalta OLVIA SEAPORT (EX-OKTIABYRSK) agricultural Southern region location 1. 53 km length 10. 3 m depth KHERSON SEAPORT located between river Dnipro and sea 1. 26 km length 7. 6 m depth vessels < 230 m long, < 80 k tons DW vessels < 200 m long, < 15 k tons DW capacity is 2. 57 mln tons per year capacity is 3. 25 mln tons per year 318 k sq. m storage 178. 8 ha area sand pit facilities 16 ha area 12

PRIVATIZATION OF UKRAINIAN DANUBE SHIPPING COMPANY TOP national transportation operator on the Danube 20% of all Danube shipping 2. 7 m tons of cargo per year Danube basin Ukraine 469 units of fleet Revenue $55 m EBITDA $2 m Romania Moldova Bulgaria Serbia Croatia Hungary Slovakia Austria 13 Germany 13

ROADS: KEY INVESTMENT PROJECTS KEY PROJECTS ON ROADS RECONSTRUCTION SEE MAP Lviv – Krakovets (85 km, 1 cat), Odesa – Mykolaiv – Kherson (190 km, 1 cat), Dubno – Ternopil – Ivano-Frankivsk (220 km, cat 1), Rivne – Lutsk (65 km, cat 1), Poltava – Kharkiv (140 km, 1 cat), Zhytomyr – Vinnytsya (120 km, cat 1), Odesa – Palanki – Monashi (84 km, cat 2), Terebovlya – Chernivtsi (138 km, 2 cat). EXPECTED RESULTS • Realization will boost the economy of Ukraine • Improve quality of roads according to the international standards • Provide safer road infrastructure. Decrease ‘death on roads ratio’ $4, 5 bn required level of investments 4 years timeline 925 km roads length 3

CONSTRUCTION OF KYIV RING ROAD + 15% of annual traffic growth stimulates provides the need for construction of new roads and bridges • Length: overall – 214. 6 km, new direction – 148. 4 km, existing road – 66. 2 km • Category: 1 A • Lane: 4 • Width: 3. 75 m • Bridges across the Dnipro river: • North crossing 8200 m • South crossing 4823 m • Bridge across the Desna river - 1505 m • Overpass: 7 pcs. , 8910 m • Pipelines: 78 pcs. • Interchange of two levels: 35 pcs. • Land allocation: 1415 ha • Landwork volume: 21 840 thousand m 3 • Pavement area: 3. 6 million m 2 THE PROJECT WILL: • unload city of Kyiv from freight transit transport • develop infrastructure of Kyiv region • improve roads safety 4 years timeline 151. 6 km roads length 3 large bridges 72 small bridges 5

RAILWAY INFRASTRUCTURE: NEEDS FOR INVESTMENTS UKRZALIZNYTSYA TODAY 350 m tones of cargo per year 22 000 km of railway network 4 000 locomotives and 123 000 hoppers Largest employer in Ukraine Reform targets in 2016 -2017 Requirements for renewal of hoppers in Ukraine, units 12000 10000 8000 6367 7300 8226 9150 10095 11000 6000 4000 2000 0 2015 2016 2017 2018 2019 2020 § Corporatization is done: Supervisory Board and new professional management team since mid 2016 § Serious shortage of hoppers - railway reform is to open market for private operators § International partners are needed: GE, Bombardier and others, to facilitate JV’s with Ukrainian 16 producers 16

AIRPORTS DEVELOPMENT Key points: 19 airports: 2 SOEs, 2 PPP, 15 municipal 10. 7 mln passengers 120. 7 k aircrafts served Boryspil makes 60% of passengers flow Open Sky implemented for Odessa and Lviv Key functioning airports locations Strategy highlights: Governmental program of airports development till 2023 approved in 2016 with targets: • to create single state company to manage airports infrastructure • to reach 2 x times passengers flow increase till 2023 Ongoing reforms: Harmonization of legislation and technical regulations with the EU Open Sky agreement with the EU is negotiated Realization of 2023 airports development program 17

BORYSPIL: OPEN FOR INVESTORS KEY FACTORS INVESTMENT PROJECT Cargo terminal 8 mln passengers per year 33 airlines 76 regular flights 2 runways and new terminal Revenue $100 m 2016 E 18 Area 14 580 m 2 Warehouses 5 072 m 2 Capacity 2 686 pallets, 805 tons per day 18

LVIV AIRPORT: OPEN FOR INVESTORS KEY FACTORS 32 regular flights new terminal up to - 80% discount for new regular flights KEY FIGURES FACILITIES 47`233 m 2 terminal area 3`305 m runway 9 departure gates 1`125 parking places 2`000 PAX/hour capacity 556 k passengers in 9 m 2016 +25% in 9 m 2016 vs 9 m 2015 6`571 flights in 9 m 2016 19

NATIONAL POSTAL OPERATOR UKRPOSHTA – GROWTH STORY FOR PARTNERS AND INVESTORS UKRPOSHTA TODAY • 11500 branches with 1. 3 …FACES CHALLENGES • • 28 mln clients out of 44 million population • # 1 company in parcels and letters • $ 1 B of communal payments • $ 4 B of retirement payments • sorting centers country • …PRESENTS GROWTH OPPORTUNITY • from China • • +30% annual growth of e-commerce market Exclusive opportunity to reach over 50% of population with financial services 20 • Over 30 large manual Over +20% growth in parcels $ 12 -15 M in computerization of the network Average of truck fleet over 10 years 3 rd largest employer in the country • computerized mln sq m of real estate • Only 21% of branches are …REQUIRES INVESTMENTS $ 70 -100 M in new car and truck fleet $ 2 -5 M in transport management systems $ 120 -150 M in 5 new sorting centers around the country Looking for strategic partners and investors to become the core of the new Ukrainian economy and transit hub for Asian trade flows

THANK YOU FOR ATTENTION! Detailed information is available on our investment data: www. mtu. gov. ua/inv 21