In November 2016, Dnipro City Council unveiled the new Dnipro Development Agency (DDA) as part of efforts to boost the city’s business climate and facilitate investment. Business Ukraine magazine spoke to DDA Director Volodymyr Panchenko about the goals of the agency and the key investment opportunities in Ukraine’s industrial capital.
Where did the initiative to establish the DDA come from?
The concept behind the DDA first featured in the 2015 election program of Dnipro Mayor Borys Filatov. The idea was to help make the city more open and accessible to the outside world, in order to attract new investment and help create more work places. This job creation is crucial for the development of Dnipro. At present, salary contributions account for 50% of the city budget. The more work places created, the greater the budget will be for a range of ambitious initiatives. Purchasing power will also increase, with a knock-on effect throughout the local economy. The role of the DDA is to support this process and develop strategies for implementation throughout city structures.
What are the core activities of the DDA?
Our two key focuses are facilitating investment and developing the city brand. Our business support activities seek to refine existing development initiatives and bring them into line with international UNIDO standards. We aim to create business plans that meet the expectations of investors and other financing institutions. The end goal is to create an interactive business platform featuring investment opportunities proposed by both the private business sector and by municipal structures.
When we talk about investment, we are careful not to focus exclusively on the interests of international investors at the expense of domestic investors. The truth is that no market will be appealing internationally if it is not able to attract domestic interest. This domestic investment is a core focus for the DDA. We see it as a way to reinvigorate the local economy and build on Dnipro’s traditional strengths as a major regional investment hub. Ideally, local and international investment will support each other. Domestic investment will create an attractive environment for international involvement, while the arrival of landmark investors will also send a powerful signal to Ukrainian business.
Our second key objective is to develop the Dnipro brand. During the Soviet era, Dnipro was a closed city. As a result, it remains off the radar for many foreign businesses. We want to change perceptions. It is no coincidence that the DDA slogan is, “Let’s Open Dnipro to the World!” Tourism can play an important role here – both as a way of promoting a more open and accessible Dnipro brand, and as an important industry that will support the city economy.
Which areas of the Dnipro economy are the top priorities for the DDA?
The city is eyeing a number of major infrastructure projects that offer potentially interesting investment opportunities. Ukraine’s road networks are currently well below European standards, so the development of suitable road connections between Dnipro and the Ukrainian capital are a strategic priority. The city’s air transport infrastructure is also in line for a major overhaul.
We are currently preparing for the launch of an industrial park, with work set to begin in 2018 together with an international management company. This industrial park will feature ecologically clean businesses to minimize the impact on the environment. Work is also underway to develop a science and technology park including university campus facilities. The goal is to combine the strength of Dnipro’s traditionally impressive higher education sphere with the city’s space industry and growing IT sector.
Smaller scale private sector businesses also present opportunities for ambitious investors. Dnipro has traditionally been a major machine-building center. We are currently working with representatives of this sector to help facilitate entry into new international markets.
What services can the DDA provide to potential investors?
We offer a full service package including everything from initial contacts to support on issues such as land allocation and communications. We also aim to minimize unnecessary bureaucracy. The process should be as efficient as possible, which is why the launch of the city’s interactive investment map is so important. This resource will make a range of information available to investors while also providing access to services.
What were the primary areas of interest among potential investors during the recent DDA delegation visit to London?
Our delegation, led by Mayor Filatov, discussed a major waste processing plant project with a potential British partner. We also met with several investment funds. As expected, investors are only interested in projects offering a clear payback strategy. Unfortunately, many major Ukrainian proposals previously failed to offer a viable business model. Instead, they relied on government guarantees. By providing a clear route to payback, we were able to generate considerable interest.
What investment attraction targets does the DDA have?
The target set by the Mayor is to attract USD five billion in investment and create 100,000 work places over the next 10 years. Current DDA projects, primarily in the infrastructure sector, envisage around USD 1.8 billion in investment. We anticipate that these projects will help spur further investment in the private business sector and in the residential and retail construction industries.
How does the DDA intend to promote the Dnipro brand internationally?
Dnipro needs to shed outdated Soviet stereotypes and become more open to the outside world. We see international perceptions as playing a crucial part in this broader rebranding process. The ultimate objective is to position Dnipro as a comfortable and profitable place to do business, regardless of whether you are a major institutional investor or an individual entrepreneur. We also want to project the image of a welcoming city with something to offer visitors from all over the world.