Lviv Economic

Development

12.06.2014

Strategic Location in Eastern

Europe

Ukraine’s Leading Regional Center

Pan-European Transport Corridors

(TEN-T III/ V)

Between West and East (60 km to border with Poland), located on:

Pan-European Transport Corridor III: Germany-Poland-Ukraine (LVIV)-Russia (below),

Pan-European Transport Corridor V: Italy-Austria-Hungary-Ukraine (LVIV)-Russia

Lines/ dots in yellow

stand for Roads/ border crossings as projects in pipeline for the near future

M06 Kyiv-Chop highway

7 Border-Crossing Points

Well-developed border-crossing infrastructure

Major Infrastructure Investments

Road:

– Toll-road Project Lviv – Krakivets 80 km to ling Kyiv-Chop

M06 Highway with A4 Dresden-Kyiv

Rail:

– Eurorail Project: European gauge 1435 mm rail link to

Polish/ Ukrainian Border

Air:

– Common Aviation Agreement in June 2014

– Increase number of low-cost flights

A Story of Growth: FDI

2nd in Ukraine by FDI volume

Most investment attractive region in

Ukraine

Cyprus, Poland, Austria, Germany, Denmark,

Sweden, US

Food, Financial services, Retail, Textile,

Machine Building, electronics, IT etc

Nestle, Carlsberg, Hartwall Group, CVG,

Austrian Airlines, Metro, Energie AG (AVE)

245.7

307.2

561.2597.4

762.5

837.1873.1

1114.3

1113.4

2005 2006 2007 2008 2009 2010 2011 2012 2013

Key conventional

sectors of Lviv

economy

Key clusters include IT/ BPO and

Tourism

Supporting clusters include Food,

Paper/ Print, Textile and

Radioelectronics

Average salaries

Low-skilled 120-200 euro

Engineers – 500 euro

Management – 1000+

Top management – 3000+

IT/ advanced SW developers

3000+

32%

22%

6%5%

5%

30%

Food Industry

Machine Building

Chemical Industry

Metallurgy Industry

Light Industry

Energy, Gas, Water

Lviv rated…

CCC+ Positive

Upgraded in February 2013

uaBB (National scale)

+++

Little direct debt

Largest commercial center in

western Ukraine

---

Dependence on state

centralized budget distribution

system

Insufficient liquidity

Top 10 European Cities

of the Future 2012/13

– FDI Strategy

– Economic Efficiency

Competitive Advantage - HR

38 universities, institutes

and academies

Over 130 000 students

28 000 highly educated

graduates every year

Most students speak

foreign languages

(mainly English and

German)

Over 130,000 students an Asset

0

20 000

40 000

60 000

80 000

100 000

120 000

140 000

1%

1%

1%2%

3%3%

8%

22%

31%

127,669

4%4%

7%

8%

4%

Other

State governance

Architecture

Military sciences and security

Transportation

Education

Agriculture, forestry and fishing

Natural sciences

Mathematics and information studies

Culture and art

Law

Humanities

Medicine

Engineering

Economics, commercial activity

Social sciences

Number of Students of Higher Education in Lviv by Specialties

english

polishczech

bulgarian

slovakrussian

germany

0 10 20 30 40 50 60 70 80 90

ян

в

Annual Number graduating student for BPO sphere by Specialities(just example)

University Graduates

Field of study Major Qualification

Cybernetics and Systems

Science

Social Informatics

Computer Science and

Engineering

Information Management Systems Software Engineer

Information Technology Design Master of Automation and Computer Integrated Technologies

System design Master of Software Engineering

Artificial Intelligence Systems Master of Software Systems

Computer Systems and Networks

Programming Systems

Specialized Computer Systems

Automated Systems Software

Software Engineering

Automation and ControlComputer-based Control and Automation Systems Engineer with automated production control

Automated Process Control Electrical Engineer

Electronics

Micro- and Nanoelectronic Technologies and Equipment Electromechanical engineer

Electronic Devices and Equipment Engineer

Microelectronics Information Systems Master of Electrical Engineering

Physical and Biomedical Electronics Mechanical Engineers

580 graduates with master degrees and diploma specialists

at the National University “Lviv Polytechnic” and over 500 graduates

from technical colleges

Wage levels

Position

Average Salary in

Lviv/US$ per month (before

tax)

Workers 170-270

Plumbers, mechanics 300-370, up to 600

Unit accountants 500-700

Mid-level managers 550-740

Top-level managers 1050-1450

Our Offer

Attractive investment climate

Economic efficiency

Untapped market potential

Unique logistical solutions

Greenfield and Brownfield sites

Industrial park

Strategic partnerships

Trade with Lviv based manufacturers

Full support and friendly attitude

Current Investments

Shopping CentersForum Lviv - 60,000 sqmDeveloper – Multi Development, part of Blackstone Group End of 2015

Leopolis - 80,000 sqmDeveloper – YeditepeEnd of 2015

Office Centers, multifunctional sports arena, industrial (Fujikura etc)

Sites for Hotel Development

Dobrobut Site – 1,5

hectares

Future Hotel Land

Plot

Market Square

Magnus

Shopping

Center

Opera House

SvobodyAvenue –

Lviv’s main street

Possible development for 5-star 1000+ rooms hotel + conference/ convention facilities

Mitskevych Square Site – 0,5 hectare

7 sport types/ 98 Events

13 competition venues

Olympic village with4,500 beds

Media village with10,000 beds

International Broadcasting Center40,000m²

4,700 of sportsmen and official bodies

Out of more than 80 countries

10,000 media representatives

20,000 volunteers

19,000 persons of security staff

1.6 mln. of tickets

Over 3 bln. of TV audience

Venues Participants

Winter Olympic Games 2022

Visitors

Lviv Exhibition Centre

(International Broadcasting Centre during

Winter Olympic Games 2022 )

Number of seats 40,000 m²

Sea level elevation 335 m²

Construction cost EUR 185 mln.

Construction duration 2014-2017

•City Center

•New Ryashivska St. due by 2012

5 km

• Lviv International Airport

•Airport Cargo Terminal 0 km

•Major Rail Cargo Terminal5 km

•Catchment area (50k inhabitants)1 km

•15 municipal bus and 1 trolley bus routes

Public Transport

1

Next to the new Airport passenger terminal and its parking facilities.

Business Park Project (I)

•Options 10, 20, 30 ha

•GLA possible from 10k m2Land

• Lviv City Council and other authorities

•Total anchor tenancy at least 5k m2

• IT/BPO companies to move from existing locations

Tenants

• In 3 to 5 years with over 50% ROIExit

Business Park Project

•City Center

•A4 highway along the site

8 KM

• Lviv International Airport

•Airport Cargo Terminal 11 km

• Major Rail Cargo Terminal4.5 km

• Catchment area (50k inhabitants)2 km

• 10 intercity and municipal bus routes

Public Transport

25 hectares in industrial zone, expansion

possible

Industrial Park Project (I)

Site Location and Layout

Networks and Connection Points

water

Sewage

Electricity Natural Gas

Industrial Park Project (II)

Water

• D = 500

• €0.45/m3

Electricity

• €0.076/ kWh

Gas

• D=89

• €0.374/m3

…everyone else works with us EBRD

World Bank

GTZ

IFC

KfW

NEFCO

USAID

European

Commission

UNESCO

CRDF

Monitor Group

Infrastructure

Purchase of used rolling stock

Construction and rehabilitation

Supply of equipment, new

technologies

Cogeneration

Repair and renovation

Construction of bicycle lanes

Heat Insulation

Waste treatment technologies

and equipment

• EBRD-funded Projects:

• Lviv Public Transport

Modernization – 38 mln euro

• Sykhiv Tramline Extention –

15 mln euro

• District Heating Modernization

– 30 mln euro

• Sludge Treatment – 22 mln

euro

• German government (KfW, GIZ):

• Historical Heritage

Rehabilitation

• Bicycle Infrastructure

• Energy Efficiency

• The World Bank and IFC:

• Water Supply

• Waste Management

• Energy Efficiency

European Commission

Parking projects

Potential off-street parking sites

1. Mitsckevicha sq.2. Osmomysla sq. (Dobrobut market)3. Danyla Halyts’koho sq. (Puppet theatre)4. Vynnychenka str. (Regional administration)5. Universytets’ka str. (Franko university)

Waste management system

Shut down old landfill at least 30 mln euro

New waste treatment facility at least 40 mln euro

New landfill

Project Plan:

- Project location (landplot) secured – 2013

- IFC to structure transaction – 2014

- Startup of operations – 2015

Brownfields

№ Object Enterprise activity Total area

1. OJSC Financial-Leasing Company «Electron-

Leasing»

leasing services 6 100 sq. m

2. Concern “ELECTRON” tool-making facilities and plastic production

6 000 -sq. m

3. Ukrainian-Swiss Joint Stock Company “VESNA”

clothes production 300 sq. m

4. OJSC “KONVEYER” Producing of lifting transport equipment)

14 000 sq.m

5. OJSC “SVEMON-ZAHID” architectural and engineering design

806 sq.m

6. Ltd “COMPANY DNISTER ” metal waste, ferrous and nonferrous

metals treatment

1 700 sq. m -

7. JSC “MAYAK” textile production, production of garments, fur

4 000 sq. m

8. JSC “Lviv plant of milling machines”

Production of metal-and wood treatment

machines

20 500 sq. m

Lviv Meetings Industry (MICE) – Convention

Bureau

Eastern Europe countries enjoy biggest growth rate at 11.3%

CAGRTable 3.6: Number of Meetings per Region (ICCA Report year 2010 and year 1999-2008)

No Events

2000

No Events

2010

10 years

Growth % CAGR %

Asia & Middle East 734 1731 136% 10.0%

North America 754 995 32% 3.1%

Latin America 379 913 141% 10.3%

Australia 226 271 20% 2.0%

Africa 129 283 119% 9.1%

West Europe 2602 4196 61% 5.5%

Eastern Europe 277 725 162% 11.3%

N

Mean

Score

Std.

Deviatio

n

Prague 59 1,88 1,052

Lviv 59 2,76 1,406

Budapest 59 2,88 1,219

Warsaw 59 3,19 1,266

Belgrade 59 4,29 ,966

•The study proved Lviv’s potential to become an attractive MICE destination

•QuantumLeap, Austrian-based company identified to advise on MICE in Lviv

•Convention Bureau establishment among top priorities

Your Contact Person

Serhiy Kiral

Chief Investment Officer (CIO)

+380 50 3130221

serhiy.kiral@city-adm.lviv.ua

www.investinlviv.com