96939




                              PUBLIC-PRIVATE PARTNERSHIPS BRIEFS
                                   Ukraine: Odessa Port




Overview
The Government of Ukraine has awarded HPC Ukraina a contract to expand the capacity of
the Container Terminal Odessa (CTO), located at the state-owned Odessa Sea Commercial
Port (OSCP), the largest seaport in Ukraine and one of the largest on the Black Sea. The
total container capacity of all Ukrainian ports is 2,250,000 TEUs; the CTO extension will add
another 700,000 TEUs, significantly raising the international transport capacity of the coun-
try. The project will help to reduce the cost of transportation by servicing larger vessels
that have lower unit costs, therefore benefitting shippers, shipping lines, and consumers. It
will also strengthen the country’s port sector by increasing competition in the market and
encouraging other terminal operators to improve efficiency and service standards. IFC is
supporting Hamburger Hafen und Logistik Aktiengesellschaft (HHLA), a leading European
port company, with a financing package for HPC Ukraina.



    This series showcases how the World Bank Group supports the development
    and implementation of public-private partnerships. This support comes in the
    form of public sector loans, private sector finance, sector and transaction advice,
    guarantees, and output-based aid.




                                                       PUBLIC-PRIVATE PARTNERSHIPS - APRIL 2015
Background                                                                                         that is in the process of bouncing back from a major
                                                                                                   economic downturn.
The CTO expansion is one of the largest public-
private partnerships in Ukraine. The Government
                                                                                                   Outcomes
of Ukraine approved the project in 2009, and
OSCP Administration and HPC Ukraina signed                                                         Ukraine’s competitiveness and international trade
an investment memorandum for construction of a                                                     outlook will increase by adding capacity to CTO.
deep-water container terminal in September 2010.                                                   HPC Ukraina will help reduce the cost of trans-
Construction began after that and had reached                                                      portation by serving larger vessels with lower unit
nearly 65 percent completion by 2014. Both the                                                     costs, benefitting shippers, shipping lines, and
Government and HPC Ukraina expect the port                                                         consumers. It will also strengthen the country’s port
terminal’s new capacities to be in demand; however,                                                sector by increasing competition in the market and
demand has recently suffered due to conflict in the                                                encouraging other terminal operators to improve
region.                                                                                            the efficiency and service standards of their own
                                                                                                   terminal facilities. The port’s success will also
Project Description                                                                                have a demonstration effect, encouraging private
                                                                                                   infrastructure investments in Ukraine.
HPC Ukraina is 100 percent owned by HPC
Hamburg Port Consulting, which is a fully owned
subsidiary of HHLA. The project is to expand
the CTO through construction and operation of
additional berths at Quarantine Mole (QM), adjacent
to the existing CTO. The new CTO will have a
capacity of 850,000 TEUs upon completion of Phase
1 and 1,250,000 TEUs following completion of
Phase 2. The current capacity is 550,000 TEUs. HPC
Ukraina’s portion of the expansion project includes
land reclamation, construction of the access dam and
pavement of the quay and access ways, and purchase
and installation of container handling and related
equipment.
In addition, the company will replace equipment and
conduct maintenance civil work at CTO. The total
project cost is around $119 million.

World Bank Group Role
The IFC investment comprises an IFC A Loan of
$32 million, for IFC’s own account. IFC provided
long-term financing at a tenor that is unavailable
in the commercial market. IFC is also supporting
a global player in the port sector to implement its
capital expenditure plan in a relatively difficult market



Photo Credits
Front: Maria Savenko/Creative Commons license, creativecommons.org/licenses/by-nc-nd/2.0/ - Back: Oleksandr Valiushko/Creative Commons license, creativecommons.org/licenses/by-nc-sa/2.0/




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