#1MINISTRY OF FINANCE OF UKRAINE Ukraine: Investor Presentation February 2022#2Disclaimer IMPORTANT: You must read the following before continuing. In accessing this document ("Information"), you agree to be bound by the following terms and conditions. The Information is not an offer or invitation to, or solicitation of, any such distribution, placement, sale, purchase or other transfer of any securities in the territory of Ukraine. The Information does not constitute or form part of, and should not be construed as an offer or the solicitation of an offer to subscribe for or purchase any securities, and nothing contained therein shall form the basis of or be relied on in connection with any contract or commitment whatsoever, nor does it constitute a recommendation regarding any securities. The Information contains forward-looking statements. All statements other than statements of historical fact included in the Information are forward-looking statements. Forward-looking statements give Ukraine's current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance and business. These statements may include, without limitation, any statements preceded by, followed by or including words such as "target," "believe," "expect," "aim," "intend," "may," "anticipate," "estimate," "plan," "project," "will," "can have," "likely," "should," "would," "could" and other words and terms of similar meaning or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond control of the Ministry of Finance of Ukraine that could cause actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by such forward-looking statements. 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February 2022 2#3Ukraine's economy: dynamics of selected indicators 2015 2019 Real GDP growth (9.8)% 3.2% $ Consumer 43.3% 4.1% inflation (eop) น % Reserves (eop) Primary state budget balance1 State debt to GDP US$ 13.3bn (eop) US$ 25.3bn (eop) 2.0% of GDP 1.0% of GDP 67.1% 44.3% Note 1 Primary state budget balance defined as state budget revenues minus expenditures excl. debt service and minus net lending Note 2 Estimated based on primary state budget deficit of UAH 43.1bn during Q4 2020 - Q3 2021 and actual nominal GDP of UAH 4,978bn during Q4 2020 - Q3 2021 Note 3 Estimated based on actual state debt of UAH 2,169bn as of Sep 30, 2021 and actual nominal GDP of UAH 4,978bn during Q4 2020 - Q3 2021 Sources State Statistics Service of Ukraine, NBU, State Treasury February 2022 Today 2.7% (Q3 2021) 10.0% (Dec 2021) US$ 30.9bn (Jan 1, 2022) (0.9)% of GDP2 (Q3 2021) 43.6%³ (Q3 2021) 3#4Extensive governmental response to tackle Covid-19 impact Economy Stimulus Program Covid-19 funds use in 2021 9!010 m SMEs support: Expansion of Affordable Loans "5-7-9%" program to help SMEs affected by the lockdown (UAH 83.5bn were issued since the start in February 2020) Provision of portfolio state guarantees for loans and partial compensation of loan principal. As of January 1, 2022, banks issued UAH 8.2bn of loans under portfolio state guarantees Moratorium on tax penalties, tax exemption and relief from tax debt during lockdown¹ One-off stimulating payments of c. US$ 300 per private entrepreneur in December 2020 and during 1H 2021 Population support: Expansion of "Affordable Mortgage at 7%” program to help low-income families (UAH 1.3bn of mortgages were issued in total as of January 2022) Unemployment and partial unemployment benefits, which includes raising the minimum support payment and providing immediate support to persons, who had just registered as unemployed One-off pension increase to low-income pensioners and monthly pension top-up for retirees aged 80+ years ♫ Transformation of the economy: Investments attraction: involvement of IFIs for the implementation of investment projects Innovation enhancement: digital transformation strategy, R&D stimulation, reform of scientific setup Infrastructure investments: reconstruction of roads, modernization of educational and medical institutions, reconstruction of cultural heritage sites Transportation sector reform: spin-off of Ukrzaliznytsia, reorganization of Seaport Authority, heavy investments into transportation infrastructure Sources CMU, Ministry of Finance, Parliament of Ukraine February 2022 UAHbn % of total Healthcare services procurement Vaccines procurement Social support of population Unemployment-related payments Total funds 25.0 56% 11.4 26% 3.5 8% 4.7 11% 44.7 100% Vaccine Vaccines procurement and rollout Administered Available Received (30.01.2022) 2022-23 (30.01.2022) 1st dose 2nd dose Pfizer 50.0m 23.2m 6.7m 6.7m Sinovac 6.5m 10.4m 4.9m 4.7m Moderna 0.0m 5.1m 1.5m 1.4m AstraZeneca 0.0m 5.3m 2.1m 1.9m Covax³ 10.0m n/a n/a n/a Total 66.5m 44.0m 15.3m 14.6m Note 1 Effective during April-May 2020, January 2021 and April 2021 Note 2 Disbursement of funds compared to budget plan Note 3 10m vaccines under Covax program, while specific vaccines are not identified 4#5February 2022 1 Solid foundation for long-term economic growth 2 Return to gradual fiscal consolidation 3 Prudent debt management strategy 4 5 Reviving business climate and development prospects Strong focus on ESG considerations 5#6Accumulated economic buffer to curb Covid-19 crisis (1/2) 2020 GDP in current prices US$ 156bn GDP per capita dynamics, US$ 2017 US$ 2,640 +17% Comments In 2020, Ukraine's real GDP has declined by 4.0% which is significantly lower than projected by the government (-4.8%) and the IMF (-7.2%). In Q3 2021, the real GDP increased by 2.7% which is slightly lower than in Q2 (5.7%) In 2021, the key economic sector outputs fully returned to upward trend. Agriculture demonstrates the best performance (14.4% y-o-y in 2021) due to the record harvest of crops, while construction (5.1% y-o-y in 2021) and industrial production (1.1% y-o-y in 2021) grew at a lower pace Despite Covid-19, the private consumption remained strong in Q3 2021, while the fixed capital accumulation is lagging behind (after a longer contraction during Q1 2020 - Q1 2021) Key economic sectors output growth (y-o-y)1, % US$ 3,097 2018 +18% 40% 2019 US$ 30% 3,663 20% +2% 10% 0% (10%) US$ 3,727 2020 (20%) Jan Agriculture Construction Jan Jan-Mar Jan-Jul Jan-Sep Jan-Nov Jan-Mar Jan-May Jan-May Jan-Jul Jan-Sep Jan-Nov Industrial production Jan Jan-Mar Jan-May Jan-Jul Jan-Sep Jan-Nov Jan Jan-Mar Jan-May Jan-Jul Jan-Sep Jan-Nov Real GDP growth (y-o-y), % 2.4% 2.5% 3.4% 3.2% 5.7% 3.5% 3.6% 3.4% 2.7% miiiii (4.0)% (2.2)% 2016 2017 2018 2019 2020 Q1 '21 Q2 '21 Q3 '21 2021E 2022 2023E Sources State Statistics Service of Ukraine, IMF WEO Oct 2021 (forecast) Component contribution into real GDP growth, p.p. 12.9% 7.4% 6.3% 5.9% 6.1% 14.4% 3.8% 2.8% 2.5% 1.8% 2.3% 2.0% 2.0% 1.7% 5.1% 1.2% -1.1% Private consumption ■Gross fixed capital accumulation (0.9)% (4.3)% 2016 2017 2018 2019 2020 Q1'21 Q2'21 Q3'21 Source State Statistics Service of Ukraine 2018 2019 2020 Source State Statistics Service of Ukraine February 2022 2021 Notes 1 To the corresponding period of the previous year on a cumulative basis 6#7February 2022 Accumulated economic buffer to curb Covid-19 crisis (2/2) Comments The most fast growing components of industrial output in 2021 were furniture and other manufacturing (8.8% growth), engineering (8.0%), and rubber and plastic products manufacturing (7.5%) Gross fixed capital accumulation added 15% y-o-y in Q3 2021, returning on a positive track after 5 quarters of contraction In 9m 2021, the capital investments increased by 9.7% y-o-y which is expected to solidify Ukraine's prospects for economic recovery post Covid-19 outbreak Industry has been the major contributor to capital investments in 9m 2021 accounting for c.37% followed by construction and agriculture with 11% and 10% shares, respectively Capital investments split by sector in 9m 2021, % Gross fixed capital accumulation, % (y-o-y) 18% 24% 27% 21% 18% 20% 13% 15% 18% 13% 10% 14% 11% 4% 17% jlinma 5% 15% 15% II DE (21)% (8)% (23)25)% (27)% Q1'16 Q3 '16 Q1'17 Q3'17 Q1'18 Q3'18 Q1'19 Q3'19 Q1'20 Q3'20 Q1'21 Q3'21 Source State Statistics Service of Ukraine Capital investments dynamics ■Industry UAH bn 326 413 526 584 420 268 332 17% ■Construction 22.1% 18.0% 16.4% 15.5% 37% ■Agriculture 9.7% 9% US$ ■Trade 12.3bn 7% 23 12 ■Transport 19 9% 16 16 10 10% 11% State administration and security Other 13 2016 2018 2017 2019 Capital investments, UAH bn 2020 (38.2%) (35.4%) 9m 2020 9m 2021 Real growth, % Source State Statistics Service of Ukraine Source State Statistics Service of Ukraine BA 7#8February 2022 Despite economic downturn, consumer demand remains firm Comments Real wages growth (%) and avg monthly nominal wages (UAH) Over recent years, consumer demand was consistently driven by a number of factors, including steady rise in real wages, improving consumer sentiments (before Q1 2020), growing personal money remittances 20% 20,000 17,453 18,000 15% 11.9% 16,000 Real wages growth was mainly resilient reflecting post- pandemic recovery and reached 11.9% y-o-y in December 2021, even though the growth pace has slowed (e.g. 19.7% in April 2021) due to rising inflation Strong real and nominal wages growth had a positive impact on the retail trade as well: the turnover increased by 10.7% in 2021 Final private consumption grew by 9.0% and 17.4% y-o-y in Q3 2021 and Q2 2021, respectively, following a 10.0% y-o- y decline in Q2 2020 Private consumption and consumer sentiments evolution Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Source State Statistics Service of Ukraine Retail trade growth (y-o-y)¹, % 10% 5% 0% (5%) (10%) 14,000 12,000 10,000 Real wages index Average monthly nominal wage, UAH 8,000 6,000 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 100 97.5 17.4% 20% 82.4 16% 12.2% 11.7% 12.9% 80 14% 59.4 60.3 62.2 65.1 65.9 69.1 10% 12% 10.6% 60 50.6 9.0% 6.9% 5.3% 2.7% 5.3% 4.4% 10% 8.8% 0% 40 8% (1.8%) (10)% 6% 20 (10.0%) 4% 0 (20)% 2% Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 0% 5.5% 10.3% 13.5% B.1% 8.4% Consumer sentiments index, eop (lhs) Private consumption growth y-o-y, % (rhs) Source GFK, State Statistics Service of Ukraine Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Source State Statistics Service of Ukraine Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Note 1 To the corresponding period of the previous year on a cumulative basis Jun-21 Sep-21 12.2% Dec-21 .10.7% BA 8#9February 2022 Comments Revival of external trade (1/2) Export and import of goods and services dynamics, US$ bn The international trade continued to recover after disruptions caused by global Covid-19 pandemic: Ukraine's goods trade turnover has increased by 37% y-o-y in 12m 2021 (to US$ 133bn) Export Y-o-y change in export, % 25% 79% 59% 12% 42% 38% 31% 35% 18% 27.7 12m 2020 ■ 12m 2021 The total export and import of goods and services have reached US$ 81.5bn and US$ 84.5bn in 12m 2021, respectively 22.2 15.7 18.3 15.6 Exports of goods and services have risen by 34.2% y-o- y in 12m 2021 with ferrous and non-ferrous metals as well as agricultural products being the key drivers of such development Imports of goods and services have increased by 33.9% y-o-y in 12m 2021 driven by the mineral products (on the back of rising energy prices) as well as by machinery Geographic structure of goods trade in 2020 & 20211 8.8 7.9 5.0 3.4 3.8 1.8 2.5 2.33.2 0.70.9 1.11.4 Food and Ferr. and Mineral Machinery Timber Chemicals Industrial Other Services agri non-ferr. products and and wood products metals equipment products goods 12m 2020 12m 2021 16% 15% Source NBU Notes 1 9% 8% US$ 97bn in 3.0 4.2 6.5 7.7 7.9 ■ EU countries 37% 37% Asian countries 14.0 17.4 1.31.5 2.12.6 3.03.7 10.7 11.2 14.4 14.7 12m 2020 Russia 7% 7% US$ 133bn 21.8 in 12m 2021 Other CIS 18% 40% 78% 25% 10% 35% 22% 21% 31% 34% ■ Other 31% Import Source NBU Y-o-y change in import, % BA Sum of export and import of goods 9#10Revival of external trade (2/2) Overall Ukraine concluded 19 FTAs with 46 countries 2001 FTA with Macedonia 2008 Ukraine entered WTO FTA with EFTA 2012 countries FTA with Montenegro 2013 FTA with CIS countries DCFTA with Comments Most of Ukraine's export is attributable to agricultural products (c.44%), ferrous and non-ferrous metals (c.25%) as well as mineral products (c.12%), while machinery and equipment (c.31%), chemicals (c.21%) and mineral products (c.20%) are the main import goods Previously established trade connections and free-trade agreements are supporting double-digit growth of export, even though the export prices deteriorated recently (terms of trade index reached c.99 points in November 2021) As of Jan-Nov 2021, the share of EU in the Ukrainian export structure reached 36.7%, with Poland (USD 4.9bn), Italy (USD 3.1bn), and Germany (USD 2.7bn) being the main trading destinations 11m 2021 y-o-y increase in export of goods by countries² Italy / +181.8% USD 3.1bn Turkey / +170.5% USD 3.6bn USA/+163.5% the EU 2017 FTA with Canada USD 1.4bn FTA with 2020 Israel, United Kingdom India / +118.6% Ukraine's exports and imports breakdown¹ in 12m 2021 Exports Imports 1%2% 4% 5% 4% 5% 11% 6% 6% 21% 44% 2% 12% 25% ■ Agricultural products ■Mineral products Timber and wood products ■Industrial goods Source National Bank of Ukraine 135.0 Czech Rep. / +180.5% USD 1.3bn 120.0 Poland / +164.5% USD 4.9bn 105.0 Germany / +142.4% USD 2.7bn 90.0 Romania / +146.3% USD 1.4bn Notes 1 2 USD 2.0bn Source State Statistics Service of Ukraine Export and import of goods breakdown Only countries, exports of goods to which in 11m 2021 surpassed 2.0% of total Ukraine's export of goods were included February 2022 31% 20% ■ Ferrrous and nonferrous metals Machinery and equipment ■ Chemicals ■ Other (incl. informal trade) Ukraine's Terms of trade index лил Feb-18 May-18 Aug-18 Nov-18 Feb-19 May-19 Aug-19 Nov-19 Source State Statistics Service of Ukraine Feb-20 May-20 Aug-20 Nov-20 Feb-21 May-21 Aug-21 Nov-21 98.6 ERME 10#11• Firm external position leading to less vulnerability to external shocks In 12m 2021, export to EU and Asia increased by US$ 8.3bn (1.6x y-o-y) and US$ 4.7bn (1.3x y-o-y), respectively Net inflow of direct investments in 12m 2021 was US$ 6.0bn versus outflow of US$ 58m in 12m 2020. It is mainly due to US$ 4.2bn of reinvested earnings in 12m 2021 (US$ 488m of earnings withdrawal in 12m 2020) Comments The trade balance deficit amounted to US$ 3.0bn in 2021 (vs US$ 2.4bn in 2020), despite the higher growth in exports (by 34.2% y-o-y) vs imports (by 33.9% y-o-y) The current account (CA) balance demonstrated deficit of US$ 2.1bn in 2021 comparing to US$ 5.3bn surplus a year ago mainly driven by outflows related to investment income (US$ 18.7bn in 2021 vs US$ 8.2bn in 2020) The inflow of capital through financial account increased by US$ 5.8bn and amounted to US$ 2.6bn inflow in 2021 (vs US$ 3.3bn outflow in 2020) Personal money remittances grew at a solid pace (25.4% y-o-y) and amounted to US$ 15.0bn in 2021 Balance of payments components, US$ bn 2.6 (3.5) BOP, 2.8 5.9 2.0 0.5 US$ bn 10.1 9.3 6.1 2017 (6.5) 2018 ■Current account balance (4.1) 2019 5.3 2.6 (2.1) (3.3) 2020 Financial account balance 2021 Private money remittances, US$ bn Ukraine's current and trade balance dynamics, US$ bn 25.4% CA as % of GDP (3.1)% (4.9)% (2.7)% 3.3% 81.5 22.9% 19.9% 53.9 59.2 63.5 60.7 (1.5%) February 2022 15.0 (7.8%) 12.0 11.1 (8.7%) 11.9 9.3 7.3% (8.2%) (62.7) 2017 2018 2019 0.5% 2020 (70.6) (63.1) (76.0) 2021 2017 2018 2019 2020 (84.5) 2021 Personal money remittances, US$ bn Remittances y-o-y change, % Export of goods and services Trade balance (% of GDP) Import of goods and services Source NBU BA 11#12February 2022 Prudent monetary policy implemented by independent regulator Medium-term consumer inflation target range: 5%+/-1% Y-o-y inflation as of December 2021: 10.0% Comments In March 2021, the NBU started the cycle of rate hikes to curb inflation, raising the key policy rates 6 times during Mar 2021 - Jan 2022 by 4.0 p.p. The CB also rolled back its emergency measures to support banking liquidity in Oct 2021 At the latest MPC meeting, the NBU increased the interest rate by 1.0 p.p. to 10.0%. The CB assesses that the inflation peak was realized in September with inflation at 11.0% In December, inflation decelerated to 10.0%. The increase in prices was mainly driven by processed food, non-food products and services due to rising energy prices The NBU has worsened its 2022 inflation forecast, from 5.0% to 7.7%, due to high global energy prices, robust consumer demand, price pressures from trading partners CPI expectations for the following 12 months Consumer price index (CPI) change and key policy rate 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 CPI, y-o-y, % Source National Bank of Ukraine May-20 Jul-20 10.0% 10.0% Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Key policy rate, % NBU's medium-term inflation target range UAH/US$ and UAH/EUR exchange rates dynamics 16% 14% 12% 10% 8% 6% 4% 2% 0% Jan-19 Jul-19 Mar-19 May-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 Banks Businesses Source National Bank of Ukraine Households Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22 38.0 36.0 34.0 10.6% 32.0 30.0 8.7% 28.0 8.0% 26.0 6.3% 24.0 22.0 Financial analysts 1 20.0 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 Jul-20 May-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Notes As of Jan 28, 2022 EUR US$ Jul-21 Sep-21 Nov-21 Jan-22 12 BA 32.31 29.01#13February 2022 Accumulated international reserves Comments Gross international reserves increased by 1.1% (m-o-m) and reached US$ 30.9bn as of Jan 1, 2022 (covering 4.1 months of future imports) Maintained high levels of FX reserves and floating FX rate policy are the most influential factors providing strong buffer for Ukraine on the back of the current downturn FX interventions of the NBU and MoF's debt operations were the main drivers of the change in FX reserves: FX domestic placement and World Bank tranche brought US$ 858m and US$ 105m, respectively, while US$ 848m were used for repayment and service of FX public debt Also, the NBU sold a net of US$ 153m in the interbank FX market and the revaluation of financial instruments resulted in US$ 23m decline in their value Gross international reserves by instrument (Jan 1, 2022) Gross and net international reserves (eop), US$ bn 35 30 25 20 GN NW 10 5 . Months of imports 3.4x 4.0x Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 4.8x Jul-20 Sep-20 Nov-20 Jan-21 4.1x Mar-21 May-21 Jul-21 Sep-21 Nov-21 Gross international reserves by currency (Jan 1, 2022) Source NBU ■ USD 19% 16% ■Securities (rating A) 2% 5% 4% ■ EUR ■Securities (rating AA) 3% 7% ■ GBP 5% US$ 30.9bn Jan 1, 2022 ■Securities (rating AAA) US$ 30.9bn ■ JPY Jan 1, 2022 ■Monetary gold ■ CNY 57% ■Banknotes, current accounts, time deposits 80% ■ Gold ■ Other BA 13#14February 2022 1 Solid foundation for long-term economic growth 2 Return to gradual fiscal consolidation 3 Prudent debt management strategy 4 5 Reviving business climate and development prospects Strong focus on ESG considerations BA 14#152022-2024 Budget Declaration Key indicators of 2022 Budget Law and 2022-2024 Budget Declaration 2020A 2021E/A State debt, as % of GDP 4 On December 2, the Parliament of Ukraine voted for the 2022 Budget Law On May 31, the Government approved the Budget Declaration for 2022 - 2024 for the first time, and on July 15 it was considered by the Parliament of Ukraine The Budget Declaration for 2022- 2024 is the Government's vision of the budget policy for the medium term. The document defines the main budget indicators and the goals of the state policy with the key performance indicators. Nominal GDP, UAHbn Real GDP growth, % CPI (eop), % PPI (eop), % Unemployment rate, % Trade deficit, USDbn (i) Revenues as % of GDP (ii) Expenditures as % of GDP (iii) Net lending as % of GDP Overall state budget deficit as % of GDP Key macroeconomic assumptions Key state budget indicators, UAHbn 2022F 2023F 2024F 4,192 (4.0%) 5,226 1 5,369 5,994 6,651 4.1% 3.8% 4.7% 5.0% 5.0% 10.0%2 6.2% 5.3% 5.0% 2 14.5% 62.2% 7.8% 6.2% 5.7% 9.5% 9.2% 8.5% 8.0% 7.8% (1.8) (6.2) (8.6) (10.6) (12.1) 3 3Y Budget 3Y Budget Actual Actual Law Declaration Declaration 1,076.0 1,296.9 1,323.9 1,333.2 1,451.6 25.7% 24.8% 24.7% 22.2% 21.8% 1,288.1 1,490.3 1,499.5 1,497.0 1,614.1 30.7% 28.5% 27.9% 25.0% 24.3% 5.5 4.5 13.3 16.0 17.1 0.1% 0.1% 0.2% 0.3% 0.3% 217.6 197.9 188.8 179.8 179.6 5.2% 3.8% 3.5% 3.0% 2.7% 53.9% 45.2% 50.8% 48.0% 46.4% 4 State-guaranteed debt, as % of GDP 7.0% 4 5.9% 6.8% 6.6% 6.0% State and state-guaranteed debt, as % of GDP 60.9% 51.1% 57.6% 54.6% 52.4% Source Ministry of Finance of Ukraine, State Treasury Service of Ukraine, National Bank of Ukraine Note 1 Forecast of the Ministry of Economy as of 15.11.2021 Note 2 According to the actual data from the NBU Note 3 Approved by the Parliament in the second reading on December 2, 2021 February 2022 Note 4 Actuals for 2020, based on actual debt and forecasted GDP (by the Ministry of Economy as of 15.11.2021) for 2021, forecasts for 2022-2024 from the presentation of the Budget Law 2022 15#162022 state budget to resume gradual fiscal consolidation FY 2021 (Act.) FY 2022 (Law) Key indicators of 2022 State budget: Total revenues: UAH 1,324bn (+2%) Total expenditures: UAH 1,499bn (+1%) Budget deficit²: 2022 vs 2021 state budget revenues split¹ ■ VAT 2022 vs 2021 state budget expenditures split¹ 2022 state budget revenues: UAH 1,324bn 2022 state budget expenditures: UAH 1,499bn 12% FY 2021 (Act.) FY 2022 ■Social welfare 2% 13% (Law) 2% 22% 15% 14% 23% ■Security and defense ■Debt service 4% Personal income tax UAH 188.8bn / 3.5% of GDP in 2022 (per government's forecast 3% 21% UAH 1,297 bn 41% 5% 4% UAH 1,490 bn ■ Health 22% 44% Corporate income tax of UAH 5,369bn GDP in 2022) UAH 1,324 bn 8% 12% UAH 1,499 bn 20% Other tax revenues 21% 11% 11% 12% 11% 11% 11% 13% Non-tax revenues 12% Economic activity ■ Education Public administration Interbudgetary transfers ■ Other 2022 State Budget Law: general fund financing, UAHbn 11.2 2.5 72.4 321.0 5.6 19.3 14.6 4.4 0.2 USDbn³ 160.3 553.6 420.0 Notes 1 According to State Budget Law 2022 (as of December 2021) and Actual Annual State Budget 125.6 Execution 2021 2 Budget deficit defined as 8.0 revenues minus expenditures and minus net lending 3 Translated at the 2022 budgeted Domestic debt repayment External debt repayment State budget general Gross general fund fund deficit financing needs Domestic debt External debt Privatization proceeds avg 28.6 UAH per 1 USD BA February 2022 16#17February 2022 2021 state budget execution UAH m Jan-Dec 2020 Jan-Dec 2021 % diff. FY 2021 (Plan as of Dec 2021) % execution Revenues 1,076,017 1,296,853 +21% 1,281,143 101% Tax revenues, incl. 851,116 1,107,091 +30% 1,069,790 103% Personal income tax and income charge 117,281 137,555 +17% 137,580 100% Corporate profit tax 108,695 147,752 +36% 145,976 101% Fee for the use of mineral resources 52,476 80,749 +54% 73,237 110% Excises 138,296 162,451 +17% 149,646 109% VAT (net of VAT reimbursement) 400,600 536,489 +34% 524,860 102% Export and Import duties 30,461 38,177 +25% 34,793 110% Other taxes and duties 3,307 3,917 +18% 3,697 106% Non-tax revenues 224,901 189,762 (16%) 211,353 90% Expenditures (1,288,017) (1,490,259) +16% (1,544,156) 97% General public functions, incl.: (163,849) (206,643) +26% (216,150) 96% Debt service (119,719) (155,652) +30% (158,836) 98% Security and Defense (278,047) (301,937) +9% (308,263) 98% Economic activity (168,889) (180,990) +7% (191,485) 95% Protection of environment (6,637) (8,200) +24% (9,372) 87% Municipal utilities and services (89) (164) +85% (365) 45% Healthcare (124,925) (170,505) +36% (175,948) 97% Intellectual and physical development (9,826) (15,970) +63% (17,897) 89% Education (52,857) (63,837) +21% (70,428) 91% Social welfare (322,720) (339,279) +5% (341,038) 99% Interbudgetary transfers (160,177) (202,733) +27% (213,210) 95% Net lending (5,096) (4,531) (11%) (10,118) 45% Primary state budget balance (97,377) (42,286) (57%) (114,295) +37% Overall state budget balance (217,096) (197,937) (9%) (273,131) 72% BA 17#18February 2022 UAH m Jan-Dec 2020 2021 consolidated budget execution Jan-Dec 2021 % diff. FY 2021 (P) % diff. Revenues Tax revenues Personal income tax and income charge Corporate profit tax Fee for the use of mineral resources Excises VAT (net of VAT reimbursement) Property taxes Export and Import duties Other taxes and duties 1,376,662 1,662,243 +21% 1,632,261 +2% 1,136,687 1,453,804 +28% 1,401,890 +4% 295,107 349,785 +19% 343,482 +2% 118,472 163,844 +38% 160,264 +2% 57,113 89,319 +56% 79,672 +12% 153,850 180,300 +17% 166,404 +8% 400,600 536,489 +34% 524,860 +2% 37,433 43,243 +16% 42,162 +3% 30,461 38,177 +25% 34,793 +10% 43,651 52,646 +21% 50,252 +5% Non-tax revenues 239,974 208,439 (13%) 230,371 (10%) Expenditures (1,595,290) (1,844,378) +16% (1,938,144) (5%) General public functions, incl.: (204,819) (252,606) +23% (264,655) (5%) Debt service (121,239) (157,592) +30% (160,909) (2%) Security and Defense (279,880) (303,677) +9% (310,128) (2%) Economic activity (262,815) (293,350) +12% (327,871) (11%) Protection of environment (9,057) (10,621) +17% (12,804) (17%) Municipal utilities and services (32,214) (56,895) +77% (63,354) (10%) Healthcare (175,791) (203,610) +16% (210,885) (3%) Intellectual and physical development (31,711) (43,358) +37% (46,852) (7%) Education (252,283) (312,915) +24% (331,329) (6%) Social welfare (346,720) (367,347) +6% (370,266) (1%) Net lending (5,316) (4,773) (10%) (10,448) (54%) Primary consolidated budget balance (102,705) (29,317) (71%) (155,421) (81%) Overall consolidated budget balance (223,944) (186,908) (17%) (316,330) (41%) BA 18#19February 2022 1 Solid foundation for long-term economic growth 2 Return to gradual fiscal consolidation 3 Prudent debt management strategy 4 5 Reviving business climate and development prospects Strong focus on ESG considerations BA 19#20As of end-2021, Ukraine's total state and state-guaranteed debt (US$ 97.9bn / UAH 2,672bn) split between: 58% of external debt, 42% of domestic debt 88% of state debt, 12% of state- guaranteed debt Prudent and proactive debt management strategy State and state-guaranteed debt structure (end-2021) (In US$ bn) State debt State and state-guaranteed debt by currency, US$ bn Total (% of GDP) State-guaranteed debt 79.1% 80.9% 71.8% 60.9% 50.2% 60.8% 51.1% Domestic in FX 5% Eurobonds 13% 65.5 71.0 76.3 78.3 84.4 90.3 97.9 IFIs Domestic 4.3 25% Domestic debt 5% 1.5 0.6 6% 6% 8% 9% 10% 14% 13% in UAH 21.4 19% 18% 18% 17% 13% 40% Bank 14% 15% 34.6 US$ 86.6bn Other 3.4 external loans US$ 2.3 20% 39% 44% 45% 43% 44% 36% 34% 11.3bn debt 4% 6.9 22.9 IFIs 61% Eurobonds 26% 30% 30% 30% 37% 29% 35% 37% 2015 2016 2017 2018 2019 2020 2021 UAH USD XDR EUR CAD JPY 2.5 1.9 State debt amortization schedule (01.01.2022)1, US$ bn State debt dynamics, US$ bn Total debt service 86.6 79.9 80.1 19.2 12.6 11.6 8.9 8.0 6.4 67.1% 69.2% 74.4 61.5% 67.2 65.3 53.9% 60.7 52.3% 55.6 26.8 27.5 24.7 44.3% 35.0 35.4 51.4% 39.0 45.2% 36.7 21.2 3.6 11.3 5.8 1.8 3.9 44.5 4.4 4.8 1.6 1.4 2.7 34.4 36.0 38.5 39.7 39.3 43.4 47.7 2.3 2.2 10 3.5 2.4 Notes 1.9 1.4 1 Incl. outstanding debt 2022E 2023E 2024E 2025E 2026E 2027E 2015 2016 2017 2018 2019 2020 Q2 2021 2021 obligations only 2 Ministry of Economy GDP Interest Domestic debt ■Interest - External debt - Principal Domestic debt Principal - External debt State external debt State domestic debt as % of GDP2 estimate for 2021 as of 15.11.2021 in amount of UAH 5,225.5bn February 2022 Source Ministry of Finance 20 20#21Switching focus to UAH-denominated issuances on domestic market UAH-denominated issuances grew at 72% CAGR over 2017-2021 • After a major 3.5x 2019 y-o-y volume Domestic government bonds placements by currency Funds remitted to State Budget UAHM UAH-denominated issuances 287,896 227,552 258,829 18% 65,128 55% 30% 72% 6,922 93% 46% 36% 2018 2019 2020 2021 YTD'221 US$-denominated issuances Year 2021 kept the positive growth tendency with an increase, 2020 saw further growth of 14% y-o-y in UAH- US$m denominated securities 3,478 4,331 3,857 3,096 46% 19% 33% 70% 67% 54% 81% 30% 2018 2019 2020 2021 148 increase of 11% y-o- YTD'221 EUR-denominated issuances y for UAH- EURM 845 783 denominated 503 9% 387 30% issuances 56% 91% 70% 96% 44% 2018 In line with MTDS objectives, FX- denominated issuances are kept relatively stable Share of UAH-denominated debt in total state debt 2019 ■up to 1 year 2020 2021 YTD'221 1-3 years ■3-5 years ■over 5 years February 2022 33.4% 41.0% 38.2% 40.0% Dec 31, 2018 Dec 31, 2019 Dec 31, 2020 Dec 31, 2021 Source Ministry of Finance Note 1 As of February 1, 2022 BA 21#22Steady increase in secondary trading In 2021, the market continued to grow and reached UAH Secondary trading volume of domestic government bonds (stock market and OTC) May 27, 2019 Stock market OTC 75 Launch of Clearstream link 61 11 507bn which is +32% y-o-y 42 Further uptick in 9 secondary trading 23 20 volumes is exhibited 2022 1 20 22 23 23 23 20 2 4 33 20 24 24 27 25 21 20 5 4 8 2 33 3 13 6 11 21 17 20 20 20 120 16 18 20 19 15 Ukrainian February 2025 bonds will be eligible for the JP Morgan GBI-EM index starting from March 31, 2022 February 2022 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Outstanding benchmark bonds² Oct-19 Nov-19 Dec-19 Jan-20 N Feb-20 Mar-20 Apr-20 May-20 Jun-20 10 25 25 50 2 29 80 23 21 26 26 28 30 15 6 7 3 70 20 21 23 14 17 Jul-20 N Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 65 32 51 14 50 43 42 38 14 36 11 13 21 23 12 11 20 23 3 7 43 43 45 36 37 3 7 17 11 11 43 6 38 32 28 62 52 45 26 25 13 29 29 30 33 33 33 0.6 0.6 0.5 0.5 0.7 0.7 0.4 0.7 1.4 0.4 0.5 Feb-22 N N 17.8 18.0 15.5 15.0 19.0 21.0 11.0 19.0 41.1 11.1 15.3 Notes 1 Data represents the Mar-22 May-22 Aug-22 Oct-22 May-23 Aug-23 Nov-23 May-24 Feb-25 May-26 May-27 combination of stock market and OTC BA 2 As of February 1, 2022 Source Ministry of Finance 22 22 2#23Ukraine's domestic government bond holders On August 28, 2020, the NBU has eliminated obstacles for foreign investors to enter the Ukrainian securities market through establishment of the direct access to the purchase and sale of government bonds with the help of a "nominee holder" Ukrainian banks that have accounts with the NBU depository can open depot accounts for its foreign clients for the purpose of buying and selling Ukrainian government bonds Key highlights With a c.53% share, banks are currently the largest holder of domestic government bonds followed by the NBU, which accounts for c.29% of the portfolio² At c.8% of total outstanding Ukrainian domestic government bonds as of February 20222, the portfolio held by non- residents has returned on its upward trajectory in H1 2021 (after Mar-Nov 2020 decline in line with the EM's capital outflow), while the dynamics was mainly negative in H2 2021 Ukraine is making consistent steps to deepen domestic government bond market and to increase share of non- residents in local currency bonds portfolio A link between Clearstream, the international central securities depository, and the depository of the NBU active since May 2019 ensuring streamlined access to Ukraine's domestic government bond market Domestic government bonds held by non-residents (eop) Domestic government bond holders¹ April 20191 4%1% 43% 5% Banks NBU February 2022² 2% 8% 8% 47% Non-residents 53% 29% Companies Individuals Nominal and real weighted avg yields at primary auctions, % 1.4 3.0 4.1 5.0 4.2 3.4 2.8 3.4 3.5 4.0 3.5 2.8 18.6% 16.7% In US$bn 25.7% 15.1% 21.2% 21.8% 11.2% 11.3% 11.1% 11.7% 12.1% 12.1% 16.7% 15.3% 12.4% 13.4% 8.7% 9.6% 4.9% 16.8% 10.6% 10.6% 10.0% 14.0% 13.9% 14.3% 8.9% 9.4% 9.7% 15.9% 10.8% 9.0% 14.0% 9.6% 8.1% 10.9% 7.7% 8.9% 7.2% 7.1% 8.2% 6.3% 6.1% 6.7% 6.6% 5.7% 5.9% 6.5% 6.2% 6.3% 5.2% 5.1% 5.4% 6.4% 4.3% 4.1% 2.1% 2.3% 4.8% 4.5% 38 20 Held by non-residents, UAHbn % of total portfolio (excl. NBU) Source Ministry of Finance, NBU Notes 1 As of April 26, 2019 2 As of February 1, 2022 3 According to NBU's survey about inflation expectations of financial analysts for the next 12 months Apr 19 Jul 19 Oct 19 Jan Apr 20 Jul 20 Oct 20 Jan Apr 21 Jul 21 Oct 21 Jan 21 76 102 125 112 93 79 95 97 107 93 81 Apr Jul Oct Jan Jul Apr 22 19 19 19 20 32. Oct Jan Jul Apr Oct Jan 20 20 20 21 21 21 21 22 % of total portfolio Nominal weighted avg yield, % Real weighted avg yield, % 3 CPI expectations for next 12 months (y-o-y), % Source Ministry of Finance of Ukraine, NBU February 2022 BA 23 23#24Pipeline of official concessional external financing Combined with a proactive response to Covid-19 economic fallout, Ukraine managed to secure a range of concessional financing from its international partners to cover significant portion Partner Programs International Monetary Fund of external financing needs of the general fund of Bilateral creditors the state budget for 2020-2022 On November 24th 2021, IMF has disbursed the second tranche to Ukraine in amount US$ 0.7bn (SDR 0.5bn) under Stand-By Arrangement. Following the first review of the Program in November 2021, the SBA was extended to June 2022 On June 9th 2020, IMF Executive Board approved 18-month Stand-By Arrangement (SBA) for Ukraine, under which US$ 2.1bn (SDR 1.5bn) was disbursed immediately. The total amount of program is US$ 5.1bn (SDR 3.6bn) that will be directed to support BoP and budget to help address the effects of Covid-19 while moving forward important structural reforms. As of now, the total amount received under the program is US$ 2.8bn (SDR 2.0bn) On August 25th 2021, Ukraine has received US$ 2.7bn (SDR 1.9bn) under SDR allocation program, part of IMF's assistance to member countries in economic recovery from the Covid-19 In January 2022, Canada has approved USD 100m loan to Ukraine In 2022, Ukraine expects EUR 150m within the Untied Financial Loan provided by Germany to combat COVID-19 impact. The proceeds will be directed to support "Affordable Loans 5-7-9" On January 24th, 2022, European Commission announced a new MFA package of EUR 1.2bn plus EUR 120m of bilateral assistance to address the financing needs due to tense geopolitical and economical situation. Since 2014, the EU has approved EUR 5.0bn in MFA support for Ukraine, o/w EUR 3.3bn were disbursed during 2014-2018, EUR 1.1bn in 2020, EUR 600m in 2021 Pipeline financing c.US$ 2.2bn¹ c.US$ 1.7bn Notes 1 Translated from SDR World Bank On September 15th 2021, two projects were signed: US$ 200m Improving Higher Education for Results; US$ 212m Improving Power System Resilience for European Power Grid Integration Following delivery of reforms in social, healthcare and education spheres Ukraine plans to attract US$ 150m within the WB Performance-Based Financing program in 2022 On Dec 10th 2021, the World Bank agreed financing of US$ 150m for "Additional funding of the Project "Emergency Response to COVID-19 and Vaccination in Ukraine", which was disbursed and added to the existing US$ 90m loan under this project In December 2021, US$ 350m Economic Recovery Development Policy Loan was signed and disbursed The total investment project portfolio in Ukraine amounts to US$ 3.6bn in 15 ongoing projects. US$ 0.6bn to US$ based on 1.3907 US$ per 1 SDR IMF exchange rate as of January 28, 2022 Total amount of envisaged committed external financing from the official partners February 2022 c.US$ 4.5bn ERE 24 24#25Status of cooperation between Ukraine and the IMF New US$ 2.7bn SDR allocation program On August 25, 2021, Ukraine has received more than US$ 2.7bn (SDR 1.9bn) under SDR allocation program as part of IMF's assistance to member countries in economic recovery from the coronavirus crisis. The amount is proportional to Ukraine's existing quota in the Fund (0.0042%) Current 18-month US$ 5.0bn SBA program On May 21, 2020, a Staff Level Agreement on a new 18-month SDR 3.6bn (c. US$ 5.1bn) arrangement under the Stand-By Arrangement (SBA) was agreed. It was further approved by the Executive Board on June 9 It replaced the Staff Level Agreement on a 3-year Extended Fund Facility (EFF) program which was agreed in December 2019 As of today, Ukraine has already received US$ 2.8bn financial support under the program The size and timing of further tranches are subject to the future IMF mission reviews Key priorities under IMF's 2020 SBA program: Mitigating the economic impact of the crisis, including by supporting households and businesses Ensuring continued central bank independence and a flexible exchange rate Safeguarding financial stability while recovering the costs from bank resolutions Moving forward with key governance and anti-corruption measures to preserve and deepen recent gains Sources IMF, Ministry of Finance Note 1 Translated from SDR to US$ based on 1.3907 US$ per 1 SDR IMF exchange rate as of January 28, 2022 February 2022 Past EFF, SBA and SDR programs Availability date / Reviews SDR m US$ m SDR allocation program (US$ 2.7bn) August 25, 2021 [disbursed] 1,928 2,738 Total SDR program 1,928 2,738 SBA 2020 program (US$ 5.0bn, 179% of quota) June 9, 2020 1,500 2,076 November 24, 2021 [1st review] 500 699 Following reviews 1,600 2,2251 Total SBA program 3,600 5,070 SBA 2018 program (US$ 3.9bn, 139% of quota) December 18, 2018 1,000 1,391 Total SBA program 1,000 1,391 EFF 2015 program (US$ 17.5bn, 900% of quota) March 11, 2015 3,546 4,879 July 31, 2015 [1st review] 1,182 1,659 September 15, 2016 [2nd review] 716 1,003 April 3, 2017 [3rd review] 734 996 Total EFF program 6,178 8,537 25#26Structural Benchmarks IMF Structural Benchmarks 1 Approve a 2022 budget targeting a general government deficit of 3.5 percent of GDP 2 Enact legal amendments to reverse the relaxation of eligibility criteria for state representatives to supervisory boards of state-owned banks 3 Completion Date End-November 2021 Adopt time-bound succession plans for the supervisory boards of each of the SOBS, consistent with the approved 2021-2024 strategies for each of the banks End-November 2021 End-November 2021 4 Complete and publish the audit of the of the remaining portion of the funds spent out of the Covid-related spending program NBU will adopt a time-bound action plan, in consultation with IMF staff, to improve professional capacity of bank supervision 5 6 The Prosecutor General's Office to publish a semiannual report on the outcomes of criminal proceedings against former bank owners, managers, and other related parties in each resolved bank since the beginning of 2014, with aggregate data on the number of persons investigated, tried, and convicted as well as the amount of fines and damage recovered End-December 2021 End-December 2021 End-December 2021 7 Cabinet will endorse a roadmap that outlines the steps required to take PrivatBank and Oschadbank to the market for partial or full privatization and advance the objective of attracting reputable international investors 8 Adopt and publish a comprehensive asset recovery strategy paper and action plan 9 Enact amendments to the SAPO law to improve the selection procedures of SAPO officials, strengthen its capacity to regulate its organizational activities, and establish mechanisms for accountability of SAPO Leadership End-January 2022 End-February 2022 End-March 2022 10 Develop and make available to all gas suppliers a consumer database with all the information necessary for a new supplier to bill households End-March 2022 11 Complete the one-off integrity check of existing HCJ members by the Ethics Council in line with provisions in the new HCJ law End-April 2022 12 Appoint a supervisory Board in Energoatom with a majority of independent members selected through a transparent and robust procedure End-May 2022 Source IMF February 2022 26 26#27February 2022 BB BB- B+ B B- CCC+ CCC CCC- CC RD Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 B / Positive credit rating affirmed by Fitch, B / Stable - by S&P Fitch Ratings Rating: B, Positive Last update: Aug 6, 2021, reaffirmed at B, outlook raised to positive Next update: Feb 2022 Key rating drivers of the last review: Track record of multilateral support and a credible macroeconomic policy framework that has underpinned resilience to the coronavirus shock and macroeconomic stability FX reserves consolidation, commitment to inflation-targeting and prudent fiscal policy with noticeable reduction in government debt Expectations for gradual fiscal consolidation and continuation of macroeconomic policies Human development indicators compare favorably with the peer group, a net external creditor position of close to 11% of GDP, and lower general government debt than the 'B' median S&P Global Rating: B, Stable Last update: Sep 10, 2021, reaffirmed at B, outlook stable Next update: Feb 2022 Key rating drivers of the last review: Ukraine's growth, balance of payments, and public finances all outperformed the expectations in 2020 Reserve adequacy has improved, providing a cushion against potential adverse external developments including further delays in the disbursement of concessional loans Stronger macroeconomic management since 2015 and augmented foreign exchange (FX) reserves The ongoing implementation of reforms helps the government access commercial debt markets and receive concessional funding from international financial institutions (IFIs) Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 Sep-21 BB- B+ B B B- CCC+ CCC CCC- CC Mar-08 SD Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 Sep-21 27 B#28February 2022 1 Solid foundation for long-term economic growth 2 Return to gradual fiscal consolidation 3 Prudent debt management strategy 4 5 Reviving business climate and development prospects Strong focus on ESG considerations BA 28#29Business climate improvement to accelerate growth potential Global Innovation Index 2021: Index evolution, comparison with peers and main rating pillars +22 p. 71 63 64 50 50 47 49 43 45 Ukraine's selected pillars in 2021 global ranking Institutions Infrastructure 91 2013 2014 2015 2016 2017 2018 Regional peers Rating peers 2019 2020 118 2021 (+2 p. vs the previous report) 94 (+0p. vs the previous report) 112 94 64 49 48 41 35 34 40 UKR MDL ROM TUR BGR HUN POL GHA NGA EGY Business 53 sophistication 88 (+1 p. vs the previous report) Market sophistication (+11 p. vs the previous report) Business expectations index by the NBU 140% As of Q4 2021, retail and manufacturing have the highest expectations regarding future economic activity, while construction and agriculture sectors have drastically deteriorated expectations 130% 120% 120% 110% 100% 90% 80% Q1' 19 Q2' 19 Total Q3' 19 Source NBU February 2022 Q4' 19 Agriculture 111% 91% 114% 112% >100% positive expectations 100% Q1' 20 Q2' 20 Q3' 20 Q4' 20 Q1'21 Q2' 21 - Construction - Retail Q3' 21 • Manufacturing Q4' 21 ERME 20 29#30Seizing crisis opportunity for agri exports Comments Over the last 5 years, the worldwide consumption of wheat and corn increased by 6.0% and 7.1% respectively, mainly driven by the population growth Ukraine also increased its production and export recently: export of wheat is expected to reach MMT 787 in 2021/22 while the corn should peak at MMT 1,168 reflecting a 22% and 77% increase in export volumes, respectively, compared to 2017/2018 With relatively strong export prices, corn and wheat are key export commodities that have already brought US$ 6.7bn in export inflows (as of Sep 2021) Export of agricultural products itself constitute c. 40% of all exports, with top 5 products share of c. 26% Agri export volumes (US$ bn) and goods breakdown¹ Share in agri export Wheat and corn consumption (world) and Ukraine's export Metric tons 742 1,090 735 1,146 748 1,141 785 1,146 787 1,148 27 18 30 25 29 29 29 25 25 24 33 32 17/18 18/19 19/20 20/21 21/22 ■Wheat export Ukraine Corn export Ukraine Source USDA Ukraine's export prices on selected agri goods (US$/t) 300 Ukraine Corn (yellow) and Wheat (dark blue) FOB Black 23.1% 4.1 3.6 3.1 20.2% 17.6% 5.2% 5.0% Sea Ports 250 200 III.. 150 1800 Ukraine Sunflower Oil Export Price 1400 0.9 0.9 1000 600 Sunflower oil Corn Wheat Barley Animal feed Jul-20 Oct-20 February 2022 Source State Customs Service of Ukraine Note 1: In January - September 2021 Relatively strong and reviving prices for Ukraine's main exports 1,370 Jan-21 Apr-21 Jul-21 Oct-21 Jan-22 Source Bloomberg, as of Jan 28, 2022 323 285 30 30#31Booming IT sector on the back of global digitalization Selected large tech players in Ukraine <epam> Luxoft A DXC Technology Company Capgemini softserve GlobalLogic A Hitachi Group Company eleks GENESIS DataArt G grammarly CIKLUM Comments Driven by the global trend of digitalization, Ukraine is experiencing a significant growth of IT sector: the number of employees in top 50 companies has risen from 31k in January 2016 to 86k in July 2021 The industry demonstrates higher output growth, comparing to the whole economy: average of 6.1% over 2016-2020 vs 1.5% for general economy, leading to increase in the share of the sector in the real GDP from 3.8% to 4.9% Being focused on the international market, the industry is also boosting export inflows: USD 4.9bn in 11m 2021 vs USD 1.8bn in 2016 This led to almost 2x increase of the share in the total export: 6.7% in 2021 vs 3.9% in 2016 IT & telecom sector output vs GDP real change, % Share in real GDP 3.8% 4.0% 3.8% 4.0% 8.4% 4.9% 4.8% Employment in IT companies, thousand people 33.2% 86 76 67 68 63 58 43 46 53 50 31 32 11.0% 11.6 12.7% 6.9% 7.6% 7.7% 4.5% 5.9% 6.6% 2.7% 1.9% Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Source DOU Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Total no. of employees of Top-50 companies Growth (p-o-p), % Export of IT services, USDbn Share in total export 3.9% 4.2% 4.8% 5.7% 7.3% 6.7% 6.5% 6.4% 6.8% intellias 3.5% 5.4% 3.2% AJAX 2.4% 2.4% 2.3% 2.7% evo playrix February 2022 2016 2017 4.9 4.4 3.6 2.9 2.3 1.8 2018 2019 (4.0%) 2020 3Q 2021 Real change in IT & telecom sector output, % Real GDP change, % 2016 2017 2018 2019 2020 11m 2021 BA Source State Customs Service of Ukraine Source National Bank of Ukraine 31#32Key updates (2019-2021) Institutions & Anti-corruption: launch of High Anti-Corruption Court in 2019, full anti-corruption infrastructure in place 879 governance Decentralization: liquidation of inefficient administrative units (April 2020) 136 Transparency: resolution on open datasets (April 2021) 1000+ Digitalization Telecom: Simplifying licensing procedures for the telecom companies (January 2021) 14.5m Strategy: The strategy of digital transformation of Ukraine to 2024 (February 2021) 94 IT ecosystem Diia City: Launch of a special legal and tax regime for IT industry (Jan 2022) 5% Business reforms Selected results criminal proceedings by the NABU with 322 cases filled to the courts and 56 convictions new units were formed from 490 units. This step is expected to increase the efficiency of local governance datasets to be published by various government bodies. To keep the data, "Diia. Open Data" portal has been created Ukrainians already had access to the 4G in Sep 2021 (vs 12m in March) The reform is expected to boost the coverage to 95% in 2023 digital transformation projects in the fields of education, healthcare, justice, economics and trade, energy and infrastructure will be income tax rate for residents (vs 18% in other industries), companies will be able to choose between standard corporate tax (18%) and tax on distributed profits (9%) should be the value of an investment project to receive a manager responsible for the project preparation Business climate FDI attraction: law to improve the investment climate in Ukraine voted by MPs in July 2020 EUR 20m+ 0000 Big Construction: started in 2019, expanded in 2020-2021 5,100 km roads and 250 bridges built and reconstructed in 2021 Land market: Law on land market voted by the MPs in March 2020, the market officially started in July 2021 219k ha of land sold since the launch of the market (July 2021 - January 27th, 2022) SME: Law on facilitating connection for small and medium businesses to power lines (July 2021) 112 days should be spent now (vs 267 before) to connect small businesses to power lines Sources CMU, Ministry of Digital Transformation, NBU, Ministry of Agrarian policy and Food of Ukraine, NABU, Verkhovna Rada February 2022 32 32#33February 2022 1 Solid foundation for long-term economic growth 2 Return to gradual fiscal consolidation 3 Prudent debt management strategy 4 5 Reviving business climate and development prospects Strong focus on ESG considerations BA 33 33#34Ukraine's Paris agreement commitments Electricity production from RES, TWh Share or RES in Ukraine is a Party to the total power output, % 0.9% 1.0% 1.2% 1.7% 3.6% 7.3% 8.4% UNFCCC and is one of the first countries which ratified the Paris Agreement. Ukraine's 1st NDC defines GHG emissions 5.5 11.9 10.9 ESG: environmental RES installed capacity dynamics as of eop, GW ■ SPPS WPPS ■Biomass and Biogas 8.0 6.7 1.5 1.1 4.7 1.0 6.2 5.4 target as 'not exceeding 60% of the 1990 level'. 2.6 1.5 1.6 1.9 1.7 1.2 3.6 0.7 0.8 0.4 0.3 0.3 0.3 1.2 0.4 0.5 0.8 2015 2016 2017 2018 2019 2020 11m'21 2015 2016 2017 2018 2019 2020 11m'21 Key environmental initiatives / commitments In July 2021, the 2nd NDC were published, aiming to reduce GHG emissions to 35% of the 1990 level by 2030 (37% as of end 2019) The draft of 2nd NDC targets the share of renewables to account for 30% by 2030 (vs. 25% actual target). Sources SAEE, Ministry of Energy of Ukraine, Ukrenergo 2016: Ukraine signed the Paris agreement in April and ratified it in September 2017: the government adopted the Energy Strategy of Ukraine until 2035. It outlines measures to: (i) reduce greenhouse gas emissions, and (ii) restructure the coal sector to reduce its environmental impact June 2020: Government signs Memorandum with green energy producers August 2020: IFC Partnered with Ukraine's National Securities and Stock Market Commission to Boost Green Finance March 2021: Ukraine approved National Economic Strategy 2030, committing to reach 25% share of renewables as of 2030 June 2021: President signed a law on the launch of "Green Country" project, aimed at increasing the forest area by 1m ha in 10 y. November 2021: Debut 5-year Green and Sustainability-linked Eurobond issuance for a US$ 825m size at 6.875% yield November 2021: Ukraine has made important commitments on COP26 UN Climate Change Conference (reduce GHG emissions by 7% vs 2019 over the next 10 years and become a carbon-neutral country by 2060; signed the Global Initiative to Reduce Methane Emissions by 30% by 2030 compared to 2020 levels, etc.) February 2022 34 =4#35ESG: social (1/2) Ukraine belongs to High Human Development group within UNDP HDI (which is also used by selected credit rating agencies) and demonstrates consistent improvement since 2015 While life expectancy and education indices perform relatively in line with the regional peers and generally overperform rating peers, the income measure, GNI per capita, is the one pulling the country's ranking down Sources UNDP, Ministry of Education and Science of Ukraine, Ministry of Health of Ukraine Ranking position (out of 189) UNDP Human Development Index 2020 Life expectancy, years Exp. years of schooling GNI per capita, US$k UKR 72 UKR 15 UKR 13 Regional peers Rating peers UKR POL HUN 74 32 POL 79 POL 16 35 POL HUN 77 HUN 15 HUN 31 40 40 49 ROU 49 BGR HRV EGY NGA 161 GHA TUR 138 116 ROU 76 ROU 14 ROU BGR 75 BGR 14 56 BGR 23 43 HRV 79 HRV 15 HRV EGY 13 EGY 11 72 EGY NGA 10 NGA 5 GHA 12 GHA 64 NGA 55 54 TUR TUR 78 GHA 5 17 TUR 29 28 28 In order to further enhance the country's human capital, both education and healthcare sectors are currently undergoing reforms with the following key priorities: • Education: (i) affordable and quality pre-school education, (ii) New Ukrainian School, (iii) modern professional (vocational) education, (iv) quality higher education and development of adult education, (v) development of science and innovation Healthcare: (i) implementation of the new financing mechanism "money follows the patient", (ii) introduction of "family" doctors, (iii) primary care, palliative care, and emergency medical care 100% funded by the state, (iv) new methods for procuring and distributing vaccines, (v) new licensing and educational standards for doctors, etc. February 2022 35#36ESG: social (2/2) One of the key feature of Ukraine's structural reform agenda is enhancing social development and ensuring comprehensive economic growth. Ukraine's strategy to support rural development is based on six key pillars: (1) Regional development (2) Safe and affordable drinking water With the State Strategy for Regional Development 2021-2027, Ukraine aims to, among others: Increase per capita gross regional product in 75% of regions with the lowest rates to the level of the top 25% Increase the Regional Human Development Index in 75% of regions with the lowest rates to the level of the top 25% (4) Digital transformation (key 2030 targets) Targeted cumulative number of people to be provided with quality drinking water (millions) 7.4 5.6 3.9 2.4 1.1 2022 2023 2024 2025 2026 Source "Drinking water of Ukraine" for 2022-2026 (5) SMEs support 95% of citizens are active users of high-speed Internet 99% of all highways and railways are covered by mobile internet technologies 200 99% Ukrainian cities to switch to digital management platforms of processes are digital in the following areas: education, medicine, transport, public safety, social security, etc. Source National Economic Strategy 2030 State program "Affordable loans 5-7-9%" was launched to provide financing support to SMEs (3) Development of accessible transport National Transport Strategy 2030 is aiming to maximize the transport potential of Ukraine: Reduce the fatalities due to road accidents by 50% by 2030 Increase in the share of electric transport in domestic traffic to 75% by 2030 Increase in the share of accessible public transport for people with disabilities to 50% by 2030 At least 6bn transported passengers in 2030 (from 4.3bn in 2019) (6) Gender equality Key targets of the State Strategy for Equal Rights and opportunities for Women and Men until 2030: 2022- 2025- 2028- 2024 2027 2030 • • A SME can obtain a loan of UAH 1.5m for a period of up to 5 years Since the beginning of the program, 33,436 loans have been issued up to Share of women among deputies in Ukrainian parliament, (%) 21% 30% 40% (UAH 85.2bn as of January 31, 2022) Share of women among deputies of regional and local councils, (%) Share of gender sensitive budget programs, (%) 30% 30% 40% 20% 30% 40% February 2022 BA 36#37Ukraine vs peers in governance ratings Sustainable Development Goals Index 2021 Rating: 0 (worst) to 100 (best) 80 79 76 75 74 80 80 69 63 49 70 70 ESG: governance WGI and other developments on governance Worldwide Governance Indicators 2020 Government Effectiveness Higher better 60 Lower worse TI performance within Analyzes country's 17 goals Open Budget Budget International Partnership Index 2019 UKR POL HUN ROU BGR HRV EGY NGA GHA TUR 63 63 60 60 71 68 64 45 43 21 Voice and Accountability Egypt 54 51 - Nigeria - Turkey • Ukraine 40 20 Regulatory Quality Rule of Law Rating: 0 (worst) to 100 (best) Analyzes country's budget transparency Investor UKR POL HUN ROU BGR HRV EGY NGA GHA TUR 40 Relations IIF INSTITUTE OF INTERNATIONAL FINANCE 40 Index 2020 Rating: 0 (worst) to 42 (best) Analyzes country's investor relations function UKR Sources U.S. Department of State, World Bank, UN, TPPR, International Budget Partnership, IIF 37 36 37 27 26 25 16 20 20 42 POL HUN ROU BGR HRV EGY NGA GHA TUR Regional peers Rating peers Worldwide Governance Indicators (WGI) are published by the World Bank and constitute an important basis for sovereign credit ratings Ukraine performs in line with its rating peers demonstrating relatively solid performance in Voice and Accountability, Government Effectiveness and Regulatory Quality pillars Besides the mentioned indices, Ukraine has also topped Transparent Public Procurement Rating in 2020 (among 40 countries) European Open Data Portal named Ukraine as one of the trend-setter in opening up the finance data in Europe because of its online data platform E-data. This platform combines several three portals: Spendings, OpenBudget, ProlFls. February 2022 BA 37 37#38February 2022 Robust focus on delivering SDGs SDG Performance: Ukraine vs regional and rating peers Regional peers ■2021 SDG Index Score 2021 SDG Index Rank 76 74 75 70 70 74 79 48 45 36 39 25 80 62 29 15 114 Rating peers 160 71 60 49 Ukraine Moldova Romania Turkey Bulgaria Hungary Poland Ghana Nigeria Tunisia >0 overperformance 39 ■Distance to Regional Average Distance to Rating Peer Average 30 28 23 21 21 20 11 1 3 3 3 2 1 (3) (5) (0) (3) (14) <0 underperformance ZERO 1 POVERTY MUNGER SSS 3 GOOD HEALTH AND WELL-BEING W 58 | 26 15 4 2 0 (3) (10) (9) 4 QUALITY 5 GENDER EDUCATION EQUALITY 6 CLEAN WATER AFFORDABLE AND DECENT WORK AND MOUSTRY.INHONATION AND SANITATION CLEAN ENERGY ECONOMIC GROWTH 10 REDUCED AND INFRASTRUCTURE INEQUALITIES 11 SUSTAINABLE CITIES AND COMMUNITIES RESPONSIBLE 12 CONSUMPTION AND PRODUCTION CLIMATE 13 ACTION 8 (12) (10) (7) 19 5 10 14 BELOW WATER 15 LAND 16 PEACE JUSTICE AND STRONG INSTITUTIONS PARTNERSHIPS FOR THE GOALS Ukraine performs at the higher end of the SDG Index overperforming all of the regional (except for Hungary and Poland) and rating peers: Regional peers: Ukraine outperforms regional peers the most in SDG 10 "Reduced inequalities", SDG 14 "Life below water" and SDG 17 "Partnership for the goals", while the largest underperformance is attributable to SDG 9 "Industry innovation, infrastructure", and SDG 15 "Life on land" • Rating peers: Ukraine outperforms rating peers in all but three goals, namely SDG 12 "Responsible consumption and production", SDG 13 "Climate action", and SDG 15 "Life on land" BA 38#39February 2022 MINISTRY OF FINANCE OF UKRAINE Debt Policy Department Team Should you have any questions and / or suggestions, please, do not hesitate to contact us via: [email protected] +38 044 277 5455 BA 39