#1197 Ukraine Investor presentation MINISTRY OF FINANCE OF UKRAINE September 2019#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. 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September 2019 2#3Ukraine's economy: illustrative success stories 2014/2015 2018/2019 Real GDP growth (6.6)% / (9.8)% Consumer inflation (eop) Reserves (eop) Primary state 24.9% / 43.3% US$ 7.5bn (2014) / US$ 13.3bn (2015) 3.3% (2018) / 4.6% (Q2 2019)1 9.8% (2018) / 9.1% (Jul 2019, y-o-y) US$ 22.0bn (Sep 2019) budget balance % State debt to GDP (1.9)% of GDP (2014) 67.1% (2015) Quasi-fiscal deficit Naftogaz at 5.5% of GDP (2015) Sources State Statistics Service of Ukraine, NBU, State Treasury, Naftogaz Note 1 Preliminary estimates September 2019 1.6% of GDP (2018) 52.3% (2018) c.UAH 137bn paid in taxes and dividends to state budget in 2018 3#4September 2019 1. A story of recovery and renewal supported by reforms achievements 2. Reforms achievements: irreversible steps towards big changes 3. Fiscal consolidation supporting a prudent debt management strategy 4. Continuous support from economic partners Appendices Agenda 4#5Solid economic recovery track (1/3) 2018 nominal GDP: US$ 131bn GDP per capita dynamics, US$ US$ 2,125 2015 +3% 2016 US$ 2,188 +21% Comments Ukraine's real GDP is growing for fourteen consecutive quarters in a row Real GDP growth accelerated further to 4.6% (y-o-y) in Q2 2019 compared to 3.8% in Q2 2018 and 2.7% in Q2 2017 In 2018 Ukraine witnessed a 7.8% real growth in agriculture, 8.5% ― in construction, and 1.6% increase in industrial production. In 7m 2019 the positive trend continued with construction, agriculture and industrial output growing by 21.8%, 12.0% and 0.4%, respectively Strong consumer demand remains the key driver of real growth dynamics followed by the accelerated investments Private consumption contribution to real GDP growth accounted for 8.0% in Q1 2019, whereas positive contribution of fixed capital accumulation totaled 2.5% Key economic sectors output growth (y-o-y)¹, % Real GDP growth (y-o-y), % 4.6% 3.3% 2.4% 2.5% 2.5% (6.6%) 2014 (9.8%) 2015 2016 2017 2018 Q1 '19 Q2 '19 Source State Statistics Service of Ukraine Component contribution into real GDP growth, % 6.3% 5.9% 2.8% 1.8% 2.5% 2.3% 8.0% 2.5% 50% 40% 30% 20% US$ 2017 10% 2,640 0% (10%) +17% Agriculture Construction (20%) 2018 US$ 3,093 Jan Jan-Mar Jan-May Jan-Jul Jan-Sep Jan-Nov Jan Jan-Mar Jan-Mar Jan-Jul Jan-May Jan-Sep Jan-Nov Jan-May Jan-Jul 2016 2017 2018 September 2019 Source State Statistics Service of Ukraine 21.8% 12.0% (1.3%) 0.4% -Industrial production Jan-Sep Jan-Nov Jan Jan-Mar Jan-May Jan-Jul 2019 (14.0%) 2015 2016 Private consumption ■Gross fixed capital accumulation 2017 2018 Q1 2019 Note 1 To the corresponding period of the previous year on a cumulative basis Source State Statistics Service of Ukraine 5#6Comments Increasing consumer demand remains the main driver of Ukraine's real GDP growth Final private consumption grew by 8.9% (y-o-y) in 2018 and further accelerated to 10.7% in Q1 2019, whereas retail trade turnover increased by 10.1% in July 2019 Consumer demand is driven by a number of factors, including among others improving consumer sentiments, rise in real wages, consumer lending and personal money remittances Real wages went up by 9.5% in July 2019 with growth being supported by the economic expansion, 12.1% increase in minimum wage in 2019 and increased competition for the labor force Private consumption and consumer sentiments evolution September 2019 Consumer sentiments index (eop) Private consumption growth, % (y-o-y) Source GFK, Info Sapiens, State Statistics Service of Ukraine Jan-15 Solid economic recovery track (2/3) Real wages growth and average monthly nominal wages 30% 20% 10% 0% (10)% (20)% (30)% (40)% 10 971 12,000 10,000 9.5% 8,000 6,000 4,000 Real wages growth (y-o-y), % 2,000 Average monthly nominal wage, UAH ,0 90 82.4 14% 12.0% 12.2% 15% 80 65.6 11.7% 10.7% 65.3 8.8% 12% 10% 4.0% 70 57.1 55.5 59.4 59 60 50.1 60.3 57.7 8.2% 62.6 62.2 5% 2.4% 10% 8.5% 0% 50 6.2% 7.5% 8% 5.3% 6.9% (5%) 40 6% 30 (10%) 2.7% 4% 20 (15%) 2% 10 (20%) 0 0% (25%) (20.7%) Q3 Q4 Q1 '16 '16 '17 Q2 Q3 Q4 Q1 Q2 Q3 '17 '17 '17 '18 '18 '18 '18 Q4 Q1 '19 GR Q2 '19 (30%) (25.3%) Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Source State Statistics Service of Ukraine Retail trade growth (y-o-y)1, % Note 1 To the corresponding period of the previous year on a cumulative basis Source State Statistics Service of Ukraine Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 6 CO Jul-19 BA Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 5.1% 6.8% Jul-18 Oct-18 Jan-19 10.1% Apr-19 Jul-19#7September 2019 Solid economic recovery track (3/3) Comments Investment demand is another driver of economic recovery Industrial output grew by 0.4% (y-o-y) in 7m 2019 predominantly owing to the increased production in pharmaceuticals (11.3%), food, beverages and tobacco production (3.1%), and mining industry (2.6%) Gross fixed capital went up by 17.4% in Q1 2019 indicating increased investment activity of Ukrainian enterprises Capital investments witnessed 12.3% growth (y-o-y) in H1 2019, thus solidifying further economic growth prospects Industry has been the major contributor to capital investments in 2018 accounting for c.40% followed by construction and agriculture with 11% and 10% shares, respectively H1 2019 capital investments split by sector, % Gross fixed capital accumulation, % (y-o-y) 5.4% 17.9% 27.4% 24.0% 21.3% 18.2% 14.5% 12.8% 20.3% 17.6% 13.2% 10.2% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 '16 '16 '16 '16 '17 '17 '17 '17 '18 Source State Statistics Service of Ukraine Capital investments dynamics 17.4% Q2 Q3 Q4 Q1 '18 '18 '18 '19 ■Industry 17% ■Construction ■Agriculture 6% 40% 8% US$ 8.7bn ■Transport ■Trade 8% (1.7%) 10% 11% State administration and security Other UAH bn 273 359 413 526 207 26.5% 234 22.1% 19.3 18.0% 14.1 15.5 12.5 سلات 12.3% 16.4% 8.7 7.7 2015 2016 2017 Capital investments, US$ bn 2018 H1 2018 H1 2019 Real growth, % Source State Statistics Service of Ukraine Source State Statistics Service of Ukraine Note 1 To the corresponding period of the previous year on a cumulative basis 7#8Extension of trade partner universe Overall Ukraine concluded 18 FTAs with 46 countries 2001 2008 FTA with Macedonia Ukraine entered WTO FTA with EFTA 2012 countries FTA with Montenegro 2013 FTA with CIS countries Comments Ukraine sets a course towards increasing and diversifying its base of trading partners Following a change in its trading policy Ukraine has undergone a major shift in trade flows towards the EU market in recent years . The EU's share in Ukraine's foreign trade turnover¹ went up from 29% in H1 2013 to 39% in H1 2019 while Russia's share dropped from 27% to 10% DCFTA (in full force since September 2017) provides further opportunities in the EU markets The FTA with Israel was ratified in July 2019 and stipulates elimination of import duties for about 80% of Ukrainian and 70% of Israeli industrial goods Growth (y-o-y) of selected commodity exports in H1 2019 Geographic breakdown of trade in H1 2013-H1 20191 38% 39% 29% 27% 27% 23% 20% EU countries Asian countries Source NBU 17% 15% 14% 12% 10% 10%9% 9% Russia Other CIS Other TH1 2013 TH1 2016 TH1 2019 Ukraine's H1 2019 exports and imports breakdown Exports DCFTA with the EU 2017 FTA with Canada FTA with 2019 Israel Imports Product category Fuel & energy Growth (vs H1 2017) +27.9% + US$ 99m 3%2% 2% 5% 15% 10% 2% 2% $ 4% 5% 42% Chemicals +25.9% +US$ 258m US$ 9% 21% 24.5bn US$ 28.2bn 20% 8% Mineral products +23.0% + US$ 372m 20% 4% %2% 20% Wood & paper products +22.6% +US$ 177m Textile & shoes +19.1% + US$ 84m ■Agriculture products ■Mineral products Chemical products Non ferrous metals Fuel and energy products Source State Statistics Service of Ukraine ■Ferrous metals ■Machinery and equipment Wood and paper products ■Textiles and shoes Other BA Notes 1 Sum of export and import of goods and services September 2019 8#9Enhancement of trade relations with the EU Ukraine is among 5 largest exporters of agricultural products to the European Union Key highlights Following the full implementation of DCFTA in September 2017, Ukraine's export of goods and services to the EU increased by 4.9% in H1 2019 (y-o-y) while imports from the EU countries grew by 8.6% Export of services has increased by 4.5% over H1 2019 (y-o-y) totaling US$ 2.0bn with the UK, Germany, and Poland being the main destinations Export of goods grew by 5.0% over H1 2019 (y-o-y) totaling US$ 10.3bn with the Poland, Italy, and Germany being the largest partners Change in goods export structure indicates considerable rise in export of agriculture and mineral products Key EU destinations of Ukraine's export of goods, US$ bn Dynamics of trade in goods and services with the EU, US$ bn Inflows % of total CA operations in EUR 20.7% 22.6% +4.9% I 11.7 Outflows 38.2% 38.5% +8.6% I 13.4 12.3 12.3 Export Import TH1 2018 TH1 2019 Source State Statistics Service of Ukraine Note 1 Q1 2018 and Q1 2019 data Export of selected goods to the EU, US$ bn Key fast growing EU destinations in H1 2019 (y-o-y): 1. Ireland: +99% 2. Denmark: +50% TH1 2018 TH1 2019 1.6 1.7 1.5 1.3 0.9 1.1 0.9 0.8 0.8 0.8 4.1 4.5 Agriculture products 2.5 3.3 KE 2.0 Ferrous metals 1.7 2 1.3 Mineral products' 1.5 1.5 1.4 Other 2.4 2.4 TH1 2018 TH1 2019 Source State Statistics Service of Ukraine Note 2 Incl. fuel and energy products Machinery and equipment 3. Luxembourg: +48% Poland Italy Germany Netherlands Hungary Other September 2019 Source State Statistics Service of Ukraine 9#10Firm external position leading to less vulnerability to external shocks September 2019 Current and financial account balances, US$ bn CA as % of GDP (3.4)% 1.8% (1.4)% (2.2)% (3.4)% 7.4 5.0 2.6 1.6 Comments The trade balance deficit increased to 8.6% of GDP in 2018 relating to growing consumer and investment demand. The trend is largely supported by rising mineral resources and machinery imports • Import of mineral products grew by 15.6% (y-o-y) in H1 2019, while import of non-ferrous metals, as well as machinery and equipment increased by 15.2% and 8.7%, respectively Negative trade balance is offset by growing personal money remittances together with capital account inflows resulting into positive overall BoP of US$ 2.9bn in 2018 Private money remittances witnessed 20% (y-o-y) growth in 2018, thus solidifying Ukraine's external accounts Private money remittances, US$ bn (4.6) % of GDP 4.9% 7.6% 8.1% 8.3% 8.5% 11.1 9.3 23% 20% 7.5 6.5 7.0 7% 8% 2.9 1.8 (1.2) (1.3) (0.9) (1.6) (2.4) (4.5) (9.1) 2014 2015 2016 ■Current account balance 2017 2018 7m 2018 7m 2019 Financial account balance Ukraine's trade balance dynamics, US$ bn 65.4 59.1 53.9 47.9 46.0 33.2 36.1 (3.5%) (2.6%) 2.6 2.8 (6.9%) (7.7%) (38.7) (41.9) (50.2) (52.5) (8.6%) (24%) 2014 (62.5) 2015 2016 2017 2018 Q1 2018 Q1 2019 (70.0) 2014 (70.3) 2015 2016 2017 2018 7m 2018 7m 2019 Personal money remittances y-o-y growth, % Export of goods and services Import of goods and services Source State Statistics Service of Ukraine, NBU Trade balance (% of GDP) BA 10#11Prudent monetary policy implemented by independent regulator Medium-term consumer inflation target: 5%+/-1% Ukraine's international reserves reached a 6-year high as of September 2019 Comments The NBU pursues tight monetary policy with key policy rate of 18.0% preserved since Sep 2018 until Apr 2019 when a cycle of key policy rate cuts has commenced and it was gradually reduced to 16.5% in Sep 2019 According to the NBU, steadily decreasing inflation enables the regulator to carry out the mentioned cycle of key policy rate cuts Owing to fairly tight monetary conditions the regulator expects to bring inflation to its medium-term target range (5% +/- 1%) in 2020 The international reserves grew by 0.8% (m-o-m) in August 2019 to US$ 22.0bn mainly due NBU net FX purchase (US$ 299m) and revaluation of financial instruments (US$ 133m) UAH/US$ exchange rate dynamics 35 30 25 10 2505 15 سسل Consumer price index (CPI) change and key policy rate¹ CPI, % Key policy rate, % Actual CPI change, % (y-o-y) CPI change targets 14 18.0 18.0 18 17.0 16.5 16 12%±3% 16.4 12.5 13.1 8%±2% 10.0 10 8 6.9 4 9.1 6%+2% 5%±1% 12 NO 006+2O III.2019 IV.2019 1.2020 II.2020 III.2020 IV.2020 II.2019 III.2016 IV.2016 1.2017 II.2017 III.2017 IV.2017 1.2018 II.2018 III.2018 IV.2018 1.2019 1.2016 II.2016 Gross international reserves, US$ bn 3.0x 3.0x Months of imports² 1.8x 25.09 25 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 Sep-19 22 3.2x 3.4x 3.5x 18.9 20 16.4 15.6 15 13.1 10 10 5.6 5 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 16.6 22.0 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Notes 1 2 Key policy rate stated as of beginning of each month Imports of goods and services of the immediately succeeding month are used for these calculations September 2019 Source NBU BA 11#12September 2019 1. A story of recovery and renewal supported by reforms achievements 2. Reforms achievements: irreversible steps towards big changes 3. Fiscal consolidation supporting a prudent debt management strategy 4. Continuous support from economic partners Appendices Agenda 12#13Challenging reforms start bearing fruit (1/2) Public governance Public finance Business climate Key areas Parliament: pro-Western parties held majority of mandates after the snap elections ▷ Decentralization: transfer of budgetary powers to local self-government bodies - total of 878 newly amalgamated communities ▷ Anti-corruption: full anti-corruption infrastructure in place Taxation: decrease in number of taxes and reduction in tax rates Debt management: MTDS, return to markets, significant involvement of international investors and effective investor relations Medium-Term Budget Planning introduced ▸ Public expenditures and procurement: electronic procurement system fully effective ▸ Foreign trade: DCFTA in full force, FTA with Israel signed in early 2019, FTA with Turkey under negotiations ▸ Competitiveness and Deregulation: a great leap forward in international rankings ▸ Investment climate: introduction of effective mechanisms for dealing with bankruptcy LTM1 update High Anti-Corruption Court (HACC) commenced its operations (Sep 2019) ⚫ New Supervisory Boards in state- owned banks commenced their work (June 2019) • 38 judges were approved to the HACC and its Appeal Chamber (April 2019) ⚫ Link between Clearstream and NBU depository launched (May 2019) • Resolution on State Fiscal Service and State Customs Service reform with appointment of respective heads in May and July 2019 ⚫ Fiscal stability: timely adoption of 2019 State budget and in line with IMF requirements (November 2018) • SME Development Office launched (July 2019) Regulations on improvement of Doing Business ranking adopted by the CMU (March 2019) Bankruptcy Code to protect creditors' rights and streamline bankruptcy procedures (October 2018) Selected results 91% increase in revenues of local budgets in 2018 vs 2015 50 directorates with 1,305 new reform staff positions in civil service 751 criminal proceedings by NABU with 212 cases filed to the courts 14-fold increase in non- residents' domestic government bond portfolio to US$ 3.4bn since the beginning of 2019 61% of GDP-state and state-guaranteed debt in 2018 (vs 81% in 2016) 11 number of taxes (vs 22) Ease of Doing Business ranking improvement to 71st in 2018, 41 places up from 2014 UAH 1.6bn Privatization proceeds transferred to state budget in 2018 Sources CMU, Ministry of Finance, NBU, NABU Notes 1 LTM last twelve months September 2019 13#14Challenging reforms start bearing fruit (2/2) Financial sector Energy sector Key areas ▸ Monetary policy: inflation-targeting framework ▸ Banking sector: sector clean-up, currency controls liberalization NBU role: enhancement of the NBU's supervisory and regulatory role ▸ Energy sector diversification: intensified domestic extraction and complete substitution of Russia in favor of the EU for gas imports since late 2015 Liberalization of energy markets: transition of electricity market to European model, increase in levels for gas and heating tariffs, elimination of operational deficit of Naftogaz of Ukraine "The Ukrainian authorities have successfully restored macro-economic stability and growth, with support from the international community. Prudent fiscal and monetary policies and a flexible exchange rate regime have helped reduce fiscal and current account deficits. Reserves have been partly rebuilt and confidence has improved." Mr. David Lipton, First Deputy Managing Director of the IMF December 18, 2018 Sources CMU, NBU, Prozorro, Naftogaz, Financial Times September 2019 LTM update • New liberalized currency regulation system became effective (February 2019) Recommendations for State- Owned Banks on Treating Non- Performing Loans (January 2019) • NBU Macroprudential Policy Strategy to reinforce Ukraine's financial system (December 2018) Two oil and gas licensing rounds conducted (March and May 2019) • Start of debt enforcement process by Naftogaz following its victory over Gazprom in Stockholm Arbitration (February 2019) Bringing gas prices for households closer to market level (April 2019) Selected results 103 banks withdrawn from the market over 2014-2019 UAH 23.4bn record high profits posted by the Ukrainian banking sector in January - May 2019 US$ 2.56bn financial gain in Stockholm Arbitration 2.3% CAGR in SOE Ukrgazvydobuvannia's gas extraction volumes (2015- 2018) "The government in Kiev can justifiably claim to have made more progress with structural reform in just four years than any administration since the country gained its independence in 1991." Financial Times, Special Report Investing in Ukraine September 12, 2018 BA 14#15Business climate improvement to accelerate growth potential Medium-term +81 p. government priority action plan target Last Doing Business improvement (76-71) Trading across borders: +41 (positions) Enforcing contracts: +25 Dealing with construction Ease of Doing Business ranking 80 30 71 76 83 80 87 112 permits: +5 137 Protecting minority investors: 152 +9 2012 2013 2014 2015 2016 2017 Source Doing Business 2018 2019 2020E Last Logistics Performance Index (WB) improvement (80✈66) Business expectations index by the NBU >100% positive expectations Improving business climate Transparent taxation: automatic system of VAT reimbursement launched since April 1st, 2017 VAT reimbursement, UAHbn 131.7 120.1 94.4 2016 2017 2018 94.1 75.2 68.3 7m 2017 7m 2018 7m 2019 Sources National Investment Council, State Fiscal Service of Ukraine Global innovation index +24 p. 121% 120% 43 Increased airport traffic: 25% (y-o-y) 117% 117% 118% 50 47 56 115% 63 64 113% 71 in 2018 109% 109% National road fund in place since 2018 2013 2014 2015 2016 2017 2018 2019 98% 100% Concession of sea ports (in progress) Q1 Q2' Q3' '16 16 16 Q4' Q1' Q2' Q3' Q4' Q1' Q2' 16 17 17 18 17 17 18 Q3' Q4' Q1' Q2' 18 18 19 179 Source World Bank Source: NBU 47th position in general ranking and 2nd position among lower-middle income economies in 2018 2019/2013 strong improvement in business sophistication (+32 p.), knowledge and technology outputs (+17 p.) Source Global Innovation Index Notes 1 Not lower than 30 position by end-2020 September 2019 BA 15#16Main state institutions to support foreign investors: Ukrainelnvest Your Investment Matters National Investment Council Investment projects support Protection of investors' rights Assistance in cooperation of investors with the state Sectoral policy recommendations 0.6 Boosted activity of foreign investors FDI to real sector of Ukraine, US$ bn 34% CAGR 1.6 1.4 1.0 2015 2016 Source NBU 2017 2018 Other important investors UnionPay RYANAIR CMEC ER EX Nestle acciona 中粮 ** H&M COFCO 自然之源 重塑你我 Sumitomo Corporation September 2019 Sources: Ukraine Invest, National Investment Council of Ukraine IKEA SUMITOMO ELECTRIC - General Electric Transportation US$ 1bn 15-year framework agreement Renovation and modernization of Ukrzaliznytsia's traction rolling stock Feb 2018 ПST NBT Powering the green future Ti Brookfield Asset Management Total investments reaching c.US$ 160m Development of Innovation District IT Park in Lviv Jun 2018 B BAYER Bayer E R Project cost c. EUR 370m Acquisition Ukrainian wind power farm and c.300 MW wind power project Aug 2018 US$ 200m investment in seed plant 100 km west of Kyiv The plant will provide 25-30% of all corn harvested in Ukraine Sep 2018 SALIC M Acquisition of Mriya group's Ukrainian farming assets Scater Solar Powerchina Project cost c. EUR 124m Construction of 148 MW solar power plant with commissioning scheduled for 2020 Nov 2018 - June 2019 ERME 16#17September 2019 1. A story of recovery and renewal supported by reforms achievements 2. Reforms achievements: irreversible steps towards big changes 3. Fiscal consolidation supporting a prudent debt management strategy 4. Continuous support from economic partners Appendices Agenda 17#18Ambitious 2019 state budget reflecting continuous fiscal consolidation 2019 state budget revenues split (2019 State budget Law) 2019 state budget expenditures split (2019 State budget Law) State budget revenues: UAH 1,026bn 2019 vs. 2018 State budget figures: Total revenues: UAH 1,026bn (+12%) Total expenditures: UAH 1,112bn (+12%) Budget deficit: UAH 90bn / 2.3% of GDP1) Other tax revenues 22% Notes 1 Other Non tax revenues 15% 1% Corporate income tax 9% State budget balance, UAH bn VAT 43% Personal income tax 10% State budget expenditures: UAH 1,112bn Education' 5% Health Other 3% 2% Public admin. 5% Economic activity 7% Debt service 13% Social protection 18% Interbudgetary transfers 26% Security and Defense 21% State budget general fund performance, UAH bn Plan Act. |(68.9)||(63.7) Plan Act. (63.0)||(50.6) Plan Act. (62.3)||(54.9) 843 834 702 698 Act. primary balance 2.0% Act. overall balance 1.1% 2.1% 1.6% Plan Act. as % of GDP (2.3)% (2.9)% (1.6)% (1.7)% Overall balance |(45.1)||(38.9) 63 56 55 47 39 34 26 15 11 Budget deficit defined as revenues minus expenditures and minus net lending September 2019 Overall balance Primary balance 2015 2016 2017 2018 2019 (45) (48) (64) (70) (84) (78) (59) (81) (90) ■Primary balance (Budget Law) Overall balance (Budget Law) ■Primary balance (Actual) Overall balance (Actual) 492 504 576 575 +2% (0.2)% (1)% (1)% (2)% (1)% (1)% (2)% (554) (543) (645) (638) (764) (753) (906) (884) 2015 2016 2017 2018 ■Revenues (plan) ■Expenditures and net lending (plan) Source State Treasury of Ukraine Revenues (actual) Expenditures and net lending (actual) 非 18#19September 2019 State budget execution (7m 2019) Overall state budget State budget general fund 7m 2019 7m 2019 7m 2018 UAH m Actual Plan % diff. Actual 7m 2019 Actual % diff. FY 2018 Revenues 516,444 537,973 (4%) 513,508 584,137 +14% 928,115 FY 20191 1,026,122 % diff. +11% Tax revenues, incl. 401,688 437,817 (8%) 406,760 440,460 +8% 753,816 860,659 +14% Personal income tax and income charge 61,802 58,339 +6% 50,494 61,802 +22% 91,742 106,155 +16% Corporate profit tax 53,671 51,180 +5% 54,005 53,671 (1%) 96,882 95,520 (1%) Fee for the use of mineral resources 28,191 31,791 (11%) 22,205 28,389 +28% 45,259 58,302 +29% Excises 38,450 47,064 (18%) 61,348 69,840 +14% 118,852 130,233 +10% VAT (net of VAT reimbursement) 205,390 234,649 (12%) 204,836 207,741 +1% 374,508 434,844 +16% Export and Import duties Other taxes and duties Non-tax revenues 12,759 1,423 13,457 (5%) 14,256 16,993 +19% 27,077 31,544 +16% 1,338 +6% (385) Expenditures (528,730) 114,757 100,156 (577,174) +15% 106,748 2,024 143,677 +626% (8%) General public functions, incl.: (88,592) (103,354) (14%) Debt service (65,024) (75,642) (14%) Security and Defense Economic activity (113,616) (123,006) (8%) (101,915) (11,897) (17,812) (33%) (24,638) (526,323) (586,491) (85,245) (90,203) (60,111) (65,024) (124,993) (28,621) (26%) +11% (505) 174,299 165,463 4,061 (5%) +6% (985,852) (1,112,120) (162,958) (197,205) +13% +21% +8% (115,431) (145,205) +26% +23% (213,900) (237,270) +11% +16% (63,601) (80,502) +27% Protection of environment (1,850) (2,781) (33%) (1,799) (2,236) +24% (5,241) (6,826) +30% Municipal utilities and services Healthcare (10) (23) +143% (297) (162) (45%) (17,598) (22,056) (20%) (7,135) (18,578) +160% (22,618) (38,446) +70% Intellectual and physical development (4,460) (6,048) (26%) (4,101) (4,545) +11% Education (19,234) (22,476) (14%) (24,818) (28,995) +17% Social welfare (118,315) (121,298) (2%) (89,125) (126,447) +42% Interbudgetary transfers (153,168) (158,342) (3%) (187,537) (161,849) (14%) Net lending 1,641 2,771 (41%) (542) (504) (7%) (10,107) (10,570) (44,324) (53,257) +20% (163,866) (199,627) +22% (298,940) (288,256) (1,514) (3,991) +5% (4%) +164% Primary balance 54,379 39,212 +39% 46,755 62,167 +33% 56,180 55,216 (2%) Overall state budget balance (10,645) (36,430) (71%) (13,356) (2,857) (79%) (59,251) (89,989) +52% Source State Treasury of Ukraine Notes ERME 1 Plan according to 2019 State Budget Law 19#20Consolidated budget execution (7m 2019) UAH m 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) VAT reimbursement Property taxes Export and Import duties Other taxes and duties Non-tax revenues 7m 2018 Actual 7m 2019 FY 2018 FY 2019 Actual % change Actual Plan % change 652,070 744,617 +14% 1,184,291 1,317,042 +11% 532,957 590,592 +11% 986,349 1,123,350 +14% 125,576 153,761 +22% 229,901 265,964 +16% 59,115 59,048 (0%) 106,182 105,029 (1%) 24,589 31,254 +27% 68,273 76,805 +12% 50,081 132,650 63,010 +26% 147,802 +11% 204,836 207,741 +1% 374,508 436,659 +17% (75,164) (94,130) +25% (131,659) 17,731 22,081 +25% 31,272 34,449 +10% 14,256 16,993 +19% 27,077 31,994 +18% 18,581 22,910 +23% 166,338 38,442 (77%) 119,112 154,025 +29% 197,942 193,692 (2%) Expenditures (643,826) (721,191) +12% (1,250,190) (1,440,073) +15% General public functions, incl.: Debt service Security and Defense Economic activity Protection of environment Municipal utilities and services Healthcare Intellectual and physical development Education (99,997) (108,955) (60,185) (65,419) (102,428) (125,636) +23% (51,402) (60,653) +18% (2,714) (3,368) +24% (12,453) (15,146) (57,124) (65,335) (13,764) (15,673) (116,612) (133,517) +9% (191,550) (233,712) +22% +9% (116,088) (145,711) +26% (215,050) (246,031) +14% (140,761) (174,398) +24% +44% +22% +14% +14% (8,242) (11,877) (30,345) (32,134) +6% (115,852) (127,594) +10% (28,993) (32,357) +12% +14% (210,032) (247,032) +18% Social welfare (187,332) (192,908) +3% (309,364) (334,939) +8% Net lending (726) (692) (5%) (1,893) (5,544) (193%) Primary balance 67,702 88,153 Consolidated budget balance 7,517 22,734 +30% +202% 48,296 (67,792) (128,576) 17,135 (65%) +90% Source State Treasury of Ukraine Notes BA 1 Plan as of end-July 2019 September 2019 20 20#21Prudent and proactive debt management strategy State and state-guaranteed debt structure (end-Jul 2019) As of end-July 2019, Ukraine's total state and state-guaranteed debt (US$ 82.4bn / UAH 2,067bn) split between: (In US$ bn) State debt State-guaranteed debt State and state-guaranteed debt dynamics, US$ bn Total (% of GDP) 69.4% 79.1% 80.9% 71.8% 60.9% Domestic T-bills Domestic in FX 6% IFIs 19% Bank loans 16.1% 2.4% 82.4 76.3 78.3 0.2 69.8 71.0 4.3 65.5 10.2 Domestic in 14.2 1.6 11.0 11.1 UAH 9.8 10.3 9.9 • 60% of external 39% debt, 40% of domestic debt 28.0 US$ 72.2bn US$ 10.2bn 72.2 65.3 67.2 60.1 60.7 55.6 88% of state debt, 12% of state- 22.9 guaranteed debt 2.8 Other external debt 4% Eurobonds 32% 8.3 2014 2015 2016 2017 2018 Jul 19 IFIs 81.5% ■State debt State-guaranteed debt State debt service schedule (end-Aug 2019)1, US$ bn Total debt service 13.4 9.6 6.9 6.7 8.3 State debt dynamics, US$ bn Total (% of GDP) 59.7% 67.1% 69.2% 61.5% 52.3% 72.2 65.3 67.2 60.1 60.7 4.4 55.6 32.3 26.8 27.5 1.8 3.7 24.7 29.2 21.2 4.4 3.0 4.7 1.7 3.0 2.3 1.5 1.4 1.2 0.8 0.9 1.3 30.8 34.4 36.0 38.5 39.7 39.9 2.5 1.9 1.6 1.5 1.4 2020E 2021E 2022E 2023E 2024E 2014 2015 2016 2017 2018 Jul 19 ■Interest Domestic debt ■Interest - External debt Principal Domestic debt Principal - External debt ■State external debt State domestic debt BA Notes 1 Incl. outstanding debt obligations only September 2019 Source Ministry of Finance 21 21#22Ukraine's 2019 gross financing needs. Based on 2019 State budget general fund US$ 11bn of borrowings budgeted Ukraine's 2019 Gross financing needs split by funding sources, US$ bn for 2019 US$ bn² 9.3 4.9 2.6 11.6 (6.9) (4.2) As of September 9, 2019, the following sources of financing 145.2 75.6 341.9 (202.0) have been tapped: US$ 600m World Bank partially- guaranteed 272.2 (0.6) UAH 106.3bn of UAH-denom. and US$ 1.96bn of FX-denom. domestic government bonds is the amount of instruments raised with maturity beyond 2019 (122.7) US$ 350m tap of 2024 Eurobonds (17.1) EUR 1bn Eurobond issuance Principal repayment Interest Primary balance UAH 268bn (equivalent of US$ 10.1bn) raised on domestic market o/w UAH 176.0bn in UAH-denominated bonds and US$ 3.4bn in FX denominated domestic bonds Gross financing needs State borrowings Domestic debt issuance External debt issuance Privatization proceeds Sources Ministry of Finance, 2019 State budget law Gross financing needs Domestic debt issuance External debt issuance Privatization proceeds UAH bn1 US$ bn² 341.9 11.6 324.8 11.0 202.0 6.9 122.7 4.2 17.1 0.6 September 2019 Figures in UAH were translated into US$ at 29.4 UAH/US$ (exchange rate 2019 State budget law is based on); for reference NBU UAH/US$ FX rate as of September 9, 2019 is 25.09 Notes 1 Figures based on 2019 State budget law 2 22 22#23Ukraine's domestic government bond holders Ways to enter Ukraine's domestic currency bond market: Open individual securities accounts with local custodians • Buy GDNS/CLNS which are clearable in Euroclear/ Clearstreaam • Buy eligible securities through the link established by international Key highlights With c.43% share the NBU is the largest holder of domestic government bonds followed by the banks, which account for c.42% of the portfolio Ukraine is making decisive steps to deepen domestic government bond market and to increase share of non- residents in local currency bonds portfolio A link between Clearstream and the depository of the NBU launched in the end of May 27, 2019 Share of non-residents in total domestic government bonds amount reached c.11% as of September 20192, Non-residents' portfolio increased almost 14x since the beginning of 2019 and more than twofold following Clearstream link setup Domestic government bonds held by non-residents Domestic government bond issuances (in UAH) UAH-denominated bonds (UAH m) Funds remitted to state budget up to 1 year 1-3 years 3-5 years over 5 years 2017 2018 YTD 20192 32,755 65,128 176,029 11,294 60,429 95,528 19,529 2,983 53,289 1,932 1,716 4,232 22,980 Weighted average yield at auctions, % 15.0% 17.8% 17.87% up to 1 year 15.2% 17.9% 18.8% 14.9% 16.2% 17.4% 15.1% 15.9% 16.0% 15.6% 9.8% 9.1% 1-3 years 3-5 years over 5 years Consumer inflation¹ 13.7% Nominal and real weighted avg yields at primary auctions, % depositories Held by non- 0.3 0.3 0.2 0.2 0.4 0.5 0.7 1.4 1.6 2.1 2.9 3.5 3.4 residents, USDbn 14.1% 16.1% 18.5% 18.9% 19.0% 18.8% 19.0% 18.9% 17.1% 16.9% 17.6% 13.2% 17.9% 16.7% 16.0% 16.3% 11.7% 12.9% 9.6% 10.9% 4.8% 8.4% 8.9% 8.9% 8.8% 10.0% 9.2% 10.9% 8.6% 8.9% 9.4% 7.6% 9.6% 9.1% 1.8% 1.8% 1.6% 1.6% 2.4% 3.3% 1.0% 1.0% 0.9% 0.8% 1.3% 7.3 7.2 6.4 [6.3 10.0 13.4 20.3 9.4% 8.0% 8.1% 6.9% 1.8% 2.7% 4.7% 5.4% 7.3% 4.7% 3.5% 1.8% 36.3] 42.2] 56.2 73.8 87.1 86.2 Notes 1 Actual CPI change (y-o-y) in December for 2017 and 2018, and in July for YTD 2019 2 As of September 6, 2019 Apr 18 18 18 19 19 19 19 Held by non-residents, UAHbn % of total portfolio (excl. NBU) Source Ministry of Finance Sep Oct Nov Dec Jan Feb Mar 18 2 19 19 May Jun Jul Aug Sep 19 19 19 18 18 18 % of total portfolio Jan Mar May Jul Sep Nov Jan 18 18 18 Nominal weighted avg yield, % CPI change (y-o-y), % Source Ministry of Finance of Ukraine, NBU Mar May 19 19 Real weighted avg yield, % 19 Jul 19 Sep 2 19 BA September 2019 23#24Fitch Ratings Rating: B, Positive Last update: Sep 6, 2019, upgrade from B- to B Key rating drivers of the last update: Timely access to fiscal and external financing Improving macroeconomic stability Declining public indebtedness Reduced domestic political uncertainty Expected macroeconomic policy continuity Consistent upgrade in credit ratings New government's strong stated commitment to structural reforms Engagement with IFIs MOODY'S Rating: Caa1, Stable Last update: Dec 21, 2018, upgrade from Caa2 to Caa1 Key rating drivers of the last update: Anticipated improvement in external strength due to IMF's SBA Adopted reforms to make incremental progress on reducing corruption and strengthening institutions Incremental improvement in Ukraine's resilience to the ongoing conflict with Russia BB BB- B+ B B- CCC+ CCC CCC- CC RD 06.09.2008 06.09.2009 06.09.2010 06.09.2011 September 2019 06.09.2012 06.09.2013 06.09.2014 06.09.2015 06.09.2016 06.09.2017 06.09.2018 06.09.2019 B STANDARD & POOR'S Rating: B-, Stable Last update: Apr 12, 2019, affirmed Key rating drivers of the last update: Sizable external debt repayments coupled with improving government finances Ukraine's likely compliance with the IMF program and the ongoing implementation of reforms Although uncertain financing outlook for government foreign currency redemptions beyond 2019 24 24#25Agenda 1. A story of recovery and renewal supported by reforms achievements 2. Reforms achievements: irreversible steps towards big changes 3. Fiscal consolidation supporting a prudent debt management strategy 4. Continuous support from economic partners Appendices September 2019 25 25#26Continuous and significant support from our partners Considerable support from international partners to public and private sectors in 2017-H1 2019 Description Institution MONETARY FUND WORLD BANK GROUP European Investment Bank European Bank for Recontraction and Development IMF 4-year Extended Fund Facility (EFF) program (2015-2019): c.US$ 8.5bn received. The EFF program replaced with a new 14-month Stand-By Program New Stand-By Arrangement (139% of quota) with total program size amounting to the equivalent of c.US$ 3.9bn approved by the IMF Board of Directors in December 2018 (first tranche of c.US$ 1.4bn disbursed immediately) US$ 750m Policy-Based Guarantee (PBG) to support institutional reforms and sustainable economic growth in Ukraine approved in December 2018 Two loans totaling EUR 349m and EUR 529m attracted under the entire amount of the PBG in December 2018 and February 2019, respectively IFC financing and advisory expertise for public and private sectors: Financing for Ukrainian PE fund, development of PPP projects at Ukrainian sea ports, loans to support private sector development, UAH-denominated bond issuance EBRD: C.EUR 543m of project financing to public and private sector provided in 2018 Current portfolio is composed from sustainable infrastructure projects (61%), industry, commerce & agribusiness projects (28%), financial institutions projects (11%) EIB: EUR 393m of loans granted in 2018 with c.34%¹ provided to Ukrainian private sector and the rest 66% directed towards transport connectivity and road safety improvement as well as upgrade of energy and road infrastructure EU: EUR 1bn macro financial assistance split into 2 tranches (EUR 500m disbursed in December 2018, second tranche expected in 2019) USA: US$ 250m funding dedicated to security and defense assistance to Ukraine in 2019 USAID: financial support to promote economic and social development together with sectoral reforms Notes Sources IMF, World Bank, the EU, US Treasury 1 Share of publicly disclosed loans provided to private companies as opposed to the Ukrainian public sector (incl. SOEs) September 2019 BA 26#27Status of cooperation between Ukraine and the IMF Key milestones February 2015: IMF staff Level Agreement on a US$ 17.5bn Extended Fund Facility Arrangement (900% of quota) 2nd largest IMF program in percentage of quota: compared to 2,159% of quota for the 2nd program in Greece or 422% for Egypt and 322% for Iraq With limited front-loading to incentivize reforms August 2015: Staff Level Agreement on 1st review under the EFF December 2015: IMF decision on the Status of Ukraine's Eurobond Held by the Russian Federation September 2016: Completion of the 2nd review under the EFF and approval of US$ 1bn Disbursement April 2017: Completion of the 3rd review of the EFF and disbursement of the 4th tranche of EFF support October 2018: Staff Level Agreement on the new 14-month Stand-By Arrangement (to replace current EFF program) for 139% of quota December 2018: Approval of the Stand-By Arrangement for a total program amount of US$ 3.9bn by the IMF Board of Directors Immediate disbursement of the first tranche totaling US$ 1.4bn Simultaneous cancelation of the arrangement under the EFF approved in March, 2015 September 2019: IMF mission is expected to visit Ukraine in order to discuss the following steps of cooperation Past IMF reviews under the EFF and SBA programs Availability date / Next reviews SDR m US$ m¹ EFF program 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 SBA program December 18, 2018 Total SBA program 1,000 1,391 1,000 1,391 Key achieved structural benchmarks and prior actions EFF: SBA: Establishment of the NABU Parliament approval of the new gas market law Adoption of a broad-based strategy to reform the SOE sector Launch of the electronic assets declarations New pension legislation New privatization framework Parliament approval of the law on ACC Parliamentary approval of 2019 State budget consistent with the IMF recommendations Source IMF, Ministry of Finance September 2019 Increase in household gas and heating tariffs Note 1 Past tranches translated at NBU XDR/US$ exchange rate as of the date of their receipt; expected tranches converted at XDR/US$ as of September 8, 2019 27 非#28September 2019 1. A story of recovery and renewal supported by reforms achievements 2. Reforms achievements: irreversible steps towards big changes 3. Fiscal consolidation supporting a prudent debt management strategy 4. Continuous support from economic partners Appendices Agenda BA 28#29Nominal GDP 2018 nominal GDP breakdown by sector US$ 2016 93bn 13% ■Trade ■Manufacturing ■ Agriculture Structure of Ukraine's economy 2018 nominal GDP breakdown by expenditures, US$ bn (11) 25 ■Transport 28 Government¹ 33% +20% 12% ■Real estate US$ 131bn Mining 10.1% 4% ■State administration and security 89 Households Education 4% 6% 6% 6.0% 6% ICT +17% ■ Other US$ 2017 112bn US$ 2018 131bn Comments Ukraine is gradually shifting from prevailing raw material production to a country with a dominating tertiary sector Agriculture and mining, the largest segments of Ukraine's primary sector, jointly reach for only 16% of 2018 GDP Trade, transport and real estate operations constitute the largest shares of Ukraine's tertiary sector at 13%, 6% and 6% of 2018 nominal GDP Highlights on population (average for 2018) 42.3m 17.9m 16.4m Source State Statistics Service of Ukraine Total population Economically active Employed September 2019 Consumption Note 1 incl. NPOS 131 Investments Net export GDP Employed population by sector (2018) ■Trade 18% 22% ■Agriculture ■Industry 6% 16.4m 6% 18% 6% 9% 15% Education Healthcare and social security Logistics State administration and security Other BA 29 20#30Environmental safety developments Directions of RES development in Ukraine Energy generation Construction of renewable energy facilities Construction of plants producing equipment for RES Biofuel production plants construction Growing energy crops 000 Key highlights Ukraine's strategy on renewable energy sector (RES) and energy saving is based on two core pillars: • National Renewables Action Plan aimed at reaching 11% share of RES in total electricity consumption by 2020 National Energy Efficiency Action Plan with a view toward reduction of final energy consumption by 9% Strong governmental incentive mechanism for RES development represented by one of the highest feed-in- tariffs in Europe The legislation stipulating replacement of FIT mechanism with an auction system was adopted by the Ukrainian Parliament in April 2019 International Renewable Energy Agency (IRENA) On February 2018, Ukraine became a member of IRENA. IRENA RES's installed capacity dynamics, MW 1 979 98 395 1 237 1 043 950 73 859 722 59 327 49 52 300 1 388 24 410 288 282 283 742 594 340 411 432 203 2012 2013 2014 2017 2018 2015 2016 ■PVP plants ■WPPs BPPS mini-HPPS Sources SAEE, NEURC WPP1 and SPP current feed-in tariffs, EUR/MWh 150 Energy saving Residential sector ☐ ☐ ☐ International Renewable Energy Agency Industry Public sector R Key benefits for Ukraine: Renewable projects financing by the Abu Dhabi Fund for Development (ADFD) under 1-2% for up to 20 years Legislation improvement "Green" investment attraction Additional guarantees to investors September 2019 Source NEURC Solar 102 68 99 58 Wind (>2 MW) Wind (>0.6 MW, <2 Wind (<0.6 MW) MW) Source NEURC Note 1 Depending on wind turbine capacity BA 30 30#31September 2019 Full anti-corruption infrastructure has being established National Anti-Corruption Policy Council June 2019: the Council with updated composition has been restarted by the President. Delegates of the World Bank, USAID, UNDP, OECD, and the EU obtained official status of observes Prevention ProZorro procurement system • Major accomplishments in 2018: 1.2m new tenders with US$ 19.7bn expected value of finalized deals The first stage of integration with MOH registry of medicines completed • 5 main priorities: Punishment Review of anti-corruption legislation Development of amendments to the Criminal Procedural Code of Ukraine Development of whistleblowers protection legislation Adoption of a new anti-corruption strategy Fulfillment of international commitments within cooperation with GRECO, OECD, UN Investigation National Anti-Corruption Bureau (NABU) Number of proceedings: 644 Specialized Anti-Corruption Prosecution Office Fully focused on corruption cases involving state officials Oversees the investigations conducted by NABU and presents allegations in the courts As of July 2019, 369 suspected officials were accused and 212 cases directed to the court August 2016 194 June 2017 • Improved system functionality National Agency on Corruption Prevention (NACP) August 2018 371 As of July 2019: >1.1m declarations submitted >12k special inspections on timeliness and accuracy of fillings carried out 872 full inspections of declarations conducted July 2019 751 Performance status as of July 2019: • 751 criminal proceedings under investigation with 133 persons officially notified of suspicion . 1,228 notifications on corruption • received from third parties Strong public accountability and trust Effective cooperation with foreign authorities High Anti-Corruption Court (HACC) June 2018: the Law on HACC adopted November 2018: 267 submitted and approved applications for positions in the HACC and its Appeals Chamber April 2019: 38 judges were approved to the HACC and its Appeal Chamber September 2019: HACC commenced its operations Sources: ProZorro, NACP, NABU, official website of the President of Ukraine BA 31#32December 2013 Notes: update Ukraine argues that the alleged contracts for the Russian bonds are void and unenforceable because of Russia's wanton threats and acts of political and military aggression towards Ukraine Key milestones 17 February 2016: The Law Debenture Trust Corporation plc, acting on behalf of the Russian Federation as the sole holder of purported Ukraine's US$ 3bn Eurobond, filed a lawsuit against Ukraine in the High Court of England and Wales seeking repayment of notes • Ukraine's position: the bond, sold on the eve of a 2014 revolution in Kiev, was induced by threats and acts of unlawful political, economic and military aggression from Moscow and was in any event void as being beyond Ukraine's capacity and/or the Minister's authority, amongst other reasons Russia's position: English courts should hear the case as a straight-forward default, and were not entitled to take such aggression into account 29 March 2017: the High Court issued a Summary Judgment decision in favour of the claimant . Ukraine appealed before the Court of Appeal of England and Wales 22-26 January 2018: Appeal hearing took place 14 September 2018: A final judgment has been rendered by the Court of Appeal that the case should go to a full trial on Ukraine's duress defence Details on Judgment (September 14, 2018) The first instance judge was wrong: • . to decline to permit Ukraine's defence of duress to proceed to trial; and to refuse to grant Ukraine a permanent stay of the proceedings if Ukraine's defence of duress could not be adjudicated by the English Court Ukraine has lost on the issues of capacity, authority, implied terms and countermeasures, as well as on the issue as to whether there are any other compelling reasons for the case to go to trial Ukraine has therefore succeeded in its appeal and the Summary Judgment has been set aside, subject to any appeal to the Supreme Court "It would be unjust to permit Law Debenture and Russia to proceed to seek to make good the contract claim without Ukraine being able to defend itself by raising its defence of duress at trial." The Law Debenture Trust Corporation p.l.c. v Ukraine, Approved Judgment, Court of Appeal of England and Wales September 14, 2018 September 2019 Source: Ministry of Finance 32 32#33Case description Maximum value of claims, Naftogaz US$ 44.3 bn US$ 126bn Maximum value of claims, Gazprom US$ 81.4 bn Historical victory for Ukraine: Stockholm Arbitration Key results of the Arbitration on gas supply contract Gazprom's claims 485 US$ per Contract gas price In Q2 2014 352 Value of the total claims of c.US$ 126bn tcm US$ per tcm 56 US$ bn Gazprom's take-or-pay (TOP) claims 0 US$ bn Tribunal's decision Gas price for Q2 2014 reduced ToP provisions declared invalid and the claims based on ToP provisions fully rejected US$ 2.6bn 52 bcm Minimum annual contract volume obligations 5 bcm Minimum annual contract volume obligations reduced to actual needs CADLR To pay for gas allegedly supplied to the Naftogaz will not pay CADLR temporarily occupied territories * for supplies to CADLR Compensation from Gazprom *Certain Areas of Donetsk and Luhansk Regions Key results of the Arbitration on gas transit contract Violation by Gazprom of its obligations for transit volumes amounting to 110 bcm per year • • Naftogaz awarded compensation from Gazprom of US$ 4.6bn Net US$ 2.6bn after set-off of the amounts owed between the parties in both cases Sources: Naftogaz, Naftogaz has initiated enforcement of the US$ 2.6bn award Freeze of Gazprom's assets in England and Wales1 Freeze of Gazprom's stakes in its Dutch subsidiaries Actions in Switzerland and the Netherlands Note 1 On 18 June 2018 English court granted a freezing order against Gazprom. On 13 September 2018, upon mutual consent of the parties, the freezing order was discharged by the court in exchange Naftogaz's 2017 Annual Report of written undertaking from Gazprom, as accepted by the court, not to dispose of or otherwise deal with or diminish the value of any of its shares in the Swiss company Nord Stream AG, save that Gazprom shall be permitted to deal with or dispose of or diminish the value of the shares in the ordinary and proper course of business. September 2019 33 33#34Thank you for your attention! MINISTRY OF FINANCE OF UKRAINE