Energy Minister Herman Haluschenko said Ukraine would need to import at least 1 bcm of natural gas in 2025, with final import volumes to depend on Russian attacks on the energy system. He said such imports could be partially financed using a EUR 200m revolving credit line opened by the EBRD for Naftogaz or attracting new grants. Physical gas volumes could potentially be also provided as in-kind aid. On a related note, the minister noted that Ukraine had not received any proposals from the EU about restarting Russian gas transit.

Vodafone Ukraine (VFU), Ukraine’s second largest mobile operator, has announced that holders of its $400m 2025 notes maturing on Feb. 11 supported the company’s restructuring proposal.

Ferrexpo reported in a market update that its subsidiary Poltava Mine and its CEO have received a civil claim for UAH 157bn ($3.6bn) in favor of the Ukrainian state following the completion of a pre-trial investigation by Ukraine’s National Police into alleged sales of waste products from the production of iron ore pellets between 2015 and 2021. The case was sent to a first-instance court for further proceedings. According to Ferrexpo, the initial accusations about the illegal sale of waste products have been reclassified into charges of illegal mining and selling of waste products that caused damage to the environment. The company said its operations remained unaffected, the accusations were without merit, and it would defend its position in court.

Interpipe has completed a tender offer for its $300m notes due in May 2026, accepting $25.4m worth of principal for buyback and thereby reducing the outstanding amount to $274.6m. Settlement is expected as early as today.

US President Donald Trump said yesterday he was looking to negotiate an agreement with Ukraine to tap its rare earth deposits as compensation of US support for the country. “We’re looking to do a deal with Ukraine where they’re going to secure what we’re giving them with their rare earth and other things … and they’re willing to do it,” Trump said. Commenting on the prospective US-led talks to end Russia’s war in Ukraine, Trump said, without elaborating, “We made a lot of progress on Russia, Ukraine … We’ll see what happens. We’re going to stop that ridiculous war.” On a related note, Ukrainian media reported that Trump’s envoy for Ukraine and Russia Keith Kellogg would travel to Ukraine next week, tentatively after Feb. 11, to meet with President Volodymyr Zelensky before heading to the Munich Security Conference scheduled for Feb. 14-16. Lastly, according to Reuters, the Trump administration ordered over the weekend to resume shipments of weapons to Ukraine that had been authorized by Joe Biden in his final weeks in office, reversing its initial assessment that all aid to the country should be suspended for the time being.

According to minutes from the latest meeting of the NBU Monetary Policy Committee (MPC), which preceded the NBU Board’s rate meeting on Jan. 23, all committee members argued for increasing the key rate. Seven out of 11 MPC members voted for a 100bp hike, to 14.5%, which the NBU Board subsequently approved, three members supported a 50bp hike, and one argued for a sharper 150bp increase.

Key highlights from last week: The intensity of Russian ground assaults dropped to the lowest level in a half-year last week, with Russian territorial gains also continuing to slow: down to 330 km2 in January from a high of more than 700 km2 in November and the smallest advance since August 2024. Russian missile attacks remain relatively small in scale. US officials continue to pre-announce quick peace talks, but still with little substance and much uncertainty.

Ukraine’s headline current account (C/A) ran a $0.5bn surplus in December, narrowing from $0.8bn in November and c. $2bn in October-September, thus bringing the 2024 deficit to $13.4bn, up from a gap of $9.6bn in 2023. The financial and capital account (F/A) surplus, including IMF funds, stood at $3.5bn in December, down from +$4.4bn in November and bringing the full-year surplus to $16.3bn, down from $21.0bn in 2023. Thus, the total external balance narrowed to +$2.9bn in 2024 from +$11.4bn in 2023.

Baseload day-ahead (DAHD) electricity prices in Ukraine averaged UAH 5,548 (EUR 128)/MWh in January, flat m-o-m and up 65% y-o-y. The average bilateral baseload price on the Ukrainian Energy Exchange (UEEX) for January supplies rose by 5.3% m-o-m to UAH 5,327/MWh (+42% y-o-y), or 4.0% lower than the day-ahead price. February baseload electricity supplies on the UEEX are currently priced 1.6% higher at UAH 5,414/MWh (+74% y-o-y).

According to Agriculture Minister Vitalii Koval, Ukrainian farmers harvested 76 Mt of grain and oilseed crops in 2024 (-7% y-o-y). The Agriculture Ministry also reported its first 2025 harvest estimate, projecting a total crop of up to 80 Mt, up 5% y-o-y on higher winter wheat and corn production. In related news, Ukraine exported 3.1 Mt of grain in the first 28 days of January, including 2.3 Mt of corn and 0.8 Mt of wheat.

News: The acting CEO of Naftogaz, Roman Chumak, has confirmed that the company started importing gas from Europe. (Company)

Ukraine’s producer price index (PPI) rose by 27.6% y-o-y e-o-p in 2024, accelerating from 16% y-o-y in 2023 but remaining lower than 38% in 2022 and 62% in 2021.

Ukrainian forces have sharply intensified attacks with long-range drones on infrastructural targets in Russia in January, with three mass strikes, each involving over 100 drones, reported thus far this month. The latest attack on Jan. 29 reportedly hit Lukoil’s refinery in Nizhniy Novgorod, around 800 km from the Ukrainian border, and an oil pumping station in Tver region, some 500 km away. Ukrainian strikes earlier this month hit Rosneft’s Ryazan oil refinery, at least two other refineries, multiple fuel storage sites, and several industrial targets including a microelectronics plant in Bryansk, one of the largest in Russia.

The Ministry of Finance placed UAH 5.5bn ($132m) of hryvnia-denominated bonds at a primary auction yesterday.

WSE-listed Kernel Holding, Ukraine’s largest sunflower oil producer and grain exporter, announced that Namsen Limited, directly controlled by Kernel’s founder and Chairman of the Board Andrii Verevskyi, acquired on Jan. 27 a total of 2,032,127 Kernel shares at an average price of EUR 3.93 (PLN 16.56) per share.

Ukraine’s direct and guaranteed public debt stood at $166bn as of end-2024, up 3.9% m-o-m and 14% y-o-y (+$21bn), equivalent to an est. 91.3% of 2024E GDP, up from 83% in 2023 and 78% in 2022.