THE INVESTMENT PROJECT: « HOUSING PROVISION ON THE MORTGAGE LENDING OR FINANCIAL LEASING CONDITIONS » (NEW REVISION) July, 2017
THE PROJECT’S GOAL and FINANCING THE PROJECT’S GOAL : raising loan funds to provide housing for Ukrainian citizens on the mortgage lending and financial leasing conditions THE PROJECT’S FINANCING : 500 million US dollars - of loan funds secured by the State Guarantee envisaged by the State Budget for 2017 1 USD = 29,3 UAH according to the predictable rate of the Cabinet of Ministers of Ukraine budgetary policy for 2018-2020 2
THE PROJECT’S OBJECTIVES STRENGTHENING THE POLITICAL SITUATION AND IMPLEMENTING THE SUSTAINABLE DEVELOPMENT STRATEGY « UKRAINE - 2020» STABILIZING THE CONDITION OF THE FINANCIAL SECTOR OF UKRAINE RENEWING AND UPGRADING THE MORTGAGE LENDING MARKET CREATING WELL-ORGANIZED FINANCIAL LEASING MARKET CREATING ADDITIONAL EMPLOYMENT OPPORTUNITIES AND IMPROVING THE SOCIAL SECTOR REDUCING THE ACCOMMODATION WAITING LIST BY 30,6 thousand OF UKRAINIAN FAMILIES 3
THE COST AND PREDICTABLE RESULTS THE PROJECT PROVIDES FOR: financing of 1,4 million m 2 of housing construction in the total amount of 20,7 billion UAH ( taking into account the Project’s reinvestment means ) supplying 30,6 thousand of Ukrainian families with the purchased apartments on the mortgage lending and financial leasing conditions (without the down payment) at the rate of 15,3% per annum Apt. total useful floor area Number of apartments, Total floor area of a Apartment cost, taken in calculations, m 2 building apartment, m 2 psc. in thousands of UAH 1-BEDROOM APT. 40 17 249 689 975 9 927 360 2- BEDROOM APT. 55 12 545 689 975 9 927 360 3 – BEDROOM APT. 70 822 57 498 827 280 TOTAL 30 616 1 437 448 20 682 000 The predicted average housing cost within Ukraine (including the equipment) - 1 m 2 = 14,4 thousand UAH 4
THE BUDGET EFFECT THE PROJECT DOES NOT INVOLVE THE USE OF THE BUDGETARY FUNDS * THE PROJECT’S BUDGET EFFECT is 15 556,3 million UAH ( for 15 YEARS) 3 517,1 THE INCOME TAX, 18% 12 016,9 THE DIVIDENDS, 75% OF THE NET PROFIT THE UNIFIED SOCIAL TAX, 22% FROM THE 9,2 SALARY THE FEE FOR THE STATE GUARANTEE 13,1 GRANTING * it is not foreseen to use the budgetary funds - to compensate the interest rates amounts on a foreign loan to the SMI; to grant the budgetary funds on a free-of-charge basis; the budgetary subsidies related to the supply of the Project’s mortgage lending and financial leasing rates, etc. 5
THE PROJECT EFFECTIVENESS Indicator Calculated values Reference values according to the Ministry of Economic Development and Trade of THE ECONOMIC EFFECTIVENESS INDICATORS Ukraine requirements (PREDICTED AND PEER) NET PRESENT VALUE – NPV, IN 4 099 586,7 ≥ 0 THOUSANDS OF UAH ≤ of the Project term 9,3 years PAYBACK PERIOD - PB (15 years) 6,21% DISCOUNTING RATE, % ≤ of the Project term (15 DISCOUNTING PAYBACK years) or similar 12,5 years PERIOD - DPР projects payback period 1,162 PROFITABILITY INDEX – PI ≥ 1 INTERNAL PAYBACK RATE - IRR, 10,32% ≥ discounting rate % THE INVESTMENT PROJECT PAYBACK SCHEDULE (NPV), in thousands of UAH The predicted efficiency calculations assume that the housing sale (according to the citizens’ choice) is carried out on the financial leasing conditions. When citizens picking out the mortgage lending, the Project’s indicators will get significantly improved due to the receipt of advanced payments (the down payment should be not less than 25% of housing cost) in the amount of 5,17 billion UAN
DIRECTIONS FOR CREDIT USE THE PROJECT PROVIDES FOR THE FOLLOWING DIRECTIONS: ” THE HOUSING PURCHASE ” - implies acquisition of ownership on ready-built housing or property rights on housing with the high level of construction readiness, getting finishing works done in the apartments and installing the equipment ” THE HOUSING CONSTRUCTION FINANCING " – implies financing of “turn - key” housing construction-in-progress The implementation of the Project’s directions is held according with the citizens applications who are in need of housing on mortgage lending or financial leasing conditions based on the results of competitive selections of housing delivery projects. 7
THE SCHEMATIC ILLUSTRATION OF THE PROJECT’S IMPLEMENTATION 1 2 THE PROJECT’S CREDITOR SELECTION PROVIDING THE STATEGUARANTEE ON THE SMI EXTERNAL BORROWINS THE STATE GUARANTEE ON THE SMI LOAN THE MORTGAGE LOAN AN OPEN CONTEST THE LOAN SECURITY THE MORTGAGE LOAN SECURITY THE CABINET OF MINISTERS OF UKRAINE (THE MINISTRY OF FINANCIAL FINANCE OF UKRAINE) COMPANIES ФІНАНСОВІ УСТАНОВИ 4 3 STATE ( НБУ , THE HOUSING DELIVERY PROJECTS THE NEED IN SELECTION українські та HOUSING (THE HOUSING CONSTRUCTION) THE REQUESTS OF THE іноземні MORTGAGE HOUSING NEED інвестори ) (AS WELL AS DETERMINING THE FINANCIAL AND MORTGAGE MECHANISMS FOR OBTAINING THE HOUSING DELIVERY HOUSING) INSTITUTION ELECTRONIC AGREEMENTS (PURCHASE/SALE AUCTIONS – COMPETITIVE THE AGREEMENTS, INVESTMENT THE SELECTION GOVERNMENTAL CONTRACTS.ETC.) THE ORDERING (PROZORO,ETC) HOUSING AUTHORITIES, CUSTOMERS (REAL ESTATE STATE ENTERPRISES MARKET THE RESULTS OF THE HOUSING PURCHASE (THE LOAN BORROWER, THE BUYER, THE INVESTOR, THE HOUSIG THE ORDERING NKS AND NON-BANKING FINANCIAL INSTITUTIONS, THE HOUSING MARKET PARTICIPANTS OWNER) CUSTOMERS (REAL ESTATE DEVELOPERS) 5 6 LEASING OR LOAN SERVICING - I PHASE – THE HOUSING PURCHASE OR THE HOUSING PROVISION THE LEASE PAYMENTS OR БАНКИ - ПАРТНЕРИ - II PHASE – THE HOUSING CONSTRUCTION FINANCING THE LOAN PAYMENTS - « MULTIPLICATIVE EFFECT » - THE HOUSING PURCHASE ( Укргазбанк , THE AUTHORIZED BANK Укрексімбанк та ін . ) THE HOUSING STATUS 100% THE REAL INFORMATION FINANCING (THE STATE-OWNED BANK ) ESTATE DEVELOPERS (THE WINNERS OF THE THE LOAN (LEASE) ENSURING THE HOUSING DELIVERY PAYMENTS AS WELL AS HOUSING DELIVERY OBLIGATIONS FULLFILLMENT HOUSING AND UTILITY CONTESTS) OAYMENTS 15,3% PER COMING INTO ANNUM AGREEMENTS THE CONSTRUCTION,THE “TURN KEY” HOUSING EQUIPMENT THE HOUSING DELIVERY THE HOUSING TRANSFER INTO LINANCIAL LEASING OR MORTGAGE THE GOVERNMENT EMPLOYEES - THE MORTGAGE LENDING LENDING CITIZENS OF UKRAINE - THE FINANCIAL LEASING 8
THE HOUSING REQUIREMENTS There are taken into account the Ministry of Regional Development requirements for the 1 m 2 cost the amount of the predictable average annual indicator of the indirect cost of housing construction in the regions of Ukraine for 2017 (the order N102 of 03.05.2017) the requirements for the internal finishing works List (the Ministry of Regional Development order № 2 of 11.01.2014) the Ministry of Regional Development recommendations on the need to increase the indicators of the indirect cost of housing construction by the regions on the expenses that were not taken into account for the indirect cost (the letter of 01.11.2016 № 7 / 17-13302) 9
THE MARGINAL COST RATE THE MARGINAL cost of 1 m 2 of the Project’s housing The marginal cost of 1 m 2 used in the Project’s equivalent in indicators calculations is on average within Ukraine UAH USD Ukraine 1 14 388 491 at the level of 14 388 UAH or 493 USD per 1 m 2 1. Vinnytsia Oblast 14 047 479 according to the predicted rate fixed by the 2. Volyn Oblast 14 014 478 Cabinet of Ministers of Ukraine in account that 1 3. Dnipropetrovsk Oblast 14 110 482 4. Donetsk Oblast 15 038 513 USD = 29,3 UAH including throughout Ukraine 5. Zhytomyr Oblast 13 051 445 6. Zakarpattia Oblast 12 934 441 7. Zaporizhia Oblast 14 093 481 8. Ivano-Frankivsk Oblast 13 289 454 9. Kyiv Oblast 14 447 493 10. Kirovohrad Oblast 12 754 435 11. Luhansk Oblast 13 988 477 12. Lviv Oblast 14 378 491 The marginal cost of 1 m 2 is calculated taking into 13. Mykolaiv Oblast 14 390 491 account the predicted by the Ministry of Regional 14. Odessa Oblast 13 990 477 15. Poltava Oblast 13 211 451 Development of Ukraine indicator of indirect housing 16. Rivne Oblast 14 307 488 construction cost throughout Ukraine for 2017 and 17. Sumy Oblast 13 729 469 increased on the expenses associated with the 18. Ternopil Oblast 13 729 469 construction site preparation, the external engineering 19. Kharkiv Oblast 15 034 513 networks construction, payments for the social, 20. Kherson Oblast 13 420 458 transportation and engineering infrastructures 21. Khmelnytskyi Oblast 14 041 479 development as well as the expenses related to the 22. Cherkasy Oblast 14 278 487 23. Chernivtsi Oblast internal finishing works, all necessary equipment purchase 13 592 464 24. Chernihivska Oblast 14 392 491 and installation. 25. Kyiv 16 406 560 1- the cost used in the Project’s calculations 10
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