China Road and Bridge Awarded Odessa-Mykolaiv Highway Project; China Continues to Invest in Ukraine, but Outside of Crimea

China Road and Bridge Construction Co. (CRBC) won a Ukrainian government tender for a new highway linking Odessa and Mykolaiv in southern Ukraine, with a second phase of the same project reportedly set to extend it to Kherson approximately 20 km from the Russian-controlled peninsula of Crimea.  Thus far, despite some initial signs of Beijing’s willingness to help fund and construct projects in Crimea (including early reports regarding the Kerch Bridge), Chinese companies have avoided entangling themselves in the controversy and sanctions-related issues associated with such activity.

The Odessa-Mykolaiv highway is approximately 200 km in length and is to be financed by a soft loan, reportedly provided by the Export-Import Bank of China. Ukranews reported that the project is part of the broader aim of building a modern, overland transport corridor linking Odessa on the Black Sea with Poland’s Gdansk on the Baltic Sea.  This is CRBC’s second successful tender in Ukraine in recent months.  The company will also be carrying out an estimated $400 million repair job of the Shuliavskyi Bridge in Kiev.

HKND, the little-known firm previously linked to the transoceanic canal project in Nicaragua, backed out of plans to construct a deepwater port in Crimea in 2016.  Instead, it appears that Chinese firms are, at present, limiting their business ties to the Western-recognized sovereign territory of Ukraine or Russia.

Xi Jinping’s visit last week to Moscow resulted in a slew of investment agreements, headlined by the $10 billion Russia-China RMB Cooperation Fund, which will provide financing to Russian firms that may have difficulty accessing the international financial system due to the impact of U.S. sanctions.  Notably, China is not among the 10 UN member states to have recognized Crimea.