Odesa region is a coastal and border region of Ukraine, located in the far southwest of the country.
Odesa region:
- is the main maritime point of foreign trade of the country;
- serves international transit cargo and passenger flows, performs the most important transport and distribution functions at the national and international levels
- is one of the most promising seaside recreational areas;
- is an important region of intensive agriculture with a high share of irrigated agriculture and agricultural processing industry;
- is one of the centers of machine building, light and chemical industries.
Transportation and logistics
Ukraine has the most powerful port potential among all the countries of the Black Sea-Azov basin. There are 13 seaports on the coast of these two seas, 7 of which are located in Odesa region.
More than 70% of grain transshipment capacities (50 million tons per year) at specialized terminals are concentrated in the ports of Odesa region. There are 12 grain terminals in operation.
Almost 100% of Ukraine’s sea container lines are serviced by container terminals in the seaports of Odesa, Chornomorsk and Pivdennyi.
In 2024, Ukraine’s seaports handled over 90 million tons of cargo, which is twice as much as in 2023. A significant share of this cargo turnover is agricultural products
Rail and road transport have become a reliable alternative to sea deliveries. The possibility of full-fledged operation of the Danube ports of Reni, Izmail, and Ust-Dunaisk (Kiliya port) has become a priority.
In addition, a significant increase in investment activity in these ports should be noted.
In 2023, 23 new transshipment points were opened in the Danube ports, and another 15 investment projects are currently being implemented in the ports of Izmail and Reni.
In parallel, other logistics projects are being developed, including road and rail connections on other borders with Moldova and Romania.
There are a number of projects in this sector, including the concession of container terminals and the development of a rail ferry complex at the Black Sea Commercial Sea Port.
Tourism, hotel and restaurant business
The region has extraordinary resources for the development of tourism and recreation.
It is clear that the tourism industry suffered perhaps the greatest losses due to the war. In 2023, the situation stabilized somewhat. At the end of the summer, some beaches in Odesa were opened for vacationers. Domestic tourism gradually began to recover.
Despite all the threats, the construction and development sector is growing rapidly. This is one of the priority industries in line with the smart specialization of Odesa region.
Industry
The main industries of Odesa region are machine building and metalworking, fuel industry, chemical and petrochemical industry, medical industry, light industry, and food industry.
Before the war, the region was a leader in the industrial production index and was among the top five regions in the country. There was a steady increase in the volume of industrial products sold.
There are also 4 registered industrial parks in the region, whose functional purpose is mainly aimed at processing agricultural products and logistics.
Promising industries: R&D centers, light industry, mechanical engineering, construction materials production.
Agriculture
Odesa region traditionally has high performance in the agricultural sector: it accounts for more than 30% of juice production in Ukraine, 25% of the country’s oil production capacity, 18% of unrefined oil production, and more than 70% of the country’s wine production potential.
Priority is given to the development of vegetable growing and horticulture, and to stimulating the creation of fruit and vegetable processing enterprises. The region has fertile land for this purpose, but it is necessary to reconstruct and modernize reclamation irrigation systems.
The agricultural sector, as the main component of the primary sector, remains attractive to domestic and foreign investors even during the war: capital investments in this sector decreased by only 5% after the start of the full-scale invasion. To create additional conditions for the development of the primary sector, attention should be focused on the development of land reclamation, in particular irrigation systems, as well as the development of its own processing industry (in the secondary sector).
The structure of agriculture in Odesa region is dominated by crop production (88.2%), which tends to grow. Crop production is dominated by grain production (66%), which is experiencing certain difficulties due to problems with further sales in the war.
Viticulture should be highlighted separately, as its share in the region is the highest (60% of all vineyards in Ukraine).
Sheep breeding is a traditional agricultural sector in Odesa region, which ranks first among the country’s regions with a share of 32.7% in 2021.
The seaside location favors the development of fisheries: aquaculture and sturgeon farming. However, the Russian invasion has blocked commercial fishing in the Azov and Black Seas, leading to significant losses in the industry.
Renewable energy
The geographical location of the region is favorable for the development of renewable energy sources. The largest number of solar power plants is concentrated in the Southern microregion due to favorable climatic conditions
Despite the difficult period caused by the military aggression of the Russian Federation against Ukraine, the second stage of the Dniester wind farm with a capacity of 60.1 MW was launched in May 2023.
Prospects: installation of solar/wind power plants, biogas/biomethane production, green hydrogen
Development of a network of heat and power facilities that produce heat from alternative fuels (wood fuel/coal, fuel from agricultural waste – pellets or briquettes, etc.), which will reduce the burden on budgets of various levels.
Odesa region has the potential to develop oil and gas fields. Restoring the Odesa-Brody oil pipeline and connecting it to Adamovo (Poland) could ensure its effective use for transporting gas from the Caspian region to the EU. The construction of an LNG terminal should be a priority for the development of the region’s energy sector, using its geographical potential in the period of post-war reconstruction.
Healthcare and rehabilitation
After the full-scale invasion of Ukraine by the Russian Federation, the health and social support sector, as well as related sub-sectors, were reviewed and updated, including in light of new wartime challenges.
In this aspect, the issue of restoring both physical and mental health of the population is urgent. The combination of the unique natural potential of the Odesa region with the existing network of healthcare facilities creates the basis for the development of rehabilitation centers for veterans, people with physical/sensory/mental/intellectual/psychological disabilities, the wounded, etc. Thus, rehabilitation has been identified as one of the areas of smart specialization in Odesa Oblast.
Odesa Regional State Administration
For reference:
As of September 30, 2024, according to the National Bank of Ukraine, the volume of foreign direct investment in the economy of Odesa region increased by 16.4% compared to December 31, 2023, reaching USD 1.67 billion.
In terms of foreign direct investment, the region ranked 5th (as of December 31, 2023 – 6th) among other regions of the country and is the leader in terms of foreign direct investment growth.
The largest volumes of foreign direct investment were in the following areas of activity:
- transportation, warehousing, postal and courier activities – USD 446.9 million (share in the total amount of 38.7%)
- information and telecommunications – USD 290.6 million (25.2%);
- industry – USD 200.3 million (17.3%);
- real estate transactions – USD 70.1 million (6.1%);
- financial and insurance activities – USD 38.7 million (3.4%).
The following areas drove the growth of foreign direct investment in January-September 2024:
- Information and telecommunications – a 36.3-fold increase in foreign direct investment;
- professional, scientific and technical activities – increase in investment by 29.9%;
- real estate transactions – increase in investment by 27.7%.
The list of key investor countries, which account for 89.5% of total foreign direct investment, includes: Cyprus, the Netherlands, Singapore, the United Kingdom, Luxembourg, Monaco, and France.
The share of equity capital of non-residents from the EU countries amounted to 72.1% (USD 833.0 million), which is 52.4% or USD 286.6 million more than as of 12/31/2023. As of September 30, 2024, a new investor country was recorded – Estonia, with foreign direct investment amounting to USD 16.3 million.
Last year, positive dynamics was also observed in the field of attracting capital investments.
In 2024, enterprises and organizations of the region utilized UAH 14391.1 million from all sources of financing, which is 49.6% more than in 2023, which is 8th place among other regions of the country (in 2023, the region ranked 9th).
