Ukraine Latest: Power Cuts Threaten Capital; Musk Shifts Course

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(Bloomberg) --

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Russian forces caused “serious damage” to an electrical installation near Kyiv on Saturday, grid operator Ukrenegro said, with emergency blackouts possible even after power was restored.

Residents in the Kyiv area and in neighboring regions were urged to immediately cut their electricity use. “If we don’t follow this advice, we will have to take out the candles and suffer all the consequences,” said Kyrylo Tymoshenko, deputy head of Ukraine’s presidential administration.

Ukraine’s battlefield effort got a potential boost when Elon Musk said he’d keep providing SpaceX’s Starlink satellite-based internet service “for free.” South Korea’s central bank head called on China to persuade Russia to end the war.

(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)

Key Developments

  • Russia Failed to Swap Out Western Military Parts: 2021 Audit

  • Ukraine IT Sector Tested as Putin Bombs Civilian Infrastructure

  • Saudi Arabia Announces $400M in Aid to Ukraine

  • Putin Says Has No Regrets About Ukraine Invasion After Reverses

  • Musk Tweets Complicate US Diplomacy From Ukraine to Taiwan

  • Canada Wants ‘Arsonist’ Russia to Be Barred From IMF and G-20

On the Ground

Russian forces launched missiles at the Kyiv region again overnight, with damage reported to energy systems. Kamikaze drone attacks also took place in the Dnipro regions and Zaporizhzhia regions. Ukraine’s military estimates Russian still has about 300 Iranian-made drones with plans “to buy several thousand more.” A large number of wounded people are being admitted to medical facilities in the regions annexed by Russia last month after a vote called illegal by the UN. Several people were wounded by Russian shelling in the Nikopol region in southern Ukraine that a regional administrator said were designed to cause “maximum damage to civilians.”

(All times CET)

Musk Signals He’s Backing Off Starlink Threat (8:42 p.m.)

Elon Musk said Saturday he’d continue to fund Starlink satellites in Ukraine “for free” after a standoff with the US Defense Department over the cost of their deployment.

Musk threatened a day earlier to cut financial support for SpaceX’s satellite internet service in Ukraine, claiming that the operation had cost his company $80 million so far. The Pentagon said it was in talks with SpaceX, while saying the US is looking at other options.

S. Korean Central Banker Calls on China’s Help to End War (5:30 p.m.)

Bank of Korea Governor Rhee Chang-yong urged Beijing to take on a more active role in trying to end the Russian war in Ukraine and calm the world’s geopolitical situation.

“I really hope that China can play a very important role,” Rhee said in Washington on Saturday. “I really hope that my old friends in China can step up efforts to stop the Russian war.”

If any country can talk to Russian President Vladimir Putin, it’s China, he said, adding that Beijing can be a “bridge between Russia and the West” and help its own relations with Washington in the process.

More Ships Sail With Ukrainian Farm Products (5:25 p.m.)

Another seven vessels with a total of 101,000 tons of agriculture products left Ukraine’s Odesa-area ports on Saturday for destinations in Asia and Europe, Ukraine’s infrastructure ministry said on Facebook.

Since the safe-transit agreement was reached with Russia in late July, 7.5 million tns of grains and other farm products have departed on 341 ships, the ministry said.

Fire at Oil Depot in Russia’s Belgorod (5 p.m.)

A major fire at an oil depot near the Russian city of Belgorod was caused by a second day of Ukrainian cross-border shelling, the region’s governor said.

Social media posts showed black smoke billowing in the area. Belgorod is about 60 miles north of the Ukrainian border. Ukraine hasn’t commented.

Poland Says Oil Flows Resume on Druzhba Pipeline (4:14 p.m.)

Oil flows via the northern leg of the Druzhba pipeline, which supplies, Germany and Poland with Russian crude oil, resumed in full on Saturday after an accident earlier in the week, according to Poland’s pipeline operator PERN.

Poland early ruled out third-party involvement in the incident, at a time Europe is on high alert about potential sabotage to infrastructure.

Ukraine Expects Red Cross Officials in East on Monday (1:57 p.m.)

Ukraine expects representatives of International Committee of the Red Cross to reach the “contact line” in the country’s east on Monday, Andriy Yermak, head of Ukraine’s Office of the President, said on a video call with new ICRC President Mirjana Spoljaric Egger.

Yermak urged Egger, who took up her post this month, to do everything possible to send the ICRC mission to the penal colony in Olenivka in the Donetsk region and to have access to prisoners of war. “This is my priority,” Egger said on the call, according to a post on the presidential website.

In late July, more than 50 Ukrainian POWs were killed in shelling at the prison that Ukraine has blamed on Russia. Moscow has said Kyiv was responsible for the attack.

First Russian Troops Arrive in Belarus for Joint Force (11:22 a.m.)

Russian forces have started arriving in Belarus to man the new joint force with troops there, the defense ministry in Minsk said on Saturday.

“The first convoys of Russian servicemen from the regional force group have arrived in Belarus,” the ministry said, saying their mission was to “strengthen the protection and defence of the border.”

Belarusian President Alexander Lukashenko said Monday that he and Russia’s president had agreed to deploy a regional grouping of forces. Moscow launched its failed push toward Kyiv in February from Belarusian territory. Observers this week have cited the movement of Belarusian military equipment to Russia, potentially to shore up dwindling supplies.

Grid Operator Reports Russian Strike on Kyiv Region (9:10 a.m.)

Russian forces struck “critical” energy infrastructure in the Kyiv region, causing “severe destruction,” the grid operator Ukrenergo said on Facebook. Repairs are under way.

Ukrenegro warned of potential emergency shutdowns and asked consumers to use power sparingly. “Such measures give our specialists the opportunity to stabilize the situation as soon as possible and carry out the necessary restorative work,” it said.

The strike comes after Russian President Vladimir Putin said on Friday that seven of 29 of sites targeted in a mass bombing of Ukraine earlier in the week “were not damaged as planned by the Defence Ministry,” and that “the attacks will be renewed.”

Russian Reservists Buy Own Body Armor at Inflated Prices, UK Says (8 a.m.)

Many newly-mobilized Russian reservists have been deployed to Ukraine this month with personal equipment “almost certainly lower than the already poor provision of previously deployed troops,” the UK defence ministry said.

Many reservists are likely being required to buy their own body armor including 6B45 vests, which are currently selling online in Russia for 40,000 rubles ($640), up from about 12,000 rubles in April, the UK said on Twitter.

Russian authorities in 2020 announced that 300,000 sets of the armor had been supplied to the Russian military, the UK said, suggesting much of the equipment has since gone astray.

Canada Wants ‘Arsonist’ Russia Banned From IMF, G-20 (6 a.m.)

Canada is pushing for Russia to be shunned from the international community entirely over its invasion of Ukraine, now approaching the eight-month mark.

Finance Minister and Deputy Prime Minister Chrystia Freeland didn’t hold back on her opposition to Russian officials being at the International Monetary Fund and World Bank meetings this week.

“The IMF and World Bank meetings are meetings of the firefighters -- of ministers and central bank governors, whose jobs is to protect the global economy,” Freeland, who’s of Ukrainian heritage, said Friday. “Russia right now is the arsonist. Russia shouldn’t have been at the IMF meetings. Arsonists have no place in meetings of the firefighters.”

Russia Failed to End Reliance on Western Parts, Audit Shows (3:20 a.m.)

Even before sanctions cut off access to vital components and technologies for Putin’s defense industry, an internal Russian government review found years of attempts to reduce reliance on imports had largely failed.

Previously unreported assessments show a program with specific targets was put in place from 2019 to slash Russia’s dependence on Western parts for its arsenal by 2025 — everything from radar to advanced submarines to anti-missile defense systems. But an internal review of the plan 10 months before Putin invaded Ukraine found it was falling short on almost every metric.

Read more: Russia Failed to Swap Out Western Military Parts: 2021 Audit

Zelenskiy Speaks to Saudi Crown Prince (5 a.m.)

Ukrainian President Ukrainian President Volodymyr Zelenskiy said he had spoken to Mohammed bin Salman, the crown prince of Saudi Arabia, and expressed gratitude for his support of “Ukraine’s territorial integrity.”

Following Zelenskiy’s reference to “macro-financial aid,” the Saudi Press Agency reported that Riyadh will give $400 million in humanitarian aid to Ukraine.

US to Give Another $725 Million in Security Aid (2:55 a.m.)

The Biden administration on Friday announced $725 million in additional security aid for Ukraine. The package includes more ammunition for the HIMARS long-range artillery systems, which Ukraine has credited with helping its military counteroffensive in the east and south of the country by striking deep behind Russian lines.

“In the wake of Russia’s brutal missile attacks on civilians across Ukraine, the mounting evidence of atrocities by Russia’s forces, and the firm and unequivocal rejection by 143 nations at the United Nations of Russia’s illegal attempted annexation of parts of Ukraine, the United States is offering additional military assistance to help Ukraine’s proud defenders protect their country,” Secretary of State Antony Blinken said in a statement.

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