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URN Exclusive: BlackRock Ukraine reconstruction fund seeks $500 million-$1 billion of 'catalytic capital'

Ukrainian President Volodymyr Zelensky talks with BlackRock CEO Larry Fink in December 2022. (Photo by Ukraine Presidency)

The BlackRock-coordinated Ukraine Development Fund (UDF) will seek between $500 million and $1 billion of "catalytic capital" as a step toward attracting $2 billion to $4 billion in commercial capital, a BlackRock spokesperson said.

The fund, which is being created pro-bono for the Ukrainian government by BlackRock's Financial Markets Advisory team with help from JPMorgan, McKinsey and others, would then deploy the money toward reconstruction projects after the fighting stops, Marc Bubeck, BlackRock's head of Corporate Communications for Continental Europe, told Ukraine Rebuild News.

"The UDF aims to raise USD 500mm-1bn of catalytic capital which is widely considered to be the most scalable approach," he said in an email exchange. The catalytic capital "absorbs risks from other investors, allowing for a better risk/return profile and for less risk-tolerant, commercial capital to invest in the vehicle."

Bubeck said the catalytic capital "will allow the UDF to mobilize an additional USD 2-4bn of commercial (institutional) capital over time in addition to further funds mobilized from other sources such as banks."

Some of the UDF figures given by the BlackRock spokesperson appear to be lower than numbers often repeated since BlackRock and the Ukrainian government outlined plans for the UDF at the Ukraine Recovery Conference in London in June. However, the numbers may not be directly comparable.

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