Conference organizer: Kyiv School of Economics
Topics covered: Advice from international finance institutions and European Commission officials on how companies can receive money from the European Union's €50 billion Ukraine Facility.
Speakers Transcribed:
Wendy De Luca, head of the Good Governance Fund Ukraine and UK Foreign, Commonwealth and Development Office
Summary: Ms De Luca said the lack of a centralized database of investment-ready companies has complicated the investment landscape in Ukraine. To address this, a new portal, integrated with the EU's Ukraine Investment Framework, offers a one-stop shop for investors to explore projects, filter by sector, region, and financing type, and provides detailed insights and statistics.
The portal currently lists 95 projects with an investment potential of $27 billion across eight critical sectors in 24 regions of Ukraine, she said.
Pierre-Arnaud Proux, European Commission, Deputy Head of Inter-Institutional, Coordination of Relief and Reconstruction Unit, Ukraine Service
Summary: Mr Proux focused on the Ukraine Investment Framework, a tool to mobilize both public and private investment in Ukraine. The framework, part of the Ukraine Facility allocates €7.8 billion in guarantees and €1.5 billion in grants, with €9.3 million already available.
Implementing partners include international financial institutions like EIB and IFC, and national ones. The framework prioritizes sectors like human capital, energy, and digital transition, with €1.4 billion in instruments already signed. The next phase involves a call for proposals and further engagement with EU member states.
Irina Kravchenko, EBRD deputy head for Ukraine
Ms Kravchenko highlighted the EBRD's investment in Ukraine, with annual contributions of around €1.5 billion, and a total of €4.6 billion since the war began. She said both public and private sectors are receiving nearly equal support, with a focus on key areas like SMEs, energy efficiency, and aid for veterans and war victims.
She described how the EBRD's investment products have evolved to meet market demands, including new portfolio guarantees, risk-sharing products, and a special window for veterans and war victims.
Handouts and Other Assets Mentioned:
Wendy De Luca Transcript
"You know too well that Ukraine's economy is operating under immense pressure as the war continues. Enterprises and SMEs face disrupted supply chains, a shrinking domestic market, and limited access to finance. Despite this, businesses are still the backbone of Ukraine's economic growth and recovery.
I'm happy to say that, despite all the challenges, Kyiv School of Economics data shows that international investment in Ukraine is rising, indicating the growing confidence in Ukraine's potential. However, the lack of a centralized database of investment-ready companies has posed a challenge for investors.
The Ukraine Investment Framework, an integral part of the Ukraine Facility Program, is set to greatly boost this trend, attracting more investments. This will enable Ukrainian businesses to expand, driving both recovery and growth.
However, we must acknowledge a critical challenge. When large international businesses seek to invest in Ukrainian companies, their standards may mean that insufficient reporting and low risk assessment make some enterprises unfundable. Despite this, there are indeed many investment-attractive companies in Ukraine. The challenge lies in identifying them, which can be time-consuming and costly for large businesses and investment funds.
There is currently no centralized database of ready-to-invest companies in Ukraine, further complicating the investment landscape. However, I am delighted to introduce today a new innovation designed to help: the Ukrainian Investment Portal, developed in collaboration with the Ministry of Economy and the Kyiv School of Economics.
This platform is designed to make investing in Ukraine easier and more appealing, offering a one-stop shop to explore the many opportunities. It is a digital database of projects eligible for financing under the first phase of the Ukraine Investment Framework, making it accessible to potential investors and IFIs.
For investors, the portal will be a game-changer, as it simplifies the search for promising projects. It allows users to filter by sector, region, and financing type. Investors gain access to detailed insights and statistics, making it easier to identify ventures that align with their goals.
Additionally, the portal provides clear economic reasons to invest in Ukraine, showcasing the potential of critical industries and the overall economic landscape. A significant feature of the portal is its integration with the EU's Ukraine Investment Framework, part of the Ukraine Facility Program, which brings €9.3 billion in potential funding.
Currently, the portal lists 95 projects with an investment potential of $27 billion, covering eight critical sectors across 24 regions of Ukraine. The portal offers Ukrainian businesses a unique opportunity to present their projects to a global audience of investors, increasing their visibility and access to international funding.
The portal will boost regional businesses, fostering balanced regional growth and contributing to a more resilient national economy. By offering transparency, ease of access, and comprehensive information, the Ukrainian Investment Portal makes it far easier for investors to connect with Ukrainian businesses, driving financial returns and the country's economic recovery and regional growth.
The UK is proud to support this work, and I want to thank all the government fund partners who’ve worked so very hard together to create it. Your feedback when you're using the platform will be much appreciated to ensure that it meets users' needs.
Good luck to all involved, and I look forward to hearing about many successful investments that will surely come through this portal. Thank you all very much."
Wendy De Luca Audio
Pierre-Arnaud Proux Transcript
"First, what I wanted to say is that we worked, indeed, a lot, as you mentioned, Natalia, on the setup of this Ukraine Investment Framework. I'm very grateful for the organization of events like today because we can try to design instruments as well as possible. But then we need help with outreach to ensure people understand how the mechanism works, so they know how they can become eligible. For that, I'm really thankful for the work done by Ukrainian authorities in the start, and also by the Kyiv School of Economics in different setups. So again, thanks a lot.
Now, I will go into the theory. I understand that the event is more about practice later, but I will explain more about the theory of what our Ukraine Investment Framework is and how it works. As mentioned, it's part of the Ukraine Facility. It's a tool to mobilize investment in Ukraine, both public and private investment. We don't have a specific allocation for either, but we want to target both, depending on where the needs are and what will have the biggest economic impact. You also need infrastructure, as Enrique said, and there are other tools to support businesses in Ukraine.
What’s important is that the Ukraine Investment Framework does not start from scratch. It builds on previous experiences. We already had tools in place. We call them EFSD Plus, the European Fund for Sustainable Development, and the Neighborhood Investment Platform. Maybe you're not familiar with these names, but some of you may already be. These are a good basis because we didn’t reinvent everything; we started with France's experience. But, of course, there’s a big difference between EFSD Plus, NEAP (the existing program), and what we are doing now, and that difference is scale.
Previously, we were talking about a few million euros, or tens of millions in guarantees and grants. Here, we’re talking about a total of €9.3 billion—€7.8 billion in guarantees and €1.5 billion in grants, which could be combined with loans. With such an amount, we have big ambitions. Of course, as large as it is, it’s not enough for the entire reconstruction of Ukraine, but it’s a significant contribution. We hope it’s not just about the EU’s contribution but that we can leverage resources from other financial institutions, donors, and, of course, the private sector. In the end, we need both public and private money together to make a big impact.
Our overall ambition with the Ukraine Investment Framework is to have around €40 billion of investment. Now, it’s important to mention the timeline because giving an amount without a timeline isn’t as meaningful. Here, we’re talking about an instrument that must be deployed by the end of 2027. This doesn’t mean all the funds or guarantees need to be signed by that date, but we should have all the contracts signed with our partners by then.
What’s important is who our partners are. At the moment, we’re not working directly with companies or local authorities to give grants. Instead, we work through implementing partners, which are international financial institutions (IFIs) like the EBRD, EIB, and IFC (the private part of the World Bank), as well as national ones such as the UK, Germany’s KfW, and BGK in Poland. We work actively with these partners because we cannot delegate this process; everything has to go through these implementing partners.
We are also contemplating direct communication mechanisms with companies, but everything still goes through an IFI. In terms of priorities, we use the Ukraine plan, designed by Ukraine and submitted to the Commission, as the basis for identifying priority projects and sectors that should receive support from the Ukraine Investment Framework. If you're not familiar with it, I recommend reading it. It focuses on human capital, energy, transport, agri-food, critical raw materials, and digital and green transition. These are broad priorities, but they show that we have big ambitions and want to cover many areas.
To give you an idea of where we stand in practical terms, a regulation was adopted on March 1st. We have already signed €1.4 billion of the €9.3 billion in instruments with different partners. For example, we signed guarantee agreements with IFC and EBRD. This doesn’t mean the entire amount is used yet; it’s a pocket allocated to IFC. When they issue a loan to a Ukrainian business that fits the guarantee agreement, they can draw from this allocation. So, the funds are available now, and businesses that go to EBRD or IFC can benefit.
We have also signed agreements related to access to finance for SMEs. Usually, we work via intermediaries, like banks active in Ukraine. The IFI gives a loan portfolio guarantee or a loan to the bank, which then provides a guaranteed loan to an SME, sometimes with investment grants as well.
Now, we are entering another phase. We have a steering board for the Ukrainian Investment Framework this Friday, where we will present a call for proposals to EU member states and IFIs, entering a larger and more open phase.
Again, thanks a lot for the event. I hope I was clear and not too long. We are available for questions, and I’m happy to welcome discussions. Of course, we have different communication channels, including our colleagues working on the Ukraine Investment Framework in Kyiv. Thank you."
Pierre-Arnaud Proux Audio
Irinia Kravchenko Transcript
Thank you very much, Natalia. By the way, I looked at the handbook and listened to what Volodymyr said, and it so well covered what the EBRD is about. As you mentioned, there are many bankers we've worked with, almost all of them leading banks. So, where we are—you know, the figures speak for themselves. Yes, we are actively involved in all sectors—public, private, including, as you said, SMEs. We are actually investing more each year than we did before the war. It’s about €1.5 billion each year. To date, since the beginning of the war, it’s around €4.5 billion, I think already €4.6 billion, and we are close to this year’s target.
In money terms, of course, public sector projects are taking a bigger chunk of our financing because, as Enrique said, these projects are like the blood vessels for the functioning of the economy. They’re extremely important. Supporting the private sector has always been and remains a priority for us. If you look at our portfolio today, our investments are split almost evenly between the private and public sectors.
In the private sector, we support a huge variety of projects and products. Bankers, you know them all. We are trying to move with the demands of the market. We started with new portfolio guarantees and risk-sharing products with local banks. Now we have a special window supporting veterans and victims of the war. We are also extending support for energy efficiency because energy is in big demand. This support isn’t limited to SMEs; it extends to a wider range of clients, including households. We are trying to be as responsive as possible to the demands of the current environment.
Now, I don’t want to drift too far from our topic. Why do we need this Ukrainian Investment Facility? Because this instrument helps us deliver more. In what sense? Despite the EBRD deciding this year not to use guarantees to cover its risks—thanks to a €4 billion capital increase approved by our board, which allows us to use donor funding differently—the Ukraine Investment Facility is still very useful. It helps us not to cover our risks, but to enhance the risk profile of our investments.
As I think you mentioned, collateral difficulties are a real issue—bankers here will understand how that works. For instance, one of our recent projects with Nova Poshta provided a $70 million loan, enhanced by a €6.3 million guarantee under the Ukrainian Investment Facility. We have three different areas where we use the facility, covering technical assistance, grants, guarantees, and blended financing. Grants will be especially useful when it comes to municipalities. They are extremely important in complementing our investments, given the large needs municipalities have.
Now, I won’t dive too deeply into details, but my colleagues have prepared an impressive list of projects utilizing the Ukraine Investment Facility. I can tell you that about 60% of the facility’s current utilization, including projects under preparation, is already committed, which I think is a good result. We have a healthy pipeline in all areas—financial institutions, financial inclusion, resilience—and our HIBAR program has proven to be a very useful instrument.
Unfortunately, in the private sector, the mortality rate is quite high. Due to confidentiality, I can’t disclose the names, but I can tell you we are covering a variety of sectors. SMEs, in particular, are the backbone of the economy, especially in terms of employment. Reaching them directly would be difficult for us, so we use a number of instruments with banks. The risk portfolio guarantee and risk-sharing under the Ukraine Investment Facility have a strong multiplier effect. We are grateful to the banks for helping us expand our coverage in the economy. The multiplier effect is about four. For example, we've provided €640 million to date, and the overall investment expected is up to €1.4 billion.
It all sounds very impressive, and we’d like to do more. We hope to deliver more. We know the situation is extremely difficult and the risks are high. Whatever help we can get from the facility, we are happy to use it as efficiently as possible and to move quickly because time is of the essence. Only by working together can we address the urgent needs of the economy.
If you have any specific questions, I’m happy to answer. I don’t want to spend too much time throwing numbers at you, but we do have quite an impressive list of projects in all sectors.
Thank you.
