Today's Contents
Reporter's Notepad:
- How peaceful will peacetime be? The outgoing senior security manager for Grammarly Ukraine considers possible answers.
Just The Facts:
- US pauses all military aid to Ukraine, sources say
- Zelensky says Ukraine needs 'proper' diplomacy for the war to end as soon as possible
- Astarta to invest $76 million to build new seed crushing plant in western Ukraine
- Ukrainian Railways to launch locomotives unit in 2025
- Danish aid committee allocates €26 million to energy equipment, mine clearing in Mykolaiv
- 29% of Ukrainians rank US as 'hostile nation' after Trump-Zelensky spat, survey shows
Here's What They Think:
- FT: Norway should allocate its natural gas windfall to Ukraine
- E-IR: Ukraine's sovereignty risks becoming secondary to great power interests
Sober Second Thought:
- Investments in Ukraine's tech sector reach $462 million in 2024, 'halfway' to pre-war levels, AVentures reports
Dear subscribers,
I had a fascinating conversation this morning with George Janjalia, a former senior intelligence officer with Georgian Military Intelligence.
George has led security for Grammarly in Ukraine throughout the three years of war, but the gig expired last week as Grammarly decided to handle security in-house.
George, a 34-year-old West Point graduate, now has a month to find a new contract in Ukraine for his employer, Healix, or he goes back home to Georgia.
Like many professionals, George has seen a sudden spike in interest from companies looking at entering Ukraine when the war ends. The peace immediately following the war, though, may not be very peaceful, he warns.
When foreign investors warily consider joining the reconstruction, they often imagine Russian missile strikes, or land mines crippling employees and drone strikes destroying warehouses.
Part of George's job is to plan for a month down the road, six months, and beyond. And he doesn't see Russian missiles as a major risk for foreign investors for long.
"When the war ends, the risk context will change. Right now, the biggest risks are explosions and fires caused by projectiles. When we move to peace, one of the biggest factors that will come into play will be the disgruntled soldiers with PTSD."
"About 25% of the soldiers will have PTSD and, based on my research from Vietnam, a significant percentage of the people with PTSD will be aggressive. That number will go up if we are talking about alcohol or about other traumatic events. So a lot of people out there will be really, really angry."
Adding to this may be the return to fractious internal politics as martial law ends in a country replete with weaponry.
At the same time, the crippled energy grid may falter amid the struggle to build out many billions of dollars in housing, factories, mines, ports, roads and other infrastructure.
The multinationals and foreign investors will have to struggle with all of it, as well as the severe labor crunch that's already affecting the country.
Again, it's George's job to consider such scenarios, and we'll be hearing a lot more from George soon. Indeed, he'll be the subject of an upcoming URN advice column for foreign investors concerned about security.
To end on a positive note, though, I'll recall a conversation late last year with Bart Gruyaert, who proved, with laboratory data, that Ukrainian war veterans actually make better employees for his company than regular civilians.
Lab tests run by Neo-Eco, the French firm famous for recycling war rubble into building material, show the material produced by its war veteran employees is four or five times better quality than the average.
And the results were consistent and repeatable.
The full story can be found here.
Cheers,
Adam Brown
URN Founder
For questions related to daily news, story suggestions, scoops and other newsy matters, please message URN newsroom chief Valentina Bajic at valentina@ukrainerebuildnews.com.
For sponsorships, the URN Guidebooks, the Tips for Investors column and other general matters, email founder Adam Brown at adam.brown@ukrainerebuildnews.com.
If in doubt, email us both and we'll sort it out.
Now, on with the headlines of the day ...
US pauses all military aid to Ukraine, sources say
US President Donald Trump has paused all US military aid to Ukraine amid the escalating tensions between Washington and Kyiv, an unnamed White House official told Reuters.
"President Trump has been clear that he is focused on peace. We need our partners to be committed to that goal as well. We are pausing and reviewing our aid to ensure that it is contributing to a solution," the official told Reuters.
The development comes after a heated exchange between Trump and President Volodymyr Zelensky of Ukraine on Friday in the Oval Office. During the meeting, Trump accused Zelensky of being ungrateful for US support and not willing to end the war with Russia, while Zelensky challenged Trump over his approach toward Russian President Vladimir Putin.
On Monday, Trump reiterated his stance that Zelensky did not want peace, reacting to a report from The Associated Press that quoted Zelensky as saying that a deal to end the war "is still very, very far away."
According to the most recent data from a Washington-based non-profit Committee for a Responsible Federal Budget, the US Congress has approved $175 billion in total assistance for Ukraine since the start of the Russian invasion in February 2022.
The Trump administration inherited $3.85 billion in Congressionally approved authority to draw from US arms stockpiles for Ukraine. However, amid rising tensions between Washington and Kyiv, it seemed unlikely that this aid would be used, according to Reuters.
Monday's decision on pausing the aid also appeared to suspend deliveries of military equipment previously approved by former President Joe Biden, including munitions, missiles, and other systems, Reuters said.
Zelensky says Ukraine needs 'proper' diplomacy for the war to end as soon as possible
Ukraine's President Volodymyr Zelensky said in his nightly address to the nation on Monday that his team is working to create conditions for "proper" diplomacy for the war to end as soon as possible with a "decent peace."
"We need peace – real, fair peace – not endless war," Zelensky stated.
The president reiterated Ukraine needs security guarantees, arguing that the lack of them led to Russia's occupation of Crimea, the war in Donbas, the full-scale invasion of Ukraine in 2022, and its continuation.
"Ukraine, all of Europe, and America – together, we can ensure decades of peace. And for this, we must stay constructive – work together, complement each other's proposals, and speed up diplomacy to end the war," Zelensky said.
Earlier in the day, while returning to Kyiv from the UK where he attended a summit of European leaders who agreed to work on a plan to end the fighting, Zelensky said that there is clear support from Europe for the Ukrainian cause.
"Today, we coordinated our positions. There will be many meetings and joint efforts in the coming days and weeks. There will be diplomacy for peace. And for the sake of all of us standing together – Ukraine, the whole of Europe, and necessarily America," he said.
Zelensky said European countries and Ukraine will soon shape their common positions which will then be presented to the US.
"Of course, we understand the importance of America, and we are grateful for all the support we have received from the United States," he added.
Also on Monday, The Associated Press quoted Zelensky as saying late on Sunday that a deal to end the war "is still very, very far away." US President Donald Trump reacted to this alleged Zelensky's statement by saying: "This is the worst statement that could have been made by Zelenskyy, and America will not put up with it for much longer!"
"It is what I was saying, this guy doesn't want there to be Peace as long as he has America's backing and, Europe, in the meeting they had with Zelenskyy, stated flatly that they cannot do the job without the U.S.," Trump wrote in a post on Truth Social.
Astarta to invest $76 million to build new seed crushing plant in western Ukraine
Astarta, the Ukrainian agro-industrial holding company, announced plans to invest $76 million to build a multi-seed crushing facility in the western Ukrainian region of Khmelnytsky.
The plant, slated to be commissioned next year, will be able to process 400,000 tons of oilseeds a year, including rapeseeds and soybeans, the company said in a media statement.
"The new multiseed crusher will allow us to expand our range of ingredients for the feed industry," said Viacheslav Chuk, the company's chief commercial officer and strategic marketing director. "The growing demand for soybean products in the EU opens up new opportunities, and we are ready to implement them."
He also said that the company has already chosen an equipment and technology provider for the plant and is now waiting for the authorities of the Narkevytska territorial community in the Khmelnytska oblast to
Chuk added that Astarta will apply for state aid as the crusher qualifies under the state's definition of "significant investment," or an investment of more than €12 million, and can be eligible for subsidies, tax breaks and other benefits.
Early this year, the US International Development Finance Corporation (DFC) approved a loan of up to $40 million to Astarta to aid in the construction and operation of a soy protein processing plant.
Astarta, with 212,000 hectares under management, is Ukraine's largest sugar processor, with up to 500,000 tons of sugar production per year. It also produces about 115,00 tons of mil and processes 230,000 tons of soybeans, according to its website.
Ukrainian Railways to launch locomotives unit in 2025
Ukrainian national railway operator Ukrainian Railways (Ukrzaliznytsia) will establish a locomotive unit this year to centralize operations of its existing locomotive depots, Ukrzaliznytsia Chairman Oleksandr Pertsovsky said.
"This year, we are launching the full-scale operations of Ukrzaliznytsia's Locomotive Company. Our locomotive depots will be integrated into it, allowing for centralized coordination, process optimization, increased workload for strong depots, and better resource allocation," Pertsovsky said on Sunday.
Pertsovsky made the statement in a post on Facebook following a visit to locomotive depots of Odesa Railways, one of Ukrzaliznytsia's territorial branches.
Ukrzaliznytsia operates 48 locomotive depots and has diesel locomotive stock consisting of 2,447 units and electric locomotive stock with 1,863 units, according to the company's website.
In December, the European Bank for Reconstruction and Development (EBRD) said it is lending a total of €480 million to Ukrzaliznytsia to procure electric locomotives and small-scale power generation.
In a loan disclosure document at the time, the EBRD said that many depots in Ukraine were built over 100 years ago and need significant repair and reconstruction.
Danish aid committee allocates €26 million to energy equipment, mine clearing in Mykolaiv
The committee that oversees Danish aid to Ukraine has allocated an additional 200 million Danish krona (€26 million) to the reconstruction of the southern region of Mykolaiv, the Embassy of Denmark in Ukraine said.
The new package of aid will go toward buying energy equipment and solar panels, mine clearance in surrounding farmland, ensuring water supply, upgrading municipal transport and restoring social infrastructure, the embassy said in a social media statement.
The biggest single allocation is 60 million krona from the international financial institution Nefco for the installation of solar panels to boost the renewable energy generation of regional energy company MykolaivOblTeploEnergo, followed by 57 million krona for energy equipment for the city of Mykolaiv.
Another 25 million krona will come via the European Bank for Reconstruction and Development to buy hybrid trolley buses for Mykolaiv city and 22 million krona from the Danish Refugee Council will go toward mine clearance.
Denmark has singled out the Mykolaiv region on the Black Sea as a focal point for Danish aid, and is expected to donate to Mykolaiv about 60% of the €680 million it has allocated to Ukraine aid in a three-year package.
Since the full-scale Russian invasion of February 2022, Danish support for Ukraine amounts to about €7.44 billion in military aid and about €783 million in civilian contributions.
29% of Ukrainians rank US as 'hostile nation' after Trump-Zelensky spat, survey shows
After the public spat between US President Donald Trump and Ukrainian President Volodymyr Zelensky last week, a survey suggests more Ukrainians regard the US as a hostile country than a friendly one.
A survey of 1,000 Ukrainians by Gradus Research suggests the United States has dropped from its position at the top of the friendly nations list to the sixth least friendly country.
According to the survey, 29% of respondents consider the US hostile to Ukraine, while 13% consider it friendly. The results place it just above Hungary and India in the ranking of friendly nations.
The most friendly nation to the UK, according to the survey, is the UK, followed by the Baltic States, France, Poland and Germany. The least friendly state is Iran, with Belaris, China and North Korea ranked just above it.
The survey also shows that 58% of Ukrainians oppose holding an election in wartime, down from 52% last week.
The survey relied on a self-completed questionnaire in the Gradus mobile application. The sample reflects the population structure of cities with more than 50,000 inhabitants aged 18-60, Gradus said.
FT: Norway should allocate its natural gas windfall to Ukraine
Norway, which was left as Europe's largest natural gas supplier after Russia cut its supplies following the invasion of Ukraine, and these excess export revenues should go to Ukraine for defense and reconstruction, Håvard Halland, a professor of sustainable finance at Heriot-Watt University, wrote in an op-ed for the Financial Times.
The value of Norway's war windfall of €109 billion is almost equivalent to all US military and civilian support for Ukraine to date, but the country this year provided only €3 billion to support Ukraine's war effort, which is less than its Nordic and Baltic neighbors as a share of GDP, Halland noted. Norway should step up and donate its windfall, either through staggered payments or a lump sum Ukraine could leverage via bonds, the author argued.
E-IR: Ukraine's sovereignty risks becoming secondary to great power interests
The Ukraine crisis exposes the harsh reality of great power politics, where smaller states serve as tools in larger strategic struggles, with the US-Russia rivalry shaping the war's trajectory potentially leaving Ukraine's sovereignty as a secondary issue, Mazlum Özkan, researcher at the University of Groningen, wrote in an op-ed for E-International Relations.
The conflict in Ukraine is not simply a struggle between democracy and autocracy but a contest for power and influence on the global stage. As the US and Russia pursue broader strategic objectives, Ukraine has become a battleground for their competing interests, caught in a struggle that extends far beyond its borders, Özkan wrote.
Investments in Ukraine's tech sector reach $462 million in 2024, 'halfway' to pre-war levels, AVentures reports
The total investment in Ukraine's tech sector amounted to $462 million in 2024, up by 120% from the prior year, and "halfway" to its pre-war peak in 2021 of $832 million, Kyiv-based venture capital fund AVentures Capital said in its Dealbook of Ukraine report, an annual overview of the Ukrainian tech investment ecosystem.
The defense tech sector is experiencing the fastest growth, fueled by increased investments, emerging startups, specialized acceleration programs, and miltech-focused venture capital backing Ukraine, the report said.
In both 2023 and 2024, the majority of investment volume came from a small number of growth and late-stage deals.
In 2024, Series C investments dominated, accounting for 48% of total volume. However, this figure is heavily influenced by the $200 million fundraising of Ukrinae's workflow automation platform Creatio in June 2024, which represents 90% of all Series C investments.
Meanwhile, early-stage investments remained stable at 32% of the total, closely aligning with 2022 (39%) and 2023 (39%). This consistency highlights the ongoing expansion of startups and the continued advancement of tech innovation in Ukraine, according to AVentures.
In 2024, the funding of the Series A round doubled in total volume to $58 million from $27 million, while Seed investment volume reached a record high, indicating a solid foundation for market recovery, the authors wrote.
u.ventures, which has been recognized by Forbes Ukraine as the most active venture capital investor in the Ukrainian startup ecosystem in 2024, made 15 investments last year: 13 in Ukrainian startups and 2 in Moldovan, including 3 follow-ons, with the average ticket of $420,000.
In addition, Ukrainian IT service companies continue to attract strategic investors, both domestically and from the US and Europe. For example, the Polish Euvic Group has become an active local player since 2022, acquiring small Ukrainian IT service companies via five deals on the market, according to the report.
AVentures noted that Ukraine's tech sector showed resilience through turbulent times and that there are many local companies that have the potential to raise substantial financial rounds in 2025 and going forward.
Turkish Businesses Meet Koreans on Rebuilding Ukraine
Burak Pehlivan, chairman of the International Turkish Ukrainian Business Association, recapped a meeting between Turkish and Ukrainian businesses and the Korea International Infrastructure & Urban Development Agency (KIND) in Ukraine.
"Within the framework of Ukraine's reconstruction and construction activities, we will witness Turkish, South Korean and Ukrainian companies acting together in Ukraine and investing more together," he said, according to a machine translation of the post.
Greek Businesses Looking to Join the Rebuild
The KSE Institute, a Ukrainian think tank linked to the Kyiv School of Economics (KSE), posted that more than 130 Greek companies took part in an event called “Investing in Ukraine's Reconstruction: Opportunities for Greek Businesses,” organized by the KSE, the Tony Blair Institute for Global Change, and others.
"KSE Institute experts Olga Slyvynska and Максим Федосеєнко presented investment opportunities in various sectors of the Ukrainian economy – agriculture, energy, real estate, transportation, industry, and defense – to Greek companies," the institute said.
Agribusinesses in Ukraine Face Tough Year of Talks
The Ukrainian Agribusiness Club Association (UCAB), which represents about 200 agribusiness companies, promoted an article starting that, even amid war, Ukraine this year "is due to face far more intensive negotiations with its European counterparts" over agriculture and integration.
At the same time, "the competitiveness of Ukrainian grain is gradually slowing not only because of the war but also due to the market aspects of cost: rising land rents, higher wages due to labour shortages, and increasing costs of production materials," the article says. "To make matters worse, the domestic agro sector is prone to shellings and hostilities."
Update to BDO Investor Guide
BDO in Ukraine announced an update to its Investor's Guide, "provides up-to-date information on the opportunities and benefits of doing business in Ukraine," in view of recent changes.
The update includes Ukraine's rankings in its use of open data, the development of its e-government sector and cryptocurrency adoption, as well as an update on military bonds and Eurobonds and details of the Nazovni platform to match Ukrainian exporters with importers abroad.
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