Today's Contents
Reporter's Notepad:
- Baseline scenario - "We are headed towards a cessation of hostilities, rather than peace." URN chats with Benjamin Godwin of Prism Strategic Intelligence.
Just The Facts:
- EIB, EC sign €2 billion guarantee to support reconstruction of Ukraine
- CIA chief confirms US paused intelligence sharing with Ukraine
- France, UK work to finalize Ukraine peace plan 'in days,' sources say
- EBRD mulls €38.5 million in portfolio risk-sharing facilities for ProCredit Bank Ukraine
- Australia allocates €6 million more to Ukraine Energy Support Fund, bringing its total to €18 million
Here's What They Think:
- Atlantic Council: Europe has the means to defend itself and support Ukraine against Russia
- USA Today: Trump's tough tactics could be the key to ending Russia's war in Ukraine
Sober Second Thought:
- 25% of Ukrainian businesses say government officials abuse regulatory norms, BRDO survey shows
Dear reader,
On the tempestuous Ukrainian political front, the news often changes before we at Ukraine Rebuild Newswire even have time to finish writing it. With such unpredictability, we've started speaking more often with people who seek to make sense of such turmoil for a living.
So URN Daily talked yesterday afternoon with Benjamin Godwin, a partner at strategic intelligence firm PRISM Strategic Intelligence, which advises business clients in Ukraine and the region. Here's his take:
"Our baseline scenario is that we are headed towards a cessation of hostilities, rather than peace. The Russians will pretend to not want to invade more of Ukraine for a spell, and guarantees offered by Western nations to Ukraine will offer little in the way of deterrence."
"Russia will use the ceasefire to explore a new economic relationship with the United States, and will hold off further offensive action while it explores that relationship. As soon as that relationship turns sour, or there is political change in the US, Russia is likely to return to offensive military action."
He said any halt to the fighting, however tenuous, hinges on Ukraine and the US signing some economic deal, such as the minerals deal.
He said Ukraine will likely find itself offering substantial advantages to foreign investors in the hopes that the presence of multiple large Western corporations will deter further Russian aggression in the future.
In a recent note to clients, PRISM said that a peace deal is unlikely to hold:
"Russia will likely observe a ceasefire in the short term. Longer term, however, Russian President Vladimir Putin does not want to see an independent, pro-Western Ukraine and will treat a peace deal as an opportunity to rearm."
In the meantime, according to the firm, Ukraine will likely hold elections, and Zelensky is not guaranteed victory:
"Zelensky will be vulnerable in an election: while his poll ratings have improved since Trump's inauguration, there is less support for him running for a second term. This political uncertainty, combined with an anticipated major Russian disinformation operation ahead of an election, could prove highly destabilizing for Ukraine."
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 ...
EIB, EC sign €2 billion guarantee to support reconstruction of Ukraine
The European Investment Bank (EIB) and the European Commission (EC) on Thursday signed a guarantee agreement that will allow the EIB to invest at least €2 billion in urgent recovery and reconstruction projects in Ukraine.
The funding is part of the European Union's €50 billion Ukraine Facility, the block's financial assistance program for the country, for the period 2024-2027.
The funds will support public sector operations across key industries, with a focus on enhancing Ukraine's energy infrastructure, the EIB said in a press release.
Investments will strengthen energy grids, expand hydropower and renewable energy production, and improve energy efficiency. Additionally, they will modernize railways, enhance urban public transport, and upgrade transport connectivity.
"We are accelerating investment projects that meet our most pressing strategic needs, ensuring rapid reconstruction and modernization," said Economy Minister Yulia Svyrydenko in a separate press release. "Each implemented project brings Ukraine closer to the EU."
The financing will also aid in restoring municipal infrastructure, such as water and heating systems, public lighting, and essential facilities like schools, hospitals, and universities, as per the statement.
"This will allow us to make crucial investments in the recovery of Ukraine's critical infrastructure and key public services, reinforcing the country's resilience and its path towards integration into the European Union," said EIB President Nadia Calviño.
The signed guarantee agreement falls under the Ukraine Investment Framework (UIF), a key component of the Ukraine Facility. The UIF is designed to attract public and private investments for Ukraine's recovery and reconstruction, backed by €9.3 billion in financial instruments, including €7.8 billion in loan guarantees and €1.5 billion in blended finance.
UIF's goal is to mobilize €40 billion in investments to support Ukraine's recovery, reconstruction, and modernization, the EIB said.
CIA chief confirms US paused intelligence sharing with Ukraine
CIA Director John Ratcliffe confirmed on Wednesday that the US has paused intelligence-sharing with Ukraine following a halt earlier this week of all US military aid to the war-torn country.
In an interview with Fox Business, Ratcliffe said that US President Donald Trump "had a real question about whether President Zelensky was committed to the peace process, and he said 'let's pause, I want to give you a chance to think about that'."
The halt in intelligence-sharing was first reported by the Financial Times earlier on Wednesday.
Ratcliffe told Fox Business that Zelensky's statement expressing readiness for peace came swiftly in response to the US halt in military aid and intelligence-sharing.
"I think on the military front and the intelligence front, the pause (that prompted Zelensky's response) I think will go away, and I think we'll work shoulder to shoulder with Ukraine as we have to push back on the aggression that's there, but to put the world in a better place for these peace negotiations to move forward," Ratcliffe told Fox Business.
Trump's national security adviser, Mike Waltz, told Fox on Wednesday that Trump would consider restoring aid to Kyiv if peace talks are initiated and certain confidence-building measures are implemented.
France, UK work to finalize Ukraine peace plan 'in days,' sources say
France and the UK are working to finalize a peace plan with Ukraine, potentially "in days," to present to the US, while also fostering stronger ties between the US and Ukraine ahead of a possible trip to Washington, Reuters reported on Wednesday, citing unnamed diplomats.
"We're looking at putting this plan together in days and not weeks," one senior European diplomat told Reuters. A second European diplomat said the goal was to have everything in place, including a healthier dialogue between Washington and Kyiv while emphasizing to the US that Russia was the aggressor.
The details of the plan have not been revealed, with one European diplomat telling Reuters that military leaders aim to finalize the military aspects within the next week.
One option being considered is a partial one-month truce, covering air and sea attacks, as well as those targeting energy infrastructure, but excluding ground fighting. This would be supported by France, Britain, and a coalition of other willing countries, according to diplomats.
Ukraine's President Volodymyr Zelensky said on Tuesday that Ukraine is ready to come to the negotiating table to bring the war to an end.
During his nightly address to the nation on Wednesday, Zelensky stated that Ukrainian and American teams have started working on an upcoming meeting.
"Andriy Yermak (Head of the Office of the President of Ukraine) and Mike Waltz (White House National Security Advisor) held talks, and we're seeing forward momentum. We hope to see the first results next week," Zelensky said.
EBRD mulls €38.5 million in portfolio risk-sharing facilities for ProCredit Bank Ukraine
The European Bank for Reconstruction and Development (EBRD) said on Wednesday it is considering providing two portfolio risk-sharing facilities totaling €38.5 million to ProCredit Bank Ukraine, a subsidiary of the German ProCredit Holding.
The first facility, amounting to €21 million, would partially cover credit risks in up to €70 million of newly originated sub-loans by ProCredit Bank Ukraine.
This project is part of the EBRD's Resilience and Livelihoods Framework, designed to finance the working capital and investment needs of Ukrainian private businesses in agriculture and other essential sectors, the EBRD said in a project disclosure document.
The second facility, totaling €17.5 million, would partially cover credit risks in up to €60 million of newly originated sub-loans by ProCredit Bank Ukraine.
The facility is part of the EBRD's Energy Security Support Facility (ESSF), a program under the Resilience and Livelihood Framework, aimed at financing energy generation, storage, and efficiency sub-projects of Ukrainian businesses and households, EBRD said.
Both facilities are scheduled to be approved on April 9.
Australia allocates €6 million more to Ukraine Energy Support Fund, bringing its total to €18 million
The government of Australia allocated an additional €6 million to the Ukraine Energy Support Fund meant to help Ukraine withstand Russian attacks on its energy grid, the Ukrainian government said.
The allocation brings to €18 million the amount Australia has contributed to the fund, which was created in April of 2022 by Ukrainian Energy Minister German Galushchenko and European Commissioner for Energy Kadri Simson under the Energy Community Secretariat, according to a press release.
Contributions to the fund so far total €1 billion, with more than 30 donors including European Union member states, the UK, the US and various international and regional organizations, the Ukrainian government said.
Earlier this week, Italy agreed to contribute €13 million to the fund in an agreement signed by Italian Ambassador to Ukraine Carlo Formosa.
Atlantic Council: Europe has the means to defend itself and support Ukraine against Russia
Europe can use its strategic advantages, including economy, population, and military strength to stand against Russian President Vladimir Putin's ambitions and support Ukraine in resisting Russia's invasion, Agnia Grigas, an Atlantic Council fellow wrote in an op-ed.
Grigas noted that Europe spends more on defense than Russia, it has a larger population, and that Russia faces significant economic challenges, arguing that it is now up to European leaders to transform these strategic advantages into effective policies and actions.
USA Today: Trump's tough tactics could be the key to ending Russia's war in Ukraine
US President Donald Trump's tough stance on Ukrainian President Volodymyr Zelensky is highly controversial, but it could be the most effective strategy for negotiating an end to the war, Nicole Russell, a columnist at USA Today, wrote in an op-ed.
Trump should have expressed more empathy during his meeting with Zelensky at the White House for all that Ukraine has lost in the war, but his aggressive approach doesn't mean he is siding with Russian President Vladimir Putin but rather suggests his eagerness for the war to end in line with his America First policy, Russell wrote.
25% of Ukrainian businesses say government officials abuse regulatory norms, BRDO survey shows
A quarter of Ukrainian sole proprietors and legal entities believe that government officials violate regulatory norms, according to a survey conducted by a Kyiv-based think tank Better Regulation Delivery Office (BRDO).
The BRDO's research, which examined regulatory pressure on business, involved 807 business representatives from all over Ukraine. The majority of the responders (69.5%) were legal entities, while the remainder represented sole proprietors.
According to the respondents, the biggest challenge for businesses in Ukraine is Russia's military aggression, cited by 60.2%.
Additionally, flawed legislation in their operating sectors is a major concern for 56.3%, while 34.6% point to the excessive number of permits required to run a business, BRDO said.
The research findings reveal that, among the 27 government agencies included in the poll, the State Tax Service is considered to create the most obstacles to doing business in Ukraine, cited by 44.1% of respondents.
The State Tax Service is followed by the State Customs Service of Ukraine at 11.1%, the State Inspection of City Planning and Architecture at 8.8%, the State Service of Ukraine on Labor at 7.9%, and the National Police of Ukraine at 7.5%, according to the survey.
Only 2.8% of participants indicated that local authorities create obstacles for businesses, with a notably greater impact on sole proprietorships (4.2%) compared to legal entities (2.9%).
Meanwhile, 7% of respondents reported facing no obstacles in their interactions with government agencies.
Since 2023, the BRDO team has been actively involved in the Interagency Working Group (IWG) on Deregulation, reviewing state supervision and control areas, it said.
Over two years, the IWG has reviewed 1,323 regulatory instruments, with 141 already canceled. Implementing these decisions will save Ukrainian entrepreneurs 21.3 billion hryvnias ($514 million), free up hundreds of thousands of work hours, and ultimately create new jobs, according to BRDO.
Social Media Posts
Regulating Public Investment Management
UkraineInvest, the government investment promotion agency, highlighted ongoing government reform of its public investment management (PIM), including the approval of a document regulating PIM at the national, regional and local levels.
The document covers development of a medium-term plan for priority public investments at the state level, as well as preparation of public investment projects and public investment programmes, as well as "evaluation and implementation of public investment projects at all levels of government."
Toothless Sanctions?
Transparency International Ukraine posted on social media that 17,000 people and companies are now subject to sanctions by Ukraine, but "the effectiveness of such restrictions remains questionable" because it lacks punishment.
"On 14 January, Volodymyr Zelenskyy submitted to the parliament draft law No. 12406, which provides for criminal liability for circumventing sanctions. Finally, our country can adopt a regulatory act that will allow punishing people who try to violate and circumvent anti-Russian sanctions. "
Foreign Companies' Losses in Russia
The KSE Institute promoted its latest report on the losses of Western companies in Russia as a result of the full-scale invasion of Ukraine, titled "Assessing foreign companies' direct losses in Russia: financial impact, market consequences, and strategic adjustments."
The report says Western companies have suffered $167 billion in total write-offs, including $57 billion in assets seized by the Kremlin, plus $3 billion in exit taxes. BP faced $25.5 billion in losses, followed by Uniper with $22 billion and Fortum with $4.07 billion.
Advice for SMEs in Ukraine
BDO in Ukraine promoted an article summarizing advice offered to small and medium-sized businesses on digital transformation, cybersecurity and efficiency by BDO experts in Ukraine.
The article covers investment project development, marketing research, artificial intelligence as an optimization tool, digitalization of business management, external and internal penetration testing, and more.
Water Supply System Leaks Half the Water
Egis in Ukraine promoted an article by one of its engineers explaining the "significant" investments needed in Ukraine to modernize the water supply system and the need for international technical and financial support.
"Andrii explains the hidden water losses that occur daily due to the deterioration of infrastructure," the post states. "To deliver 80 or 100 liters of water to the consumer, the water utility loses the same amount along the way. This means that if a Ukrainian city with one million residents consumes 80,000 cubic meters of water per day, the same amount could be lost into the ground."
Ukraine Restaurant Solution Startup Attracts €1 Million
The TechUkraine NGO highlighted a €1 million investment scored by Choice, a Ukrainian startup, to expand across Poland with its digital solutions for restaurants, which are already used by more than 2,000 restaurants.
The injection of capital by Polish fund Smartlink Partners, structured as a convertible loan, comes amid Choice's Series A funding round. Choice has so far raised $4.5 million in funding, achieving an impressive $3 million in annual recurring revenue, according to an article by TechUkraine.
URN Daily: Sense Bank and Ukrgasbank for sale? And US seeks to cancel $4.7 billion of Ukraine's debt
