On Wednesday, June 26, the event "Ukraine Investment Framework: Mechanism for Rapid Economic Recovery" took place, organized by the Ministry of Economy in collaboration with the Kyiv School of Economics with the support of the European Union. The Ministry of Economy of Ukraine presented an overview of 12 programmes from International Financial Organizations totaling 1.4 billion euros, which will be implemented under the Ukraine Investment Framework.
The programmes of the first stage of the Ukraine Investment Framework were approved by the European Commission during the Ukraine Recovery Conference in Berlin. Out of the 1.4 billion euros in financing, 1.05 billion euros are allocated for guarantees to expand existing IFI programmes, 289 million euros for blended finance and grants, and 55.5 million euros for technical assistance in project preparation and application for financing.
"Both the programmes and the IFIs we can work with under the first stage of the UIF vary depending on the direction of work, sectors, and financing volumes. We also understand that many projects currently have insufficient readiness and require further processing. Therefore, the Government is working on launching a Project Preparation Facility to increase the number of projects ready for financing," said Volodymyr Kuzo, Deputy Minister of Economy of Ukraine.
He added that at this stage, the programmes will focus on supporting Ukraine's recovery and reconstruction in three main areas:
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Energy: aimed at restoring critical electricity infrastructure, increasing generation capacity, and investing in renewable energy sources.
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Infrastructure: includes development, repair, and restoration of municipal infrastructure, water supply and wastewater management, as well as transport infrastructure and local mobility.
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Support for Small and Medium-sized Enterprises (SMEs): provides funding for businesses in de-occupied and front-line regions, companies owned by war veterans, internally displaced persons, and vulnerable groups, as well as companies investing in expanding production and green technologies.
Under the programmes, private and state-owned companies, as well as municipalities, depending on the project costs, can receive financing directly from IFIs or local partner banks.
Already at this stage of UIF, programmes have been launched by the EBRD, EIB, IFC, German Development Bank (KfW), and the European Fund for Southeast Europe (EFSE), as well as Polish Bank Gospodarstwa Krajowego (BGK). Among the local partners of IFIs participating in the implementation of UIF are state-owned PrivatBank, Oschadbank, Ukreximbank, and Ukrgasbank, as well as several private banks.
"At this stage of UIF, applications for financing and technical assistance can be submitted by state and private companies and municipalities that meet the sectors and requirements of approved programmes. For large projects worth over 10 million euros, it is necessary to apply directly to the involved international financial organizations. Small and medium-sized enterprises can apply to Ukrainian partner banks implementing SME support programmes," said Oleksiy Sobolev, Deputy Minister of Economy.
"Special attention within UIF is focused on the development of small and medium-sized businesses. The SME sector plays a key role in the economy, providing about 80% of the added value. At the same time, SMEs face both financial constraints and other war-related losses and disruptions in operations.
For SME support programmes, 15% of guarantees have been reserved, which IFIs can receive for implementing programmes within the investment component of Ukraine Facility. Specifically, programmes focusing on small and medium-sized enterprises have already been approved by the EIB, EBRD, German Development Bank (KfW), and Polish BGK, which will be implemented in partnership with Ukrainian banks," added Oleksiy Sobolev.
Under UIF, businesses will have access to guarantees to reduce collateral costs for loans, a blended credit and grant mechanism, and technical assistance in refining projects and applying for funding.
"The launch of the first stage of UIF is an opportunity to attract additional funding from international financial organizations and Ukrainian banks. These programmes are already available for projects in the public and private sectors in sectors defined in the Plan for the Ukraine Facility," said Volodymyr Kuzo.
He also added that Ukraine expects further expansion of programmes and the introduction of new tools in subsequent stages of UIF, as well as the involvement of a wider range of IFIs, banks, insurance companies, and private equity funds. The relevant decision will be made by the European Commission at the next meeting of the UIF Steering Council.
Additional information on the Ukraine Investment Framework and an analysis of approved programmes, instruments, sectors, and types of clients they can work with are available in the presentation at the following link: Ukraine Investment Framework Presentation.
