Ukraine's private sector will require USD 5.8bn to rebuild by 2024, with some sources of funding already in place: Yuliia Svyrydenko
The needs of the Ukrainian private sector for 2024 in the areas of industry and commerce alone amount to USD 5.8 billion. At the same time, some sources of financing are already available to businesses. This was stated by Yuliia Svyrydenko, First Deputy Prime Minister of Ukraine and Minister of Economy, commenting on the results of the World Bank's report on Ukraine's losses and recovery needs.
On 15 February, the World Bank and the Government, in cooperation with the European Union, the United Nations and other partners, announced the results of the Third Rapid Diagnostic Needs Assessment (RDNA3) of the damage caused by the almost two-year war in Ukraine.
"The results of the report will form the basis for the implementation of the Ukraine Action Plan in terms of necessary reforms and the Ukraine Facility, in particular the investment mechanism (Pillar 2), which will allow the private sector and state-owned companies to receive financing for investment projects aimed at rebuilding and economic growth of Ukraine," said Yuliia Svyrydenko.
Private investment is expected to have the highest multiplier effect. The Report states that Ukrainian industry and the commercial sector are the backbone of the Ukrainian economy, generating about 1/3 of the gross domestic product and providing jobs for about 6 million people, and that the losses to the sectors as a result of the war are estimated at about USD 15.6 billion.
"Therefore, the recovery of the private sector is a key priority for the Government of Ukraine. In 2024 alone, the investment needs of industry and commerce amount to USD 4.2 billion, and working capital - USD 1.6 billion, for a total of USD 5.8 billion. This is the overall need for financing the sector, which we, together with our international partners, intend to meet," the First Deputy Prime Minister said.
The main areas of funding to be provided by the Government, donors and international financial organisations this year include grants for business recovery and modernisation, partial compensation of interest rates under the 5-7-9% affordable loans programme, support for Ukrainian exporters through the Export Credit Agency, war risk insurance programmes, incentives for investment in the private sector, as well as an extremely important area - financing capital investments and equipment upgrades for domestic enterprises affected by the war.
"The Report envisages at least USD 1.6 billion for investment financing, and it is crucial that the instruments for obtaining it are available to companies, both through the banking system, corporate financing and project financing. This is especially true in capital-intensive industries that need to install or upgrade production lines, such as the manufacturing industry. In order to provide financing, we are using the Ukraine Facility and, in particular, the Investment Framework to reduce the risks of projects in Ukraine," summarised Yuliia Svyrydenko.