Ukraine and Germany, along with 12 other countries and 17 development agencies and international organisations, have launched the Small and Medium-Sized Enterprises (SME) Resilience Alliance for Ukraine. The event was held as part of the Ukraine Recovery Conference-2024 in Berlin.

The event was attended by First Deputy Prime Minister and Minister of Economy of Ukraine Yuliia Svyrydenko, Federal Minister for Economic Development and Cooperation of Germany Svenja Schulze, Executive Vice-President of the European Commission Valdis Dombrovskis, President of the European Bank for Reconstruction and Development Odile Renaud-Basso, Minister of Finance of Ukraine Sergii Marchenko and representatives of other international partners.

Countries, financial and development institutions and international organisations have joined the community. In particular, Austria, Canada, Estonia, the European Union, Germany, Japan, Luxembourg, the Netherlands, Norway, Spain, Switzerland, the United Kingdom, as well as the EU, the World Bank, the United States Agency for International Development (USAID), UNDP, UNIDO, the Council of Europe Development Bank (CEB), the European Bank for Reconstruction and Development, the European Investment Bank (EIB) and the European Investment Fund (EIF), the International Organization for Migration, etc.

All founding members contribute to the Alliance through financial investments, policy advice or development programmes. Total commitments currently stand at over EUR 7 billion for ongoing and new SME programmes, of which over EUR 4.5 billion is for new projects.

The main contributions to the new commitments of EUR 3.9 billion will come from the Ukraine Facility. In particular, Ukrainian SMEs will have access to financial instruments under the investment component of the Ukraine Investment Framework. The package also includes new financing from the European Bank for Reconstruction and Development to meet the liquidity needs of Ukrainian companies and support businesses affected by the war as well as vulnerable groups of the population. In addition, payments from the EU budget will help the Government of Ukraine implement SME-related reforms and support them financially.

"Small and medium-sized businesses are the backbone of our economy and an important part of economic resilience. According to the State Statistics Service, 1.7 million SMEs were operating during the first year of the full-scale war. They provided one in five jobs. They are now playing a key role in the country's recovery. However, the war has hit businesses hard in many ways. Our goal is not only to help them recover, but also to create conditions for their development. That is why I am sincerely grateful to the partners who have joined the SME Resilience Alliance. It will help implement our new SME Recovery Strategy, which will be adopted shortly. Over the next four years, the total amount of support for SMEs will be approximately EUR 7 billion," said Yuliia Svyrydenko.

The First Deputy Prime Minister of Ukraine and Minister of Economy of Ukraine also said that the Alliance would mobilise support for Ukrainian business in three key areas. First, reforming Ukraine's SME policy to create a favourable business environment for development. This will be achieved through the implementation of the SME Strategy 2027 and reforms, including technical advice on the regulatory framework, policies and government programmes to support SMEs. It also includes technical assistance to improve the skills and knowledge of entrepreneurs, especially in terms of access to international markets in view of EU accession.

Secondly, it is the development of strong and sustainable institutions, as well as support for existing ones, that mobilise finance, provide insurance instruments, and implement support programmes from partners. The Ukrainian SME ecosystem already offers various institutions, such as the Export Credit Agency (ECA) or the Business Development Fund (BDF). Within the framework of the Alliance, the main international partners, including Germany, the EU, the World Bank, the Japan International Cooperation Agency and the Luxembourg Development Agency, want to transform the latter into a national development institution that will support small and medium-sized businesses and make them a driving force behind Ukraine's economic recovery.

And thirdly, access to finance, which involves providing funds to Ukrainian banks to support SMEs. These instruments include, among others, private capital contributions, risk-sharing instruments, guarantees, mini- and investment grants, loans and interest subsidies.

After the URC 2024, the SME Resilience Alliance will establish a coordination mechanism led by Ukraine and Germany to support the implementation of the SME Strategy, mobilise support and coordination among donors, as well as support and discuss reforms in the SME sector. Each member of the Alliance will be represented by one coordinator.