THIS WEEK IN UKRAINE
25 October 2024
EU Anti-Corruption Initiative to Support Ukraine's Reconstruction Efforts
Ukraine’s Vice Prime Minister for Reconstruction, Oleksii Kuleba, met with EU Anti-Corruption Initiative (EUACI) head Allan Pag Kristensen to discuss ongoing collaboration. EUACI will continue to support the Ministry of Community Development in improving accountability and transparency during Ukraine’s recovery. Key projects include the modernization of the DREAM platform and the implementation of a regional development GIS system. EUACI will also assist in monitoring large investment projects and provide expertise in IT and legislative analysis. Additionally, EUACI plans to focus on reconstruction efforts in the city of Mykolaiv.
KSE Institute Stated Ukraine Needs More Investments and Foreign Aid for Recovery
According to KSE Institute's 2024-27 Ukraine Macroeconomic Handbook, Ukraine faces a significant investment gap, requiring $200 billion for recovery, with only $140 billion projected. Despite GDP growth, the country lags behind EU convergence due to insufficient investment and uncertain foreign financing. Ukraine also needs $90 billion in external aid for 2025-27, but only $62.5 billion is expected. Budget deficits will remain high due to defense spending, while inflation and energy shortages will challenge recovery efforts.
UK to Provide $3 Billion Loan to Ukraine Using Frozen Russian Assets
The UK will loan Ukraine £2.3 billion ($3 billion), guaranteed by frozen Russian assets. Announced by Defense Minister John Healey, this loan is part of the G7's $50 billion plan to support Ukraine using seized Russian funds. The UK government aims to deliver the funds as quickly as possible, with discussions ongoing on how Ukraine will use them. The EU has already committed €35 billion as part of this broader initiative, and other G7 countries are expected to confirm their contributions soon during a ministerial meeting in Washington.
Ukraine and France Sign €200 Million Grant Agreement
Ukraine and France have signed an Implementation Agreement for a €200 million grant aimed at supporting Ukraine’s recovery. Up to 50% of the funds will be used to purchase Ukrainian goods and services, with key sectors including healthcare, energy, infrastructure, and agriculture. The agreement, a follow-up to a June deal between the two countries. Additionally, work is underway to expand the mandate of the French Development Agency (AFD) in Ukraine, enabling it, PROPARCO, and Expertise France to provide loans, grants, guarantees, and other financial and technical support to Ukrainian businesses.
Government Funds Three Ukrainian Industrial Parks
Ukraine's Ministry of Economy announced that three industrial parks—Korosten, BF Terminal, and Vinnytsia—will receive nearly UAH 350 million in state funding under the "Made in Ukraine" program. The funds will support infrastructure development, including roads and railways, to boost local manufacturing. This initiative aims to attract investors by addressing infrastructure gaps, with 91 parks now registered for state support, which includes up to 50% compensation for engineering and transport projects.
Ukraine’s Construction Sector Prepares for $486 Billion Post-War Reconstruction
Despite the war’s impact, Ukraine’s construction industry is mobilizing for a massive $486 billion reconstruction. Domestic and international companies are investing in new factories for essential building materials. French firm Saint-Gobain is constructing a €9 million dry materials plant, while Ireland's Kingspan is launching a $280 million insulation factory near Lviv. Ukrainian firms are also key players, with Oberbeton building a $25 million concrete plant in Ternopil and City One Development investing €100 million in a Kyiv glass factory. EFI Group is developing Ukraine’s first float-glass factory in Zhytomyr, worth €232 million. With these investments, the sector is poised to create 100,000 jobs and generate $5.6 billion in wages, driving the nation’s post-war recovery.