The Danish government has established a new fund for Ukraine to increase the support and assist Ukraine in managing the consequences of the Russian invasion. The government proposes that DKK 170m out of the fund is earmarked for IFU to contribute to supporting the Ukrainian private sector and rebuilding Ukraine’s infrastructure.
“IFU already has a strong foothold in Ukraine. With the new Ukraine facility under IFU, Denmark will help pave the way for new investments in important sectors such as energy, agriculture, processing and IT. We cannot wait for the war to end – we are helping now, when Ukraine’s private sector needs it the most,“ said Dan Jørgensen, Minister for Development Cooperation and Global Climate Policy.
“We are very pleased with this additional contribution to IFU’s work in Ukraine, where we have already assisted a number of private companies in managing the challenges created by the war and helped rebuilding the infrastructure. With the new funds, IFU can strengthen this work and also engage Danish companies in the rebuilding of Ukraine,” said Michael Rasmussen, Chairman of IFU’s Board.
During the years, IFU has made 60 private sector investments in Ukraine, and IFU still has 14 active investments within renewable energy, agriculture and manufacturing, for example. IFU’s total investment amounts to DKK 575m in the current active portfolio. IFU has an ongoing dialogue with the companies, e.g. through its office in Kyiv, and helps solving various challenges, such as additional financing for company operations.
IFU plays an important role
Peter Hansen is managing director of Cormall Agro Holding A/S with several subsidiaries in Ukraine. He is one of the Danish businessmen, who is active in Ukraine and has maintained and extended his involvement during the last year of war.
“It is difficult, but important that we keep supporting the private sector in Ukraine, as it is vital to the economy and employment in the country. Here, IFU plays an important role. They have great experience in Ukraine and can provide quick and efficient support directly from their office in Kyiv. Therefore, I fully support that IFU now gets an even better chance to support Danish and local businesses in the country,” said Peter Hansen, Managaing Director, Cormall Agro Holding A/S.
”The Confederation of Danish Industry and I are happy that the government and the parties supporting the proposal have chosen to step up IFU’s involvement in Ukraine through a Ukraine fund, and thereby made it possible for Danish and local companies to contribute to the rebuilding of Ukraine. Supporting the private sector ensures employment and strengthens Ukraine’s economy, which is central to the rebuilding of Ukraine, both now and after the war. It is also positive that some of the new funds are earmarked for DSIF and the building of sustainable infrastructure in Ukraine – an area where Danish companies have core competencies and can contribute to making a positive difference,” said Thomas Bustrup, Deputy CEO, Confederation of Danish Industry and IFU board member.
Currently, private investors in Ukraine face the challenge of not being able to receive payments or instalments on loans or dividends from investments. This enhances the need for the new contributions from the Ukraine fund. It is expected that the additional funds can contribute to mobilising further private capital to strengthen Ukrainian trade and industry in the areas that need it most.
“Investments in Ukraine are naturally associated with very high risk at the moment, but our task is to help Danish and local companies maintaining their business activities and employment in extremely difficult circumstances. This is what we do on a daily basis, and through our experience and broad network in Ukraine, we are well-equipped to invest the new funds in the rebuilding of Ukraine,” said Torben Huss, CEO of IFU.
Contributes to rebuilding infrastructure
DKK 60m of the new funds will be allocated to Danida Sustainable Infrastructure Finance (DSIF), which is managed by IFU. DSIF already has several projects in Ukraine, and has contributed to the financing of 20 boilers to help rebuild a destroyed district heating plant to deliver heating and hot water for 250,000 people in central Ukraine. DSIF has additional activities in the pipeline to rebuild infrastructure in Ukraine together with Nordic and European partners.
“We must dare to invest in Ukraine’s future, even when the bombs are falling, and the war is still on. I have witnessed myself how hard a city like Mykolaiv has been hit, when the citizens suddenly are without access to clean water. Therefore, I am very pleased that we are now making further investments into restoring the water supply to the citizens of Mykolaiv,” said Dan Jørgensen, Minister for Development Cooperation and Global Climate Policy.