Business Forum on the Rapid Recovery of Ukraine
On January 31st, the Business Forum on the Rapid Recovery of Ukraine brought together Ukrainian and Luxembourg businesses, direct investors in Ukraine, members of the international investor community and Luxembourg’s funds industry, as well as multilateral lenders.
The Ukraine-Luxembourg Business Club, founded in Grand-Duchy of Luxembourg in 2017, is a non- profit organisation facilitating business-to-business relations between Ukraine and Luxembourg. Since 2017 the ULBC has been organising a range of events to link the Ukraine and Luxembourg business communities. In 2022 the focus of ULBC adjusted to the war, and has included fundraising events together with partners like the Luxembourg for Finance and Luxinnovation, assistance to displaced Ukrainians living in Luxembourg including in partnership with the EIB, and support with finding employment.
About the Olena Zelenka Foundation
The Olena Zelenska Foundation is a charitable foundation established in September 2022 to fund healthcare, education, and humanitarian programmes in Ukraine. It has partnered with a range of organisations such as UNICEF (link here) and the European Commission (link here), and recently received a grant from the EIB Institute (link here).
Risks and opportunities in Ukraine now
The war makes private investment in Ukraine very risky. Current inflows are largely from donations and from international financial institutions and development banks. In terms of current opportunities, Ukraine needs a wide range of products and services now, and is planning for an enormous reconstruction effort, including a pivot of its economic system toward the European Union coupled with rule of law and other reforms. European companies are already working with Ukraine to help meet its wartime needs. Aside from the perspective of foreign suppliers or investors, there is also an opportunity now to use the time before the war ends to move forward as much as possible with anticorruption, justice system, and regulatory reforms that will be essential for investor confidence. Without very clear and convincing progress on this, foreign investment is likely to be limited or delayed, which will create risks for both Ukraine and Europe in the post-war period.
How Luxembourg can facilitate a fast recovery of Ukraine
Luxembourg hosts companies with skills and products that will be essential for Ukraine’s recovery, for example in relation to construction and logistics. Luxembourg is also a European centre of cybersecurity and could partner with Ukraine’s leading cybersecurity capabilities. Perhaps most importantly, Luxembourg is uniquely well-placed to help widen the investor base in post-war Ukraine. Post-war investment will require innovative funds and instruments that reduce risks for investors, reassure them that funding will be used for its intended purposes, and is well-coordinated with public sector money to maximise its impact in developing Ukraine’s post-war economy (which in turn would make Ukraine more attractive for further investment). Luxembourg hosts the financial expertise on both the public and private sides to create the structures that could enable this investment, without which Ukraine’s recovery might be significantly weaker or slower.