U.S. investment firms setting up private-equity funds to support Ukraine reconstruction, UkraineInvest says

By James Rogers

The funds will support sectors such as logistics, real estate, and agri-processing, says UkraineInvest

A number of U.S. investment firms have joined the massive reconstruction effort in Ukraine that has already garnered the support of foreign multinational companies and financial giants such as BlackRock Inc., according to Sergiy Tsivkach, CEO of UkraineInvest, the Ukrainian government's investment-promotion office.

Speaking during a Wednesday press conference at the ReBuild Ukraine conference in Warsaw, Tsivkach noted that the aim of the Ukraine Development Fund -- launched with BlackRock (BLK) -- is to mobilize private investments. The fund has an initial focus on five sectors of the Ukrainian economy: energy, infrastructure, agriculture, manufacturing and IT.

"UkraineInvest is working separately as well with a number of U.S. investment funds and investment companies to establish private-equity funds for different sectors of the economy," Tsivkach said. These include logistics, real estate, agri-processing -- transforming a raw agricultural product into another product -- and, possibly, dual use of equipment for different parts of the Ukrainian economy.

Related: Ukraine wants U.S. investment firms to invest and create jobs in small businesses amid war in the country

"These are smaller initiatives -- they range between $250 million to $500 million," Tsivkach said, adding that the investment firms are "very active" and are looking for investment portfolios.

Job creation is a key part of Ukraine's overseas investment push. Ukraine has lost about 3.5 million jobs since the Russian invasion in February 2022, according to Tsivkach.

UkraineInvest was created by the Ukrainian government in 2016 to attract foreign direct investment and to help existing investors expand their businesses in the country.

Related: 'Ukraine is open for business': Western companies urged to be part of country's recovery

Companies that have announced investments in the war-torn country include Nestlé (CH:NESN), consumer-goods giant Unilever (NL:UNA) (UK:ULVR), brewer Carlsberg and Irish building-materials company Kingspan (IE:KRX) (KGSPY).

Speaking during Wednesday's press conference, Kingspan project director Mike Stenson said the company plans to build a manufacturing facility in western Ukraine, its first in the country. Kingspan is making a $300 million investment on a 50-hectare (124-acre) site close to Lviv, he said. "We will end up employing 700 people," he added, noting that more than 95% of the workforce, including leadership, will be hired locally.

Earlier this year, the government of Ukraine, the World Bank Group, the European Commission and the United Nations reported that the estimated cost of reconstruction and recovery in Ukraine has grown to $411 billion. Ukraine's reconstruction and recovery cost is 2.6 times the country's estimated 2022 gross domestic product, according to those organizations.

-James Rogers

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11-16-23 1013ET

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