The finance ministries of Ukraine and Germany have signed a joint Declaration of Intent to boost bilateral cooperation in support of Ukraine’s post-war reconstruction efforts.
Ukraine’s Minister Serhii Marchenko met with his German counterpart, Christian Lindner, on 11 June at the Ukraine Recovery Conference 2024. They formalized their intent to support the institutional development of Ukraine’s Business Development Fund. The conference, which took place in Berlin, gathered government officials, companies, and organizations to discuss Ukraine’s ongoing reconstruction needs, focusing primarily on energy infrastructure.
According to Ukraine’s Finance Minister, the declaration outlines Germany’s commitment to aiding Ukraine’s Ministry of Finance in supervising and coordinating national development institutions. It also promises advisory assistance to the Business Development Fund during its institutional reform process.
“We are not limiting ourselves to the form of support that Ukraine needs to win the war,” said German Finance Minister Christian Lindner. “We want to contribute now so that Ukraine can set the course for future growth through its reconstruction.”
Lindner emphasized that the cooperation extends beyond financial resources, aiming to build institutional capacities to support private companies in Ukraine and promote investment.
The German finance ministry has commissioned the KfW Development Bank to assess the feasibility of a financing consultancy project to support Ukraine’s finance ministry.
The project could also support the Business Development Fund, transforming it into an independent state financing institution focused on Ukrainian small and medium-sized enterprises (SMEs).
The German finance ministry will finance the capacity development project, with the KfW Development Bank overseeing its implementation.
“Expert and financial support from KfW allows us to continue providing Ukrainian businesses with affordable financing, which contributes to the economic recovery in the context of the russian full-scale war,” Ukraine’s Minister Serhii Marchenko
The partners expect to sign the underlying agreements by the end of the year, after which the declaration will take effect.
Marchenko acknowledged Germany’s substantial budgetary financing of over EUR 1.5 billion since 24 February 2022, with 80% coming in the form of grants. According to the minister, this has played a crucial role in maintaining Ukraine’s macro-financial stability during Russia’s ongoing aggression.
Lindner reaffirmed Germany’s dedication to supporting Ukraine, particularly in its recovery efforts.
“Thanks to the signed agreement, cooperation between Ukraine and Germany is getting a new boost, which will help strengthen Ukraine’s institutional capacities,” he stated.
The Business Development Fund, a vital institution supporting micro, small, and medium-sized enterprises in Ukraine, has provided approximately UAH 321 billion ($ 7.9 billion as of 1 January 2024) in business support through various financial instruments.
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