The outbreak of the Russia’s Invasion has become an unprecedented challenge for Ukraine, however, despite a difficult economic situation the private sector is still resilient and capable of functioning.
This was the message Sergiy Tsivkach, executive director of UkraineInvest, delivered via video message to attendees of the CEE Summit which took place June 22 in Warsaw.
UkraineInvest is the Ukraine’s government investment promotion office, created in 2016 to attract foreign direct investment and assist existing investors to expand their businesses in Ukraine. The status of a candidate for EU membership and the need for reconstruction makes Ukraine attractive for foreign investors, according to Mr Tsivkach.
“Ukraine obtained the status of an EU candidate in June last year and we are confident in terms of movement on the way to the European integration. This positive decision symbolises Europe’s support for Ukraine and is a new impetus for Ukraine’s victory in the world,” he said.
Ukraine has implemented a variety of incentives to attract foreign direct investment, the most prominent among which is the programme for industrial parks where projects of more than €20 million of investment can receive state support of up to 30%.
“Private investors that are planning to develop an industrial park in Ukraine are entitled to receive full or partial compensation of interest rates on loans, non-refundable financing, compensation for connecting to energy grids as well as tax and customs incentives,” Tsivkach said.
The real estate and infrastructure sectors in Ukraine offer significant industry opportunities for both investors and entrepreneurs thanks to a robust legal framework, ongoing reforms and strategic location, he argued.
“Ukraine is well positioned to become a regional centre for real estate development and infrastructure investment. By capitalising on these opportunities we can contribute to Ukraine’s economic growth, connectivity, and quality of life of our citizens,” he said. “Many companies are currently interested in participating in Ukraine’s reconstruction which will become one of the largest construction projects of this generation. In the post-war future, expected access to new markets and rebuilding of infrastructure will increase demand from new international players and significantly improve Ukraine’s logistics and supply chain sectors.”
The warehouse market in Ukraine is considered to be a particularly promising sector for investors and developers, as it offers strong potential for growth and attractive returns once post-war recovery begins. The scale of investment required for Ukraine’s reconstruction will be substantial and will require blending of public and donor funding with private investments. Opportunity exists to develop innovative financing structures to mitigate risks and enable more private investment. A public-private partnership (PPP) mechanism is planned to be used as a way to restore the damaged and destroyed social, transport and other infrastructure.
“Infrastructure requires significant investments as well as improving the quality of services and bringing them closer to European standards, this creates many opportunities for private investment and PPPs,” Tsivkach said.
Please click on the video above to watch the full interview or listen to the podcast below.