Support for a resilient Ukraine

Russia has been waging a war of aggression against Ukraine for two years, which the country is resolutely fending off. At the same time, the economy must continue to run, fields must be cultivated, health centres must operate and children must go to school. The people there also need a roof over their heads that is as safe as possible - and prospects for the future. Parallel to the war, KfW is therefore helping to cover daily needs and at the same time working to rebuild the country.

For more than 730 days there have been Russian attacks on houses, power lines and schools: The war is now in its third year and has left deep scars in Ukraine. This affects the people just as much as the damage to the infrastructure. At the same time, the income of the Ukrainian state is far below pre-war levels. The need for support is correspondingly high.

This makes it all the more important to maintain state functions as far as possible and not to leave the people alone in this difficult overall situation. This is precisely where KfW is supporting the country on behalf of the German Federal Government and the EU with ongoing projects currently totalling more than EUR 1.4 billion. "KfW has been one of Ukraine's most important partners in promoting sustainable, resilient, social and economic development for decades. In the past two years alone, KfW has committed more than EUR 1.2 billion to Ukraine on behalf of the German Federal Government and the EU," says Office Director Lorenz Gessner, emphasising KfW's commitment. They cover the sectors of energy and nature conservation, support for internally displaced persons and host communities, including child and youth development, basic municipal social infrastructure as well as sustainable economic development and vocational training.

Ensuring energy supply

One focus is on the energy sector. Power lines, substations and power plants have been targeted time and again, meaning that permanent repair work is needed to maintain the power supply and therefore also the electricity supply. Electricity is needed everywhere and is, for example, also a prerequisite for the supply of heat, for school lessons or for agricultural activities in Ukraine.

KfW's current portfolio here comprises more than EUR 520 million, which is being implemented primarily with the state energy company Ukrenergo and other international partners via the Ukraine Energy Support Fund. At the same time as the substantial repairs, the power grid is also being rehabilitated, made more energy-efficient and climate-friendly and made more resilient to Russian drone attacks, for example through physical protection devices such as concrete housings. The KfW projects are also supporting Ukrenergo in connecting to the European power grid.

Caring for internally displaced persons

Due to the war, many people in Ukraine have been forced to leave their homes and often their home region - sometimes permanently. Almost four million people, including one million children, are currently displaced within the country. This has created a high demand for housing and municipal infrastructure, which KfW is helping to cover.

A second focus of KfW promotion is therefore on housing programmes for internally displaced persons and host communities. This also includes educational and social care programmes for children and young people as well as family-centred psychosocial support for those affected.

Low-interest loans are also being granted to future homeowners for the reconstruction and renovation of existing buildings. The repayments can be used again and thus help other people to obtain a loan and become homeowners. The total volume of this subsidy amounts to more than EUR 530 million.

Providing basic infrastructure

In addition to this, KfW also provides funding for basic municipal infrastructure. The commitment extends to cities and municipalities in large parts of the country. It includes, for example, the repair and modernisation of drinking water pipelines in order to guarantee the security of supply for the local population and to reduce the risk of diseases caused by contamination.

However, this also includes the financing of relevant social infrastructure. For example, kindergartens, schools, hospitals and outpatient clinics are equipped and renovated to make them more energy efficient. KfW is currently active in this area with a total value of around EUR 135 million.

Stabilising the economy

In addition, aid for Ukraine includes various projects to promote the economy. This will keep the country going and will also be able to recover more easily in the post-war period if it does not completely lose its vigour now. In addition, the private sector will play a crucial role in the reconstruction phase. It is therefore important to promote it now in this acute time of crisis.

Small and medium-sized enterprises in particular make a decisive contribution to the functioning of daily life, securing jobs, services and the production of important goods. KfW, for example, is supporting a state economic programme through its long-standing partner Business Development Fund (BDF), which provides low-interest loans to such companies. This means that agricultural businesses, bakeries, grocery shops and even small logistics companies can receive loans.

KfW's support is also aimed at internally displaced persons so that they can build a livelihood in their new place of residence. This also includes the reconstruction, renovation and equipping of vocational schools to teach young people skills relevant to the labour market and thus open up economic prospects for them. KfW supports further sustainable financing in Ukraine via two large regional funds (the Green for Growth Fund (GGF) and the European Fund for Southeast Europe (EFSE), thereby strengthening the local economy, among other things. KfW's portfolio in this sector totals almost EUR 250 million.

KfW remains a close partner to Ukraine

KfW will continue to support Ukraine on behalf of the German Federal Government and the EU and stand by its side as a reliable partner - also with regard to reconstruction and the EU rapprochement process that has already begun. KfW can build on many years of experience - it has been involved in Ukraine since the 1990s and relies on a broad network of partners. These include, in particular, Ukrainian ministries and other state partners as well as international organisations and institutions such as the World Bank, the International Organisation for Migration (IOM) and the United Nations Children's Fund (UNICEF). They all work together in a spirit of trust and pursue one goal: to strengthen Ukraine's resilience and enable as much normal life as possible despite the Russian attacks.