One billion euro in private capital expected for equity investments to rebuild Ukraine

In July 2025, KfW, acting as leader financer on behalf of the German Federal Government, greenlit the preparations of a new European fund for the reconstruction of Ukraine at the Ukraine Recovery Conference in Rome. The European consortium consists of the governments of Germany, Italy, Poland and France, their development banks, the European Commission and the European Investment Bank (EIB).

Now, the next step has been successfully completed: Fund managers Amber Infrastructure from the United Kingdom and Dragon Capital, a leading Ukrainian private equity manager, won a Europe-wide market sounding process with their investment concept. KfW, EIB and four other European promotional banks will now undertake a due diligence of the concept with the aim of launching the European fund for the reconstruction of Ukraine in summer 2026.

This joint fund is intended to mobilise capital from public development banks and private investors of over one billion euros for the reconstruction of Ukraine and to invest directly in private investment projects in strategic sectors of the Ukrainian economy. Amongst others, this involves the reconstruction of energy infrastructure, the expansion of wind and solar power to replace old coal-fired power plants, industrial manufacturing facilities and digital infrastructure such as data centres.

‘With the new European fund for the reconstruction of Ukraine, KfW is sending a signal to private investors,’ said Christiane Laibach, KfW Executive Board Member for International Financing. "The fund lowers the risk for private investors even during the war, thus offering an attractive investment opportunity. Even today, infrastructure investments are feasible and we cooperate closely with the EU, European countries and the private sector." This lays the foundation for deeper trade relations with Ukraine in the future.

The World Bank estimates the cost of rebuilding Ukraine at 524 billion US dollars. According to Laibach, a sum of this magnitude can only be raised with the help of private investors.

Within the fund structure, KfW and the other public investors will capitalize the so-called first loss tranche. In aggregarte, the donors contribute up to 220 million euros to this risk buffer, thereby reducing the risks for private investors.

On this basis, the fund aims to raise further capital from private investors. The target for 2026 is 800 million euros. If the security situation improves, the volume is expected to grow to over 1 billion euros by 2027/2028.

As an anchor investor, the fund will provide equity capital for project companies and enterprises, enabling them to raise further equity and debt capital at project level. With a volume of one billion euros, the fund will enable investments of around six to seven billion euros.

The fund is to be launched at the Ukraine Recovery Conference in Poland this summer and will commence its investment activities immediately afterwards.

KfW is one of the largest investors in first-loss tranches worldwide.

Further information on KfW's involvement in Ukraine can be found at:
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