For more resilience

For more than four years, Ukraine has been resolutely defending itself against Russia’s war of aggression. Ukrainians continue to endure immeasurable suffering; nightly rocket and drone attacks are a sad everyday reality in many cities. Yet life must continue: the economy must function, schools must stay open, and fields must be tilled. Maintaining these basic services is essential to meet daily needs. At the same time, it is important to repair war damage quickly, modernise dilapidated infrastructure and begin the process of reconstruction now. Whether it is power lines that have been destroyed by attacks or buildings that have been damaged, reconstruction cannot wait until the fighting is over. Instead, it must happen in parallel – in line with modernisation and reforms that are crucial for Ukraine’s path towards EU integration. On behalf of the German Government and the EU, KfW is supporting the country in these efforts.

KfW's contribution at a glance:

The figure shows two pie charts. First: Financial Volumes by sector – energy and nature conservation, followed by housing, (social) infrastructure and services account for the largest share of the portfolio. Second: Financial Volumes by client: BMZ is the largest donor with a share of two-thirds, followed by BMWE and the EU.

Russia continues to target Ukraine’s energy infrastructure. Power lines, substations and power plants are repeatedly damaged by drone and rocket attacks, requiring constant repairs. Electricity is needed everywhere, in agriculture, businesses, schools, hospitals and private households. It is also an important prerequisite for the country’s heat supply.

KfW’s energy portfolio is implemented primarily in cooperation with the state grid operator Ukrenergo and the Ukraine Energy Support Fund (UESF). In addition to repair work, Ukraine is increasing the resilience of its electricity grid against Russian drone attacks, for example through physical protection such as concrete shelters. At the same time, the grid is being modernised and made more energy efficient. Public and private energy companies are being enabled to accelerate decentralised and renewable energy solutions. With a view to EU integration, KfW is supporting Ukraine in connecting to the European electricity grid. KfW also continues to assist the Ukrainian government in long-term efforts to mitigate climate change and protect biodiversity.

The war has profoundly affected civilian life. Millions have fled their homes: 3.4 million people are internally displaced, about one quarter of them are children. Some 14% of Ukraine’s housing stock has been damaged or destroyed, creating severe demand for housing and municipal services.

KfW helps to address these needs. In partnership with the Ukraine Social Investment Fund (USIF) and the International Organization for Migration (IOM), KfW finances the construction, rehabilitation and conversion of social and affordable housing. Through the State Fund for Youth Housing (SFYH), low interest loans are available for internally displaced people (IDP), helping families regain a stable home.

KfW finances basic municipal infrastructure across many cities and communities, for example repairing and modernising water and wastewater systems to secure supply and reduce the risk of waterborne diseases. In Chernivtsi alone, this will improve living conditions for about 190,000 residents. Social infrastructure is another priority: in cooperation with USIF, more than 500 sites nationwide were upgraded — kindergartens, schools, hospitals and primary health care stations — making them more energy efficient and better equipped. Future projects include clinics for women’s health and rehabilitation centres. Hundreds of thousands of people benefit directly from these measures. In addition, communities in 25 hromadas are directly involved in identifying and implementing local infrastructure priorities, such as fire stations or veteran support hubs.

The partnership with UNICEF ensures early childhood development and uninterrupted education for children and young people. A dedicated response to gender based violence (GBV) and violence against children (VAC) provides coordinated, survivor centred services and prevention. UNICEF’s winter response helps alleviate water and heating shortages during the harsh winter.

Keeping the economy running is essential to maintain normal life under attack and to enable a faster recovery once fighting subsides. The private sector will be decisive for reconstruction, so supporting businesses while advancing reforms is crucial.

To enable a new start, grants, training and peer support are provided to IDPs through IOM; more than 40% of supported small businesses are women led. The National Development Institution (NDI, formerly Business Development Fund) enables micro, small and medium-sized enterprises to gain access to low interest loans and energy efficiency finance. In the future, Ukrainian firms will also be able to buy equipment from German and EU suppliers on preferential terms to boost industrial recovery and resilience under the Industrial Ramstein initiative. At the institutional level, KfW supports NDI in its reform process (“NDI Vision 2.0”) to build a strong, autonomous public finance institution with access to international capital markets.

Further financing is channeled to Ukrainian businesses via regional funds such as the Green for Growth Fund (GGF) and the European Fund for Southeast Europe (EFSE), focusing on sustainable growth, CO₂ reduction and energy security.

KfW acts as a lead financier in creating the European Flagship Fund for the Reconstruction of Ukraine in a consortium consisting of the EIB, BGK (Poland), CDP (Italy), and Proparco (France). The fund enables private sector investments in Ukraine with a focus on modernised and resilient infrastructure. EIB, CDP, KfW, BGK and Proparco will all invest in the Junior Tranche of the fund, partly on behalf of the European Commission, partly on behalf of their respective governments. The Junior Tranche provides first loss protection and thus aims to mobilise private capital to scale the fund up to 1 billion EUR. The investments financed will offer economic opportunities for European enterprises and support Ukraine’s integration into the EU’s common market.

Reconstructing, renovating and equipping vocational schools is another major pillar. These schools train more than 30,000 young people with skills relevant for the labour market.

KfW is supporting Ukraine on behalf of the German Federal Government - particularly the Federal Ministry for Economic Cooperation and Development (BMZ), the Federal Ministry for Economic Affairs and Energy (BMWE) and the Federal Ministry of Finance (BMF) - and on behalf of the EU. It can draw on long-standing cooperation with various state, non-state and international partners in Ukraine:

Energy and nature conservation: Ukrenergo, Ukraine Energy Support Fund (UESF).

Housing (social) infrastructure and services: Ukraine Social Investment Fund (USIF), State Fund for Support of Youth Housing (SFYH), Municipalities of Chernivtsi, Zhytomyr, Zaporizhzhia, IOM, UNICEF, Norwegian Refugee Council (NRC)

Sustainable economic development and vocational training: National Development Institution (NDI), USIF, IOM, Green for Growth Fund (GGF), European Fund for Southeast Europe (EFSE), European Flagship Fund for the Reconstruction of Ukraine

The Government of Ukraine, particularly the Ministry of Finance, Ministry of Economy, Environment and Agriculture of Ukraine, Ministry of Energy, Ministry for Development of Communities and Territories, Ministry of Health