Ukraine

Installations for production and transport of electricity and heat are largely outdated. Compared to Europe, the use of energy in public and private buildings as well as businesses is highly inefficient, notwithstanding an increasing awareness of the need for change. This leads to considerable ecological problems as well as to high costs in order to meet the energy demand. On behalf of the German Federal Government, KfW supports a more efficient use of energy in three areas: 1. modernisation of substations for efficient power transmission and integration into European networks; 2. energy-efficient renovation of public buildings and public transportation systems in the cities of Kharkiv, Zhytomyr and Saparoshije; and 3. promotion of investments to increase energy efficiency in small and medium-sized enterprises.

Small and medium-sized enterprises are important drivers for an economic development that shows broad impact. But they face many obstacles, such as a difficult access to finance for investments. Therefore KfW Development Bank supports several programmes for the Ukrainian banking sector. One important instrument within this context is the Business Development Fund (BDF), which was founded in 1996 together with the Ukrainian Ministry of Finance and the Ukrainian National Bank. Up to now, more than 163,000 loans have been channeled to small and medium-sized enterprises via the BDF.

The modernisation of vocational education and training is an important factor in furthering Ukraine's sustainable economic development and competitiveness on the international market. In addition to reforming the vocational training system, the renewal of the infrastructure plays a central role. KfW will promote vocational education and training in Ukraine by investing in buildings and equipment as well as setting up a training system that is tailored to meet market needs.

Following decentralisation, municipalities play an ever more decisive role in Ukraine. In order to strengthen them, KfW Development Bank has been cofinancing the Ukrainian Social Investment Fund (USIF) since 2000. USIF implements infrastructure projects together with the direct beneficiaries and municipal administrations. Amongst others, kindergartens and schools are renovated and expanded. In the wake of the COVID-19 pandemic, USIF is also supporting urgently needed interventions in the health sector, which is under great strain. In order to sustainably improve the quality of service for citizens, KfW is also investing on behalf of the Federal Government in the rehabilitation of municipal infrastructure, such as the water and sewage system of the traditional university town of Chernivtsi in Western Ukraine. In addition, municipalities with a high proportion of resident internally displaced persons are also supported in increasing the available housing space and in expanding their social services. In the Kharkiv Oblast in the north-east of the country, KfW promotes investments with funds from the German Federal Government and the EU in a regional approach focusing on drinking water supply in the city of Kharkiv as well as the rehabilitation of the sewage systems of the small towns of Bogodukhiv and Chuguev.

Project Information – Social Infrastructure (PDF, 148 KB, non-accessible)

As a consequence of the conflict in the East of Ukraine and the annexation of the Crimea by Russia more than 1.5 million people fled to the area controlled by the Ukrainian Government. KfW finances measures for facilitating the integration of these internally displaced persons into their host communities as well as for building up new livelihoods. This support is implemented in cooperation with various partner ministries and UN-organisations. Activities include, for example, a programme providing vocational training and small grants for business start-ups. Additionally, concessional loans for the purchase of flats shall be provided. To mitigate the economic impact of the COVID 19 pandemic, funds are also being used to maintain and expand employment.

Within the European context, Ukraine’s biodiversity is exceptionally high. It includes beech forests which are part of UNESCO World Heritage, extensive wetlands and high moors, steppes and environmentally valuable coastal and maritime areas. The Government of Ukraine strives to meet its international obligations concerning the preservation of biodiversity, however, budgets are tight. On behalf of the German Federal Government, KfW Development Bank supports the Ukrainian Government in improving the management of priority protected areas, focusing on the Carpathian region.

Project Information – Environment (PDF, 277 KB, non-accessible)