For more resilience

For more than three years, Ukraine has been resolutely fighting against Russia’s war of aggression, which is illegal under international law. The Ukrainians have tolerated immeasurable suffering. Nightly rocket and drone attacks are a sad everyday reality in many cities – not just in the eastern part of the country. But while the war continues, life must go on, the economy must function, schools must remain open, and fields must be tilled. These aspects of life must remain intact if the daily needs for goods and services are to be met and even more suffering is to be prevented. KfW is supporting the country precisely in this regard.

KfW has been working closely with Ukraine on behalf of the German Federal Government since the 1990s. Back then, the main emphasis was on accompanying the transformation towards a modern, democratic state and an open economy. Now the focus has shifted to making Ukraine more resilient through civilian support – be it by restoring (social) infrastructure or creating economic prospects. Establishing a closer relationship to the EU also remains relevant.

With a portfolio currently totalling more than EUR 1.4 billion (as of June 2025), KfW is an important partner for Ukraine. In addition, KfW subsidiary DEG has been advising and supporting its customers from the Ukrainian private sector, particularly from the agricultural, IT and logistics sectors, on an ongoing basis since the start of the war and is supporting German companies in their investment projects via the “develoPPP” and "ImpactConnect" programmes.

KfW Development Bank’s current portfolio includes the three sectors of energy and nature conservation, sustainable economic development and vocational training as well as (social) infrastructure and services, including for internally displaced persons (IDPs) and host communities. The overall aim of KfW’s cooperation with Ukraine is the sustainable and resilient social and economic development of the country.

Russia is constantly carrying out targeted attacks against Ukraine’s energy infrastructure. Power lines, substations and power plants have been and continue to be hit and damaged primarily by night-time drone and rocket attacks, making constant repair work necessary. Electricity supply is essential for the economy and for people’s everyday lives. Electricity is needed everywhere, in agriculture, in businesses, but also in schools, hospitals and private households. It is also an important prerequisite for the country’s heat supply.

KfW’s current portfolio in the energy sector is mainly implemented with the state-owned energy grid operator Ukrenergo and via the Ukraine Energy Support Fund (UESF). In addition to repair work, Ukraine is also 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, made more energy-efficient and climate-friendly. Finally, KfW is also supporting Ukraine in connecting to the European electricity grid.

The life of people in Ukraine is significantly impacted by the war. Many Ukrainians had to and have to leave their homes due to the fighting. 3,6 million people, a quarter of which children, are currently displaced within their own country. This has led to a high demand for housing and municipal infrastructure. KfW is helping to meet this demand, especially for IDPs in host communities. The support includes education and social care for children and young people as well as psychosocial care. In addition, buildings are rehabilitated or converted into residential buildings, and low-interest loans for housing are made available. This allows people to finally have a place called home again.

In addition, KfW is making funds available for basic municipal infrastructure. Support covers cities and communities in large parts of the country. It includes, for example, the repair and modernisation of water and wastewater systems to ensure the security of supply for the local population and IDPs and to reduce the risk of diseases caused by pollution. In the city of Chernivtsi alone, this will improve the living conditions of 190,000 people. The financing of relevant social infrastructure also plays an important role. KfW has been cooperating with the Ukraine Social Investment Fund (USIF) for many years in this sector. Over the years, more than 500 sites and facilities throughout the country have been upgraded, modernized and refurbished to be more energy efficient and better equipped, including hospitals and health stations, kindergartens, schools and drinking water pipelines. Thousands of people benefit directly from this.

Keeping the economy running is a crucial precondition that allows people to live their lives as normal as possible despite the Russian attacks. In addition, the economy will also be able to recover more quickly once the fighting has ended if it is not coming to a complete standstill now. In this phase in particular, the private sector will play a decisive role in driving the country’s reconstruction forward. It is therefore important to support the economy in this acute time of crisis.

With the ongoing portfolio KfW cooperates with the Business Development Fund (BDF) in implementing a governmental economic promotion programme. The BDF provides low-interest loans primarily to small and medium enterprises, which include agricultural businesses, bakeries, food retailers and small logistics companies. On behalf of the German government, KfW, together with other international partners, is supporting BDF in its “Vision 2.0” to advance to a national development organization. Through two large regional funds – the Green for Growth Fund (GGF) and the European Fund for Southeast Europe (EFSE) – KfW is providing further financing to businesses, which is strengthening the local economy, also with regard to energy efficiency. The reconstruction, renovation and equippment of vocational schools is another important component of KfW’s portfolio. These schools provide young people with relevant skills for the labour market.

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

Energy and nature conservation: Ministry of Energy, Ministry of Environmental Protection and Natural Resources, Ukrenergo, Ukraine Energy Support Fund (UESF).
(Social) Infrastructure and services: Ministry for Development of Communities and Territories, Municipalities of Chernivtsi, Zhytomyr, Zaporizhzhia, Ukraine Social Investment Fund (USIF), State Fund for Support of Youth Housing (SFYH), IOM, UNICEF, Norwegian Refugee Council (NRC).
Sustainable economic development and vocational training: Ministry of Finance, Business Development Fund (BDF), Green for Growth Fund (GGF), European Fund for Southeast Europe (EFSE), IOM, USIF.

The cooperation also seeks to get war damage repaired quickly, modernise dilapidated infrastructure and to begin the process of reconstruction now. Whether it is power lines that are destroyed by attacks or buildings that are damaged, reconstruction cannot wait until the fighting is over. Instead, it must happen in parallel. To make this work, KfW is continuously adjusting its portfolio and adapting to new circumstances.

A reliable partner

KfW remains a close partner of Ukraine. It will continue to support the country in this difficult time, stand reliably by its side and take responsibility. This applies to strengthening Ukraine's resilience in the current war situation as well as to reconstruction and the process of rapprochement with the EU..

KfW at the Ukraine Recovery Conference 2025

This year, KfW is once again participating in the Ukraine Recovery Conference 2025 (URC2025), taking place on July 10–11 in Rome. The aim is to further intensify its longstanding support for Ukraine, especially during challenging war times. This time KfW focuses on strengthening the financial architecture for reconstruction financing. According to current estimates, the reconstruction of Ukraine could cost over EUR 500 billion depending on the course of the war—a huge amount that cannot be solely covered by public funds. Collaboration with the private sector and mobilization of private capital are crucial for the success of Ukraine’s recovery.

At last year's URC in Berlin, the Ukrainian government and the German Federal Government committed to developing the Ukrainian Business Development Fund into a national development institution, modeled after the KfW. This reform is being further advanced with additional funding of 40.5 million EUR for SMEs, which is provided to the BDF by KfW on behalf of the German Federal Government. One aspect that is particularly innovative is the establishment of a credit guarantee facility that will secure private investments and stimulate lending to micro, small, and medium-sized enterprises. KfW will continue to lead the transformation process of the BDF, with the adoption of a BDF law expected as the next milestone.
On behalf of the German Federal Government, KfW as the consortium leader has initiated the launch of a new European fund for the reconstruction of Ukraine at the URC 2025. The European consortium includes the governments of Germany, Italy, Poland, and France, their development banks, the European Commission, and the European Investment Bank (EIB). The jointly initiated fund aims to mobilize around one billion euro from private investors for Ukraine's reconstruction and to invest directly into private investment projects in strategic sectors of the Ukrainian economy. This includes rebuilding energy infrastructure, expanding wind and solar power to replace old coal power plants, industrial manufacturing facilities, and digital infrastructure like data centers.
The DEG signs new agreements under the ImpactConnect and develoPPP programmes, including the financing of a logistics project aimed at strengthening regional supply chains. This further enhances private sector activities that contribute to stabilising local economic structures.

Ukraine Recovery Conference 2025

Further Information

Financial Cooperation with Ukraine

Фінансова співпраця з Україною

Factsheet Ukrenergo

Business Development Fund (BDF)

The situation remains volatile - and we remain flexible

Interview with Lorenz Gessner, head of the KfW office in Ukraine, on the situation in Ukraine three years after the start of the Russian war of aggression.

Children sit and lie on their beds in a shelter at a kindergarten in Schytomyr.

Playing and learning during a state of emergency

In times of war, children need to be given a feeling of security and they need to be treated differently Kindergarten teachers are attending special trainings to learn the best ways for this.

A man in a suit is sitting at a desk looking into the camera. In front of him on the table are a German and a Ukrainian flag.

“The backbone of the economy”

Interview with Andrii Gapon, Chairperson of the Management Board of the Business Development Fund (BDF), on the state of the Ukrainian economy and the significance of the BDF.