The Government of Ukraine announces its plan to launch a Ukraine Development Fund, to create opportunities for public and private investors to participate in the future reconstruction of the Ukrainian economy
KYIV, May 6, 2023 - The Government of Ukraine today announced its plans to launch a national development finance institution, the Ukraine Development Fund (“UDF”). The announcement is an important milestone for Ukraine and a tangible step towards the establishment of a national institution that will be critical in the reconstruction of Ukraine after the war.
The UDF will mobilize and attract public and private capital into the reconstruction of Ukraine by using a range of innovative and traditional financial instruments. The structure will comprise a multi-layered approach guided by strong governance and global standards for sound financial and risk management practices.
The UDF will target key sectors of the Ukrainian economy including energy, infrastructure, agriculture, manufacturing, and IT. The Fund will contribute to Ukraine’s efforts to build back the economy in line with best practices and become a key partner to the global community in the low carbon transition.
The Ukrainian Ministry of Economy has appointed BlackRock’s Financial Markets Advisory Group (“BlackRock FMA”) to provide advisory services in support of the design of the UDF, on a pro bono basis. This reflects the continued partnership between BlackRock and the Ukrainian Government after the initial signing of a Memorandum of Understanding (“MoU”) in November 2022.
The BlackRock appointment was discussed on May 5, 2023 in Kyiv, Ukraine at a meeting between Ukraine’s President Volodymyr Zelenskyy and a senior BlackRock delegation, led by Vice Chairman Philipp Hildebrand.
President Volodymyr Zelenskyy said: “Since independence, Ukraine has never seen truly large and strategic private capital come to Ukraine in volumes that would match the country's scale and capabilities.”
According to him, Ukraine is engaging the best financial and consulting organizations globally, including BlackRock, JPMorgan Chase, McKinsey and others, to ensure the transparency and success of the project.
“The launch of the fund is a strong signal that will strengthen the investment climate. It will allow us to attract capital and start active economic recovery and construction of new businesses immediately after the active hostilities are over”, Volodymyr Zelenskyy said.
Charles Hatami, who oversees BlackRock FMA in his capacity as Global Head of the Financial and Strategic Investors Group (FSIG), said: “BlackRock is honored to be assisting the Ukrainian people by advising their government on the launch of the Ukraine Development Fund. The reconstruction of the country will create significant opportunity for investors to participate in rebuilding the economy. The investment challenge facing Ukraine in the coming years will be enormous, and it will only be through the close cooperation of public and private capital that we will be able to address the scale of funding needed.”
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