Ukraine, US shortlist investment projects worth over $1.2 billion for groundbreaking reconstruction fund
Ukraine and the United States have shortlisted 22 potential projects for a major investment fund launched two months ago, including eight that make up an estimated $1.2 billion portfolio.
The U.S.-Ukraine Reconstruction Investment Fund narrowed down the candidates after sifting through 138 submissions, Ukraine’s Economy Ministry announced on March 2. Of those selected for further consideration, eight are investment-ready – worth an estimated $1.2 billion.
The value of the remaining 14 proposals hasn't been calculated yet, the Economy Ministry's press department told the Kyiv Independent.
The highly competitive fund has attracted both domestic and foreign investors. Last month, the majority of proposals, 62%, came from the energy and energy security sector, followed by transport and logistics infrastructure – 16%, critical minerals – 12%, and advanced technologies and telecommunications – 8%.
The ministry previously said it aims to launch three projects within the fund’s first 18 months of operation.
"I would not be surprised if it turns out that this Fund was created in record time, and this in itself is a result," Yegor Perelygin, deputy economy minister and head of the investment department, said in the press release.
"The number of applications submitted and the interest from international investors confirm the main thing: Ukraine has significant unrealized investment potential, and we are already seeing how it is being transformed into specific reconstruction projects."
The fund is the result of last year’s negotiations between Washington and Kyiv for a minerals deal. It launched an online portal for proposals in January, eight months after the deal was signed.
It was jointly developed by the U.S. International Development Finance Corporation (DFC), a U.S. government-backed investment agency, and Ukraine’s Economy Ministry. In the first month, it saw over 60 submissions, including 37 from Ukrainian companies.
The deal offers American and other foreign companies access to investment projects in Ukraine that meet Washington’s political goals and Ukraine’s economic and political needs.
The war-ravaged country will need at least $588 billion to recover, the World Bank said in a report published Feb. 23, as Russia's full-scale invasion enters its fifth year.
For the first 10 years, all profits from the fund will be reinvested in Ukraine's economy, with Kyiv and Washington allocating $75 million each in seed capital last September.
During a briefing in Kyiv last month, a senior U.S. official said that the energy sector is a high-priority area. Ukraine’s energy facilities have been left battered and bruised as Russia bombs power plants, substations, and gas facilities, triggering a nationwide energy crisis.
While refraining from mentioning specific companies or assets, the official pointed to new energy generation and transmission projects as well as the extraction of hydrocarbons like natural gas.
"Investing in private equity, and particularly in infrastructure, is difficult. Doing it in a war zone is even more difficult. It's going to take a lot of hard work from a lot of serious professionals to get there,” the official said on Feb. 2.
