Russian invasion one year later: A reflection on DFC’s support for Ukraine and its people
One year ago, Russia launched an unprovoked and horrific attack on Ukraine. The Ukrainian people have shown their bravery and resolve in fighting back against this incursion. The United States government, including the U.S. International Development Finance Corporation (DFC) has stood and will continue to stand with Ukraine today and into the future. The agency has made clear our unwavering support for the nation and its people. DFC was active in Ukraine before the war, is active in the country today, and will remain active for the long term.
The World Bank estimates show that Ukrainian GDP shrank by 35 percent in 2022. Support from countries around the world and multilateral institutions is necessary during these uncertain and troubling times for Ukraine and its people.
On travel to Lviv in December and Kyiv in January, DFC CEO Scott Nathan made clear the importance of engaging Ukrainians on immediate and long-term needs, as well as our sustained commitment to use all available financial tools to support the country, its people, and its economy.
It means investing in small businesses, repairing health systems, responding to agricultural needs, exploring ways to help restore energy infrastructure, and working with other development finance institutions and multilateral development banks to identify potential opportunities to rebuild large-scale infrastructure. The myriad development and economic challenges necessitate working on a faster timeline while continuing to ensure investments meet high standards of transparency and governance.
On his trip to Kyiv in January, CEO Nathan made several announcements to further investment in Ukraine. First, DFC will work to mobilize at least $250 million this year to help increase lending to small businesses, which have been hard hit but are the backbone of the economy. These investments will help Ukrainian-owned and Ukrainian-led businesses continue operations and keep fellow citizens employed. To achieve this goal, we will work closely with the Ministry of Economy of Ukraine and USAID to leverage resources to assist banks in preparing compelling applications and conducting important project diligence, helping to accelerate investment.
No one country or group of countries will be able to afford the costs of reconstruction alone. The global private sector has a crucial role to play, and DFC can help mobilize investment and development. To help with this, DFC announced it would also work to attract at least $1 billion in private sector capital to support Ukraine’s economy.
In response to the announcements, Prime Minister Denys Shmyhal said, “The Government of Ukraine is grateful to DFC for the assistance provided and is ready to make the necessary efforts to further develop this cooperation. Becoming part of Ukraine’s recovery today is the most powerful investment in the future.”
The agency continues to identify potential projects for investment and continues to work with its U.S. government partners and Ukraine to effectively and efficiently do so.
These latest commitments come after two investment announcements during December’s trip to Lviv. The first supports small businesses, especially in the hard-hit agricultural sector, which has in turn led to greater food insecurity in the country and abroad. Working with Bank Lviv, supported by USAID, loans are going to small businesses in the western part of the nation to support a variety of small businesses, including agribusinesses and smallholder farmers.
Of the partnership, Ashot Abrahamyan, Chief Executive Officer of Bank Lviv, said, “We are proud to be a part of the strategic partnership among our institutions, and we believe that together we will contribute significantly to the Ukrainian economy’s resilience.”
DFC is also ensuring young Ukrainians remain connected to educational opportunities through a grant for the Ukrainian Catholic University to increase course offerings, including online education. The grant builds on a loan DFC provided the university in 2019 for a building on campus that has helped house internally displaced people.
We will stand with Ukraine and support them throughout these difficult times, and we look forward to continuing to invest to strengthen the country today and into the future.
“We are committed to supporting the private sector in Ukraine,” DFC CEO Scott Nathan said during a December 2022 visit to the country. “We were here before the war. We are here now, and we will be here after this horrible and illegal war ends.”