Ukraine gets biggest private investment since war began

Western financial institutions are supporting a $400 million telecom deal in Ukraine - the biggest private sector investment since Russia invaded the country roughly two-and-a-half years ago. This deal is seen as a ray of hope for Ukraines war-damaged economy.

The European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC) are each giving $217.5 million in long-term loans to a group of investors. This group is led by NJJ‚ a telecom company owned by Xavier Niel‚ a French businessman.

Odile Renaud-Basso‚ EBRD President‚ told The Washington Post “There are challenges - but there are also opportunities“ in putting money into Ukraine. She added “In the long term investing in the country makes sense“

The deal joins Lifecell (Ukraines third-biggest mobile company) with Datagroup-Volia (a fixed-line network). This new company aims to make the mobile network stronger and faster - which is really important during war when good communication is key.

Tymofiy Mylovanov‚ who runs the Kyiv School of Economics‚ thinks this deal is a good sign. He said:

If [investors] see that others are buying thats social proof or business proof that someone has done their due diligence‚ the regulatory framework worked out‚ the financing is there - that you can buy things in Ukraine and you can invest in Ukraine And frankly thats exactly what Ukraine needs - it needs some confidence

But Ukraine still faces big problems. Its economy got smaller by almost a third in 2022‚ the wars first year. Even though its grown a bit since then‚ the country still needs lots of help from the West to pay for things like healthcare and pensions.

The deal had been planned since 2021 but was put on hold when the war started. It got going again in 2023 after a Kyiv court unfroze some shares held by a Russian businessman.

Not many outside investors are jumping into Ukraine right now. Most money being spent comes from companies that were already there before the war. Aivaras Abromavicius‚ who used to be Ukraines economics minister‚ said:

• Whoever is doing well keeps investing
• Business has adapted to extremely challenging situations
• The biggest ones are just the physical safety of your assets and your employees
• Second is the loss of personnel to the military ranks

Even though there are chances to make money in Ukraine (in areas like farming telecoms defense and building)‚ the risks are high too. As one European diplomat put it: “Its a land of opportunities But‚ of course‚ you can get burned here easily also You have to be very careful“