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A former Ukrainian soldier is seen at the Superhumans Rehabilitation Center in Lviv, Ukraine, on February 19. The U.S. International Development Finance Corporation (DFC) has committed $25 million to the hospital to provide medical treatment, prosthetics, and physical therapy to severely injured people. Wounded in the Russian War. Andre Alves – Anadolu – Getty Images
Since Russia began escalating its attacks on Ukraine two years ago, the United States has shown continued support for the Ukrainian people and worked closely with allies to provide Ukraine with the resources and weapons it needs to succeed. . We will do everything we can to ensure that these efforts continue, not only to ensure that Ukraine does not lose, but to ensure that Ukrainians win and secure the future of a free, democratic and independent country. you need to do.
In addition to humanitarian and security assistance, Ukraine’s success now and in the future requires other efforts. Although it may not make much news, support for the country’s private sector is critical to Ukrainians’ fight against Russian aggression. Ukraine’s vibrant private sector is equally essential to the country’s eventual recovery.
Access to private capital is the key to economic growth. It’s the lifeblood of business. What is true in times of peace is especially true for countries defending themselves from brutal invasions. These beliefs guide the work of the organization I lead, the U.S. International Development Finance Corporation (DFC), and our enduring commitment to Ukraine.
We were in Ukraine well before the war, with investments of more than $800 million across various sectors. Since the full-scale invasion in 2022, the DFC has accelerated efforts to mobilize private capital and support Ukrainian companies in the agriculture, small and medium-sized enterprises, energy and health sectors. DFC plans to stay in Ukraine for as long as necessary in the future.
The DFC could not and did not wait for this conflict to end and the reconstruction of Ukraine to begin. To keep Ukrainians employed and to ensure that the private sector continues to pay taxes and produce essential goods and services, the DFC will make full use of its tools, including loans, political risk insurance, technical assistance grants, and equity investments. It helps maintain economic activity. to go. Using these tools, and often in collaboration with our fellow development finance institutions, we are working to pivot and make Ukraine’s economic decline shallower and, ultimately, its climb to recovery more gradual. I’m here.
The majority of Ukrainians work in small and medium-sized businesses, many of which needed access to financing during the war to stay in business and contribute to the economy. That’s why one of DFC’s first and most important efforts was to work with USAID to provide loan guarantees to Ukrainian banks and help strengthen lending to small and medium-sized businesses. In fact, after the start of the war, our first loan guarantee program for banks in Western Ukraine was fully utilized, with approximately 500 new loans made to Ukrainian businesses, totaling approximately $19 million. did.
These loans could be transformative for small businesses looking to cope with the effects of a war-torn economy. Since then, we have agreed a new, larger program for the bank and approved two similar schemes at other banks, bringing the total of DFC’s loan guarantee portfolio supporting small and medium-sized enterprises in Ukraine to his It exceeded 100 million dollars. There’s more DFC can do here. We will continue to explore further ways in Ukraine to support small and medium-sized enterprises, which are the engine of every dynamic economy.
Even those companies that were able to adapt their operations to wartime conditions found it difficult to fully protect themselves from the chilling effects of Russian aggression. One example is a large Ukrainian poultry and grain production company that continued to make profits throughout the war. Like many other large companies, the company relied on international capital markets for access to financing. As debt matured and public markets closed as a result of the war, DFC stepped in to fill the gap, providing a $250 million loan and working with partners from the European Bank for Reconstruction and the European Reconstruction Bank. Contributed to a total funding package of $480 million. Development and the International Finance Corporation (IFC).
DFC also committed $25 million to hospitals that provide medical treatment, prosthetics, and physical therapy to those injured in the Russian War. The aptly named “Superhuman Center” focuses on preparing patients to once again contribute to society. We are supporting this medical center with political risk insurance (PRI) for investors. This is a financial product that helps reduce investment risk and builds the most needed investor confidence. The United States has used the PRI for decades to support European and other economies, and in the coming months hopes to expand the use of this authority in Ukraine, particularly in insurance coverage for losses from war risks. I believe.
The resilience of the Ukrainian economy reflects the resilience of the Ukrainian people. Despite wartime immigration and deliberate attacks on the nation’s critical infrastructure, some sectors of the economy are growing, such as technology. Over the past two years, we have seen what Ukrainians can achieve when they are motivated to shape their own destiny and protect their freedom. To make a future free of war and aggression a reality for the Ukrainian people and to keep our economy moving today, Ukraine needs private capital. DFC is preparing a suite of tools to de-risk private investments, mobilize private capital, and support the strength of Ukraine’s vibrant private sector.
Scott Nathan is CEO of the U.S. International Development Finance Corporation (DFC). He was appointed by the President and formally sworn in by the Vice President on February 22, 2022, the day Russia began its full-scale invasion of Ukraine..
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