For more resilience

For more than three years, Ukraine has been resolutely fighting against Russia’s war of aggression. The Ukrainians are tolerating immeasurable suffering, nightly rocket and drone attacks are a sad everyday reality in many cities. But while the war continues, life must go on: the economy must function, schools must remain open, and fields must be tilled. These aspects of life must remain intact if the daily needs for goods and services are to be met. At the same time, it is important to repair war damages quickly, modernise dilapidated infrastructure and to begin the process of reconstruction now. Whether it is power lines that have been destroyed by attacks or buildings that have been damaged, reconstruction cannot wait until the fighting is over. Instead, it must happen in parallel – in line with modernisation and reforms that are crucial for Ukraine’s way towards the EU. KfW is supporting the country precisely in this regard

KfW's contribution at a glance:

The figure shows two pie charts. First: Financial Volumes by sector – energy and nature conservation, followed by housing, (social) infrastructure and services account for the largest share of the portfolio. Second: Financial Volumes by client: BMZ is the largest donor with a share of two-thirds, followed by BMWE and the EU.

Russia is constantly carrying out targeted attacks against Ukraine’s energy infrastructure. Power lines, substations and power plants continue to be hit and damaged primarily by night-time drone and rocket attacks, making constant repair work necessary. Electricity supply is essential for the economy and for people’s everyday lives. Electricity is needed everywhere, in agriculture, in businesses, but also in schools, hospitals and private households. It is also an important prerequisite for the country’s heat supply.

KfW’s current portfolio in the energy sector is mainly implemented with the state-owned energy grid operator Ukrenergo and via the Ukraine Energy Support Fund (UESF). In addition to repair work, Ukraine is increasing the resilience of its electricity grid against Russian drone attacks, for example through physical protection such as concrete shelters. At the same time, the grid is being modernized and, made more energy-efficient, and the use of decentralized renewable energy is promoted.. Finally, KfW is also supporting Ukraine in connecting to the European electricity grid.

KfW keeps supporting the Ukrainian government in its long-term efforts to reduce the negative effects of climate change and to protect biodiversity.

The life of people in Ukraine is significantly impacted by the war. Many Ukrainians had to leave their homes because of the fighting. 3,6 million people, a quarter of which children, are currently displaced within their own country. This has led to a high demand for housing and municipal infrastructure. KfW is helping to meet this demand, especially for IDPs in host communities. The support includes education and social care for children and young people as well as psychosocial support. In addition, buildings are rehabilitated or converted into residential buildings, and low-interest loans for housing are made available. This allows people to finally have a place called home again.

Furthermore, KfW is making funds available for basic municipal infrastructure, covering cities and communities in large parts of the country. It includes, for example, the repair and modernisation of water and wastewater systems to ensure the security of supply for the inhabitants and to reduce the risk of diseases caused by pollution. In the city of Chernivtsi alone, this will improve the living conditions of 190,000 people. The financing of relevant social infrastructure also plays an important role. KfW has been cooperating with the Ukraine Social Investment Fund (USIF) for many years in this sector. Over the years, more than 500 sites and facilities throughout the country have been upgraded, modernized and refurbished to be more energy efficient and better equipped, including hospitals and health stations, kindergartens, schools. Thousands of people benefit directly from this.

Keeping the economy running is a crucial precondition that allows people to live their lives as normal as possible despite the Russian attacks. In addition, the economy will also be able to recover more quickly once the fighting has ended if it is not coming to a complete standstill. In this phase in particular, the private sector will play a decisive role in driving the country’s reconstruction forward. It is therefore important to support the economy in this acute time of crisis.

With the ongoing portfolio KfW cooperates with the Business Development Fund (BDF) in implementing a governmental economic promotion programme. The BDF provides low-interest loans primarily to small and medium enterprises, which include agricultural businesses, bakeries, food retailers and small logistics companies. On behalf of the German government, KfW, together with other international partners, is supporting BDF in its “Vision 2.0” to advance to a national development organization. Through two large regional funds – the Green for Growth Fund (GGF) and the European Fund for Southeast Europe (EFSE) – KfW is providing further financing to businesses, which is strengthening the local economy, including with a focus on energy efficiency. The reconstruction, renovation and equippment of vocational schools is another important component of KfW’s portfolio. These schools provide young people with relevant skills for the labour market.

KfW is supporting Ukraine on behalf of the German Federal Government (primarily the Federal Ministry for Economic Cooperation and Development (BMZ), the Federal Ministry for Economic Affairs and Energy (BMWE) and the Federal Ministry of Finance (BMF) and on behalf of the EU. It can draw on long-standing cooperation with various state, non-state and international partners in Ukraine:

Energy and nature conservation: Ministry of Energy, Ministry of Economy, Ukrenergo, Ukraine Energy Support Fund (UESF).
Housing (social) infrastructure and services: Ministry for Development of Communities and Territories, Ministry of Health, Municipalities of Chernivtsi, Zhytomyr, Zaporizhzhia, Ukraine Social Investment Fund (USIF), State Fund for Support of Youth Housing (SFYH), IOM, UNICEF, Norwegian Refugee Council (NRC).
Sustainable economic development and vocational training: Ministry of Finance, Business Development Fund (BDF), Green for Growth Fund (GGF), European Fund for Southeast Europe (EFSE), IOM, USIF.