The International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD) have made a notable commitment of $50 million to the newly launched Rebuild Ukraine Fund. This private equity investment vehicle aims to bolster Ukrainian businesses amid the ongoing conflict and lay the groundwork for sustainable economic recovery. Managed by Dragon Capital, one of Ukraine’s most reputable investment firms, the fund will focus on providing crucial equity and quasi-equity financing to small and medium-sized enterprises (SMEs) and mid-cap companies, sectors critical for sustaining livelihoods and rebuilding the nation’s industrial and economic framework.
The joint effort sees both the IFC and EBRD contributing $25 million (€21.8 million equivalent) each as anchor investors, facilitating the fund’s initial close and sending a strong message to global investors about the resilience and viability of Ukraine’s private sector even in these challenging times.
Targeting a total capital pool of $250 million, the Rebuild Ukraine Fund will strategically invest in various essential industries including consumer retail and services, healthcare, financial services, construction materials, agribusiness, and technology. These sectors are vital not only for Ukraine’s survival during the war but also serve as the foundation for long-term recovery once conditions improve.
Recognizing that SMEs account for more than 60% of employment in Ukraine and play a crucial role in economic stability, the fund aims to address the significant financing gaps that have emerged since the commencement of the war in 2022. By providing long-term capital, it will assist companies in modernizing, maintaining operations, expanding production, and preserving or creating jobs.
Strengthening the private equity ecosystem is a strategic priority for international financial institutions, particularly as banks grapple with increased risks and limited credit availability. Private equity investment, exemplified by initiatives like the Rebuild Ukraine Fund, offers essential growth capital to companies that traditional financing routes may not support.
In partnership with Dragon Capital, the IFC and EBRD aim to bolster investor confidence in the Ukrainian market, enhance local financial capabilities, and foster long-term capital formation. This initiative reflects a strong endorsement of the resilience and potential of Ukrainian businesses amid ongoing adversity.
A portion of the IFC’s investment will receive backing from guarantees provided by the European Commission and the Government of France under the Ukraine Investment Framework. These risk-sharing mechanisms are intended to mitigate investor exposure, stimulate private capital mobilization, and support strategic sectors during wartime, thereby reinforcing Ukraine’s recovery financing architecture.
During the Rebuild Ukraine Conference held in Warsaw, leaders from the EBRD, IFC, and Dragon Capital highlighted the pressing need to support businesses in Ukraine during this critical time. They emphasized that the fund will deliver essential capital to SMEs and mid-cap firms, helping establish the building blocks necessary for Ukraine’s economic recovery.
Dragon Capital, founded in 2000, stands out as a key player in Ukraine’s investment landscape. With two decades of experience and a diverse portfolio that includes manufacturing, logistics, technology, and real estate, the firm is uniquely positioned to direct capital into high-potential businesses, even amidst ongoing instability.
As the war in Ukraine continues, sustained international support for the economy will be crucial. The Rebuild Ukraine Fund aspires to preserve and create jobs, maintain supply chains, encourage innovation, and lay the foundation for future reconstruction efforts. This funding initiative highlights the consensus among global institutions that a vibrant private sector will remain essential to rebuilding Ukraine in every dimension—economically, socially, and structurally.