Germany’s Ministry for Economic Cooperation and Development has produced a 15-point paper aimed at what it calls “the mobilization of the private sector for the reconstruction of Ukraine.”
Meetings have been held in the German and Ukrainian capitals for weeks to prepare for Berlin’s Ukraine Recovery Conference on June 11 and 12. have been held in Locarno, Switzerland, and most recently, London, which largely focused on financial aid for the Ukrainian economy.
However, those close to the German government say the Berlin conference will highlight “four dimensions of reconstruction.” In addition to training workers, the issue of EU accession will also be prominent, as will supporting Ukrainian cities and communities.
The price of reconstruction
Germany’s Economic Cooperation and Development Ministry already provided some financial aid to Ukraine in 2014, following the . “We want to build on what already exists,” a ministry spokesperson told DW.
The support is ongoing, even while , and is putting pressure on Ukraine’s eastern front. The International Monetary Fund (IMF) estimates the cost of reconstruction at $400 billion (€370 billion).
Private German companies wanting to invest in Ukraine — at least in areas less threatened by Russian attacks — can apply for German state securities.
These are offered via the “Investment Guarantees” program of the Economy Ministry, and are similar to insurance. In the case of German investments in Ukraine, they are guaranteed in the case of war. For example, if a Russian bomb were to hit and destroy a newly-built facility, Germany would be liable for the majority of its investments.
Safeguarding 22 Investment Projects in Ukraine
Last year, German Economy Minister Robert Habeck approved 53 applications for investment protection abroad, as part of the “Investment Guarantees” program, totaling €1.5 billion worth of investments. Most of the applications for Ukraine were approved, amounting to €54.8 million for 22 investments, figures that can be found in the 2023 Annual Report of “Investment Guarantees,” the agency that processes insurance applications for the Ministry of Economics.
An Economy Ministry spokesperson was not able to say how many applications have been submitted to the program since the start of this year. Russia has increased air-strikes with missiles and drones on Ukraine the past few months. While Kyiv almost always successfully repels the attacks with its air defenses — other parts of Ukraine are less successful.
One of the German investment insurance policies approved for Ukraine following Russia’s invasion in 2022, was for a project by the German company Fixit. The firm is constructing a factory for the production of building materials, near the western Ukrainian city of Lviv.
Fixit has been manufacturing building materials in Eastern Europe via its subsidiary Kreisel for many years. The company began constructing a new factory near Lviv before Russia invaded Ukraine on February 24, 2022. After the Russian attack, construction work was halted. Fixit was then able to resume constructing its second Ukrainian factory with the guarantee of the investment insurance policy.
Building materials for reconstruction
“We are happy that we will be able to start trial operations this year,” Michael Kraus, Fixit’s “East Region” managing director, told DW. “We have to rebuild Ukraine. It is a very beautiful country with very friendly people.”
But the war has also been challenging for him. The German engineering companies who manufacture the machines that produce the new construction materials wouldn’t send their assemblers to Ukraine — because of the war.
Kraus himself couldn’t even send Fixit’s Ukrainian employees to the manufacturers for training in Germany – because Ukrainian men of military age cannot leave the country. In the end, he applied for a special permit from the Ukrainian government and was finally able to send three Ukrainian employees to Germany and Poland for training. Now they have the skills to install the machines in the new factory near Lviv, once construction is finished.
Sixty people are due to start work in Fixit’s new building materials factory soon, the second Fixit in Ukraine. And the company, together with its Ukrainian subsidiary Kreisel plans to set up a a training center to equip staff with the skills they will need. It’s another initiative that will likely also benefit from German support, through a loan from the German KfW Development Bank.
This article was orginally written in German.
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