To state the obvious, investing in a country at war can be risky. Most of the funding flowing into Ukraine in the war’s first year has gone to the public sector and military. But development finance institutions are now ramping up investment in Ukraine’s private sector, too.
“For most private companies or banks that are active in Ukraine currently, it's really just a question of how they keep their businesses alive,” Lisa Kaestner, International Finance Corporation’s country manager for Ukraine and Moldova, tells me.
IFC and other multilateral and bilateral DFIs first responded to the war by helping stabilize and support existing clients. Some, such as the European Investment Bank, have mainly invested in the public sector. But Markus Berndt, acting head of EIB Global, tells me that will change in the year ahead as EIB looks to make more private sector investments, especially in Ukraine’s small businesses.