Ukraine’s investment promotion agency, UkraineInvest, has signed two memorandums of cooperation with firms and government agencies from the West to help rebuild the country in the aftermath of the war with Russia.

In a press statement issued by the agency yesterday (15 November), UkraineInvest said it had signed a memorandum of cooperation whereby it will support Luso-Dutch project development company Madoqua Renewables with the building of a methanol plant in the Ternopil region.

Sergiy Tsivkach, CEO of UkraineInvest, told Investment Monitor that the two parties will discuss the project details in the next six to twelve months. According to Tsivkach, Madoqua and its Ukrainian partners will need to work out details, including how to connect the plant to the electricity supply, as well as come up with a waste collection plan for the site where it will be built.

“The project will be implemented in stages. The initial investment will be $300m, which will then go up to $900m,” Tsivkach said. 

The other memorandum, also announced yesterday and signed with Business France, which is a French government agency tasked with the managing of investments abroad, will enable cooperation in:

  • The exchange of investment opportunities relevant to the reconstruction of Ukraine;
  • The promotion of any existing investment opportunities in the country;
  • The exchange of information on Ukrainian tax benefits and other incentives for investors from abroad.

The announcements came during the Forum on Investments and Transformation (FIT) for Ukraine conference, taking place in Poland’s capital, Warsaw, and bringing together government representatives and investment agencies from 65 countries. According to UkraineInvest, more than 7,000 people attended the conference this year.

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Ever since Russia launched a full-scale invasion of Ukraine in February 2022, government officials in Kyiv have been looking into ways to bring in foreign investors worried about the impact the conflict might have on their businesses.

Despite that, however, FDI projects have made an impressive inbound since last year, with net flows reaching $403m in July 2023, up from $150m recorded the same month a year before. 

Investors, for now, are widely expected to choose Western Ukraine for projects, mostly because the region is far from the battlefield. In an interview published last month, Veronika Movchan, research director at the Institute for Economic Research and Policy Consulting (IER) in Kyiv, told Investment Monitor that Western companies looking to invest in Ukraine were “likely (to) do that near Lviv rather than Dnipro.”

Western Ukraine also shares borders with Poland, Slovakia, Hungary and Romania, all of which are EU member states with a great strategic position for Ukrainian and international businesses in the region. Tsivkach stated that the neighbouring countries could help with logistics projects in the area of transport logistics and supply chains, as well as energy supply and military technology. 

“Ukraine needs to diversify its energy supply because we’ve historically bought lots of gas, oil and petrol from Russia and Belarus. So that creates a huge opportunity for energy supplies and transition,” Tsivkach told Investment Monitor. “We are neighbours, we need to make sure our relations stay friendly and benefit our countries. And I think we’re on the right path and we’ve received that support (from neighbouring countries).”