New instrument for the reconstruction of Ukraine - KfW launches first large-scale fund with European partners

• A signal for private investors in wartime conditions: EUR 1 billion of private capital
• Total private investments of up to EUR 7 billion possible in strategic areas such as energy infrastructure, industry and logistics

KfW today launched a new European fund for the reconstruction of Ukraine at the Ukraine Recovery Conference in Rome, acting on behalf of the Federal Ministry for Economic Cooperation and Development (BMZ) as lead arranger. The European consortium is made up of the governments of Germany, Italy, Poland and France, their development banks, the European Commission, and the European Investment Bank (EIB). The jointly initiated fund aims to mobilise capital from private investors in the amount of around EUR 1 billion for the reconstruction of Ukraine and to invest directly in private investment projects in strategic sectors of the Ukrainian economy. These include the reconstruction of energy infrastructure, the expansion of wind and solar power as replacements for old coal-fired power plants, industrial production facilities and digital infrastructure such as data centres.

“With the new European fund for the reconstruction of Ukraine, KfW is sending a signal to private investors,”

said Christiane Laibach, KfW Executive Board Member for International Financing.

"The fund makes investment by private investors attractive even under wartime conditions and reduces their risk. Reconstruction is achievable even under current wartime conditions through a joint effort with the EU, European countries, and the private sector." This will lay the foundations for deeper trade relations with Ukraine in the future.

The World Bank estimates the cost of reconstructing Ukraine at USD 524 billion. According to Laibach, this amount can only be provided with the participation of private investors.

Within the framework of the fund structure, KfW and the other public donors act as financiers of the "first loss tranche". Together, the donors are contributing up to EUR 220 million here and thus mitigating the risks for private investors. This amount includes EUR 15 million each from Germany, Italy, France and Poland via their promotional banks. The EIB will invest EUR 100 million on the basis of an EU guarantee. EUR 60 million is to come from EU grants, which will be added to the fund via KfW and the Italian promotional bank Cassa dei Depositi e Prestiti (CDP).

On this basis, the fund aims to raise further capital from private investors. The planned target is EUR 500 million in 2026. If the security situation improves, the target volume is expected to increase to EUR 1 billion by 2027/2028.

By providing equity, the fund will act as a lead investor, enabling project companies and companies to attract further equity and debt capital at project level. With a fund volume of EUR 1 billion, the fund will enable investments of around EUR 6 to 7 billion.

A market sounding process will be used to identify the best fund approach available on the market by the end of 2025. The first investments are expected to be made from the second half of 2026.

KfW is one of the largest investors in first loss tranches worldwide.

Further information on KfW's involvement in Ukraine can be found at:

For more resilience | KfW Development Bank

For a photo on the topic of Ukraine go to:

Photo archive | KfW

For more details about KfW's impact funds, see:

Impact funds – social commitment with returns | KfW Development Bank