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By Patricia Cohen and Liz Alderman
Patricia Cohen reported from Lviv, Ukraine and Warsaw, and Liz Alderman from Paris. Both have the economic consequences since the Russian invasion of Ukraine.
Latvian roofing corporations and South Korean industry specialists. Mobile fuel brands in Denmark and wood brands in Austria. The titans of personal justice in New York and the concrete plant operators in Germany. Thousands of corporations around the world are positioning themselves for an imaginable billion-dollar gold rush: the reconstruction of Ukraine after the war is over.
Russia is stepping up its offensive as the year of war approaches, but the enormous task of reconstruction is already evident. Hundreds of thousands of homes, schools, hospitals and factories have been razed, along with major electrical installations and miles of roads. , railways and seaports.
The profound human tragedy is inevitably also an enormous economic opportunity that Ukrainian President Volodymyr Zelensky presented to the Marshall Plan, the American program that provided aid to Western Europe after World War II. billion.
The prospect of this treasure inspires altruistic impulses and entrepreneurial vision, shrewd business strategy and rank opportunism for what the Ukrainian Chamber of Commerce bills as “the largest structure in the world!
Zelensky and his allies take advantage of the credit of reconstruction to seamlessly integrate Ukraine’s infrastructure with the rest of Europe.
However, it is far from certain that all the gold from the long-awaited gold rush will materialize. Ukraine, whose economy topped 30% last year, desperately wants the budget to continue and carry out emergency repairs. Long-term reconstruction aid will count not only on the final results of the war, but also on sums invested through the European Union, the United States and other allies.
And while personal investors are being courted, few are willing to threaten to commit cash now, as the conflict is entrenched.
Ukraine and several European countries are rushing to seize Russian assets frozen abroad, however, several skeptics, adding Biden administration officials, have the legality of such a move.
However, “many corporations are starting to position themselves to be in a position and have a track record for this era when reconstruction financing will come,” said Tymofiy Mylovanov, a former economy minister and president of the Kiev School of Economics. There will be a lot of investment from around the world,” he said, and corporations say “we must be a component of that. “
More than three hundred corporations from 22 countries registered this week in Warsaw for a Rebuild Ukraine industry exhibition and conference. The compilation is just the newest in a fast-paced series of face-to-face and virtual meetings. Last month, at the World Economic Forum in Davos, Switzerland, a crowd of status filled the Ukraine House to talk about investment opportunities.
More than 700 French corporations flocked to a convention hosted by President Emmanuel Macron in December. And on Wednesday, the Confederation of Finnish Industry sponsored a one-day webinar with Ukrainian officials so corporations could showcase their wastewater treatment plants, transformers, threshers and prefabricated housing.
Sergiy Tsivkach, executive director of UkraineInvest, the government’s workplace committed to attracting foreign investment, appreciates the interest. He was in Lviv last week to meet with foreign investors, but insisted on one point.
“Everyone says, ‘We need to help rebuild Ukraine,'” he said. Tsivkach. ” But do you need to invest your own cash or do you need to sell goods?It’s two other things. “
Most are interested in promoting something, he says.
This was obviously demonstrated at the Warsaw Conference.
What Ukrainian and foreign corporations were looking to know was: who will sign the contracts and how are they implemented?
“Hundreds have asked me,” said Tomas Kopecny, the Czech government’s envoy for Ukraine.
For companies, a very important question is who will receive the money. This is a factor that Europe, the United States and global establishments such as the World Bank, the largest donors and lenders, are vigorously discussing.
“Who will pay what?” Domenico Campogrande, director of the European Federation of the Construction Industry, said from the stage.
Ukraine has made it clear that there will be rewards for early investors in post-war reconstruction. But this opportunity comes with risks.
Danfoss, a Danish trading corporation that sells thermal power appliances and hydraulic assemblies for apartments and other buildings, has been present in Ukraine since 1997. When war broke out last February, Russian bombing destroyed his warehouse in Kiev.
Since then, Danfoss has focused on helping quick wishes in war-torn regions and western Ukraine, where millions of other people displaced from their homes have been forced to take refuge in transitional shelters.
“For now, all efforts are aimed at maintaining a survival mode,” said Andriy Berestyan, the company’s general manager in Ukraine. “Right now, no one is looking for a primary reconstruction. “
Things have gone better for the company since last summer, as Ukraine rejected Russian advances. In October, new orders for Danfoss products arrived and Mr. Berestyan restored the Danfoss distribution center in Kiev. Then Russia began dropping bombs en masse. Electricity and water have been largely cut off, forcing Ukraine, and businesses, to return to emergency management.
Still, he said, Danfoss is keeping an eye on the long term. ” There will be opportunities for rebuilding,” he said, “and we see a huge, huge opportunity for us and for similar companies. “
These preparatory paintings are underway in places like Mykolaiv, one of the worst-affected regions, where many Danish corporations operate. Drones operated through Danish corporations mapped each bombed structure, in order to employ the know-how to help that reconstruction contracts deserve to be issued.
This information would help companies like Danfoss assess business prospects and, in all likelihood, bid for contracts.
Other governments that are expected to contribute to Ukraine’s reconstruction are also providing money to domestic companies.
Germany has announced the creation of an investment guarantee fund. The plan will be overseen by global auditing giant PwC and will compensate investors for monetary losses if corporations are expropriated or projects halted.
France will also provide state pledges to companies carrying out long-term work in Ukraine. Finance Minister Bruno Le Maire said contracts worth a total of 100 million euros, or $107 million, had been awarded to 3 French companies for projects in Ukraine: Matière builds 30 floating bridges, and Mas Seeds and Lidea supply seeds to farmers.
Private equity firms also consider business opportunities. President Zelensky reached an expired agreement last year with Laurence D. Fink, BlackRock’s lead executive, to “coordinate investment efforts to rebuild the war-torn nation. “the largest asset manager will advise Kiev on “how to distribute the country’s reconstruction funds. “
Mr. Fink joined the effort through Andrew Forrest, a wealthy sociable Australian mining individual who is the lead executive of Fortescue Metals Group. Forrest announced an initial $500 million investment in November, from his own personal equity fund, in a new boat created for reconstruction projects in Ukraine. The fund is reportedly controlled with BlackRock and aims to raise at least $25 billion from the sovereign wealth budget controlled through national governments and personal investors around the world for blank energy investments in war-torn areas.
Forrest courted Zelensky, wearing a Ukrainian flag pin on his lapel and presenting the Ukrainian president with an Australian whip on a stopover in Kiev last year. “As soon as Russian forces withdraw from the Ukrainian homeland,” but not before.
Eshe Nelson contributed reporting from London.
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