The European Bank for Reconstruction and Development (EBRD) expects strong long-term investor interest in Ukraine’s reconstruction but cautioned that large-scale foreign investment will depend on stability and sustained reforms after the war, Arvid Tuerkner, the bank’s managing director for Ukraine and Moldova, said in an interview with bne IntelliNews. 

According to Tuerkner, the outlook ranges between a best-case scenario of durable peace and a more fragile environment that could deter capital inflows.

“We expect to be in a world that is between the current war and what we call the ‘good ceasefire’, which is a proper, stable sustainable ceasefire secured for the long-term,” he said. “This is ideal world, where investors will be confident and want to invest, FDI will come and we will really mobilise the private sector. But this is not a given.”

He warned that a weaker outcome could significantly limit investment. “We could also be in a world much closer to the current war, fragile and characterised by populist politics, with EU accession drifting away. This would be really detrimental, and we might be able to invest less than we do now.”

Gradual investment 

While Ukraine is expected to attract significant attention from international investors, Tuerkner said inflows would take time to materialise even after a peace agreement.

“I hope there will be an enormous interest to invest in Ukraine. A lot of it will be driven by EU accession and EU standards, which will be required for market access. This is what I’m already seeing, and companies are thinking how they can upgrade to that level.”

“But with FDI we need to be realistic. That will not be tomorrow. [Companies] will observe for a while, they will need to convince their boardrooms, they want to see a period of stability before they really invest at scale. So first it will be those already there and Ukrainian businesses.”

He added: “Even after a peace agreement, I think we will need some de-risking tools.”

The EBRD is already working on mechanisms to reduce risks for investors and mobilise capital, including partnerships with other development finance institutions.

“Three years ago we agreed with other development finance institutions, including those from G7 countries, that we would create a platform to finance projects in Ukraine. It brings in some DFIs into the market that otherwise would not be there. Mainly we want to use this platform during the reconstruction.”

Tuerkner said international donor backing would remain essential to underpin investment, particularly in public infrastructure. “We are extremely grateful to all of our donor countries, including the EU, which provide us with guarantees and grants, which make investments affordable, especially in the public sector and for municipal infrastructure.”

The bank is also working to unlock lending through Ukraine’s domestic financial system. “We are also mobilising through our financial institution products for the Ukrainian banking sector. The banks have a lot of liquidity but they are very hesitant to lend in the market because of the risks and because the economy is only growing very slightly. So we guarantee part of the portfolio, and then the banks are more engaged in lending.”

Reforms underway 

Tuerkner said Ukraine’s ability to attract sustained investment would hinge on continued reforms and governance improvements aligned with European Union standards.

“Under our Ukraine Reform and Recovery Architecture Programme, we have 320 experts sitting in the Ukrainian government and some agencies. We support the respective ministries with their reform efforts and the eu acquis, redrafting of laws, regulations and so on. The programme has been going for many years, and is always changing and growing in line with the needs.

“Corporate governance is always a big focus for us,” he added. “We helped draw up the law on state-owned enterprise corporate governance and are working on how the policy can be implemented. We are very active and hands on when it comes to supervisory board nominations, and make sure the process is merit-based and free from improper influence. As we have seen with the recent scandals in the energy sector, there are quite some reforms still to do.”

Energy under attack 

Since the start of the war, the EBRD has been investing heavily to keep energy and other essential services going as well as to lay the groundwork for recovery. The development bank deployed a record €2.9bn in finance in Ukraine last year, up from €2.4bn in 2024,

“Since the energy system was systematically attacked from the early days of the war, that is where a lot of our attention was focussed. We helped Ukrenergo with €700mn of loans and grants, and guarantees though various packages,” Tuerkner said.

As attacks expanded, the bank shifted towards decentralised energy solutions. “Then generation was attacked … We have not put so much money into repairing the big, concentrated Soviet generation facilities. Instead, we have focussed on how we can quickly decentralise energy production.”

Renewables are expected to play a key role in Ukraine’s future energy mix. “Renewable energy is the best protected against strikes. We are very proud that renewable investors keep investing. We have financed various projects — Power One last year, Galnaftogaz wind park — and we have more battery storage in the pipeline. We have a pipeline for this year alone of 1GW of renewable energy.”

Meanwhile, the EBRd’s support for businesses operating under wartime conditions in Ukraine has focused on resilience and adaptation. “The main challenges for businesses are energy and labour, but there are more,” Tuerkner said.

“We have helped businesses to secure their own energy, for example rooftop solar, including through the banking sector, where we have the energy security support facility. €700mn has already been placed, and we have enlarged the financing to €1.5bn because there is ongoing demand from citizens, as well as small and medium sized companies and municipalities.”

“We have human capital resilience programmes where we help businesses to manage labour shortages better. That includes re-skilling of the workforce, and how to become more productive with less staff.”