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Newsletter #26 Reconstruction Ukraine - July–August 2025

As summer comes to an end, we are pleased to share with you a new edition of our newsletter, highlighting the key developments from July and August on Ukraine’s reconstruction.

This period has been particularly eventful. In July, the Ukraine Recovery Conference (URC) 2025 brought together the main stakeholders of the reconstruction process. Several major outcomes emerged:

• the launch of new EU funding programs and initiatives;

• projects and agreements in the fields of reconstruction, healthcare, and energy;

• significant progress in the banking sector.

Domestically, Ukraine has also undergone an important government reshuffle, which we cover in this issue.

We also take a closer look at:

• the strengthening of Franco-Ukrainian cooperation with the creation of a new €200 million fund;

• fresh financing opportunities for deep-tech start-ups and Ukrainian SMEs provided by the European Innovation Council;

• recent developments in the private sector, with a particular focus on advances in energy storage.

We hope you will enjoy this edition and that it will provide valuable insights into the challenges and opportunities of Ukraine’s recovery.

Enjoy the read!

Ukraine Recovery Conference 2025 - results

• URC-2025 overview

On July 10–11, URC2025 was held in Rome, marking the fourth Ukraine Recovery Conference. It is an annual high-level international event focused on mobilizing political, financial, and technical support for Ukraine’s reconstruction and recovery, especially in the context of the ongoing war.

The event brought together governments, international organizations, financial institutions, businesses, local and regional authorities, and civil society — all united in their commitment to strengthening Ukraine’s resilience and supporting its recovery for the long haul.

Key figures from URC2025:

• Over 30 heads of state and government;

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• More than 6,000 participants from 70 countries and 43 international organizations;

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• Hundreds of companies from across the globe, alongside leading political and civil society figures;

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• Over 500 media representatives;

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• 200 agreements and memorandums signed, with a total value of approximately €13 billion

Source: National Bank of Ukraine, URC2025

• The creation of a European Flagship Fund for the reconstruction of Ukraine

On 10 July, during the URC 2025 Conference on the Reconstruction of Ukraine in Rome, the European Commission officially presented a new initiative to create a European Flagship Fund for the Reconstruction of Ukraine.

Key objectives and structure

With an initial capital of €220 million, the Fund aims to mobilise €500 million by 2026 by making strategic, impact-driven primarily equity investments.

Confirmed anchor investors

The founding public contributors to the Fund include:

• The European Union (via the Ukraine Investment Framework)
• Development Banks: EIB (EU), Proparco (France), KfW (Germany), CDP (Italy), BGK (Poland).

The EU, Germany, Poland, Italy, and France, through their respective development banks, will provide the initial capital contribution, which will serve as the foundation for further engagement of private partners.

Priority sectors

The Fund will target sectors deemed critical for Ukraine’s sustainable recovery and resilience:

• Energy, with a focus on renewable energy
• Infrastructure
• Digital transformation
• Industrial modernisation
• Production of dual-use goods
• Critical raw materials (CRM)

Investment models and participation

To ensure flexibility and maximum impact, the Fund is evaluating a combination of investment strategies:

• Direct equity and quasi-equity investments in high-impact projects and enterprises
• A fund-of-funds model to channel capital through specialized financial intermediaries
• A hybrid approach combining both direct investments and fund-based mechanisms

It is expected that all EU member states, international partners, institutional investors, Ukrainian funds and private investors will be able to invest in the fund.

The Fund's management company is to be selected through a competitive procurement process between July and October 2025, ensuring high standards of governance, transparency, and impact orientation.

Source: Ministry of Economy, Environment, and Agriculture of Ukraine, European Commission.

• European Commission announces €2.3 billion package to support Ukraine’s recovery and reconstruction

On 10 July, the President of the European Commission, Ursula von der Leyen, unveiled a new €2.3 billion package of agreements to support Ukraine's recovery and reconstruction efforts.

Overview of the investment package

The package includes agreements with leading international and bilateral public financial institutions and consists of:

• €1.8 billion in loan guarantees;
• €580 million in grants.

These funds are expected to unlock up to €10 billion in investments.

Targeted areas

• Supporting SMEs: €500 million in guarantees and grants to help Ukraine's small businesses, including start-ups and those employing veterans and displaced persons.

• Mobilising strategic investments: €600 million for large-scale private sector projects in key sectors like energy, transport, and manufacturing.

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• Rebuilding cities and communities: €520 million for municipal infrastructure in war-affected areas, including healthcare, urban mobility, and housing.

• Energy security and green transition: €265 million to stabilize Ukraine's energy grid, rebuild renewable energy capacity, and improve energy efficiency.

• Critical infrastructure: €310 million to repair and rebuild critical infrastructure, including housing, hospitals, and medical facilities.

With this package, the European Union’s total support under the Ukraine Investment Framework reaches €5.7 billion, expected to catalyze more than €18 billion in public and private investments.

Source: Ministry of Economy, Environment, and Agriculture of Ukraine, European Commission.

URC2025: Sectoral analysis of key outcomes

• URC 2025: Focus on energy sector

At URC 2025, over €1.2 billion in financial commitments were secured for Ukraine’s energy sector. More than 30 agreements and memorandums were signed with international partners, covering a wide range of areas: from nuclear and hydropower development to oil and gas exploration, renewable energy support mechanisms, and workforce training programs.

Key agreements and initiatives:

• The European Investment Bank (EIB) - Ukrhydroenergo: a €120 million loan for the recovery and modernization of Ukrainian hydropower plants. A part of the funds will be used to restore three of the company’s hydropower plants that were damaged as a result of Russian attacks. The remaining funds will be allocated for urgent emergency repairs in case of potential new damage to other Ukrhydroenergo facilities.

• Westinghouse Electric Company- Energoatom: the signing of major new agreements which will enable the deployment of full-scale fabrication facilities in Ukraine for the manufacture of nuclear fuel components compatible with Westinghouse technologies.

• Norway: contribution of $200 million to transform Ukraine's war-damaged energy sector under new framework agreement with UNDP. The new initiative will restore heating and water supply for millions of people, including vulnerable frontline populations, while equipping hospitals and water utilities with solar and backup battery systems to maintain life-saving services during outages.

• Energy Support Fund: an additional €200 million from donor countries will be directed to the URC 2025 Energy Support Fund, aimed at procuring critical equipment and restoring damaged energy infrastructure following Russian attacks.

These energy-focused agreements underscore Ukraine’s strategic priority to rebuild a more modern, resilient, and sustainable energy system with deepened ties to the EU’s energy framework.

Source: Ministry of Energy of Ukraine, EIB, Westinghouse, Energoatom, UNDP

• URC2025: Focus on reconstruction and infrastructure

The Ukraine Recovery Conference (URC2025), held in Rome, marked a pivotal moment in defining the policies and mechanisms for Ukraine’s recovery, transformation, and long-term development in the wake of Russia’s full-scale invasion.

Key results in reconstruction and infrastructure:

• 5 intergovernmental agreements were signed, totaling over €370 million.
• 6 memorandums of understanding were concluded, worth an estimated €379.3 million.
• 4 joint statements, 1 grant funding announcement, and 1 approval for fund allocation were made, covering €232.7 million in support.
•  $200 million is the total value of signed agreements at the local and regional level.

Key initiatives announced at URC2025:

1. €100 million agreement with the Council of Europe Development Bank (CEB):

Ukraine and the CEB signed a €100 million loan agreement to finance a housing certificate compensation scheme. This mechanism allows eligible individuals who lost their homes due to war to purchase new apartments or houses, including those under construction.

2. €134 million financing agreement with the European Investment Bank (EIB) for restoration of transport networks

This agreement will fund the rehabilitation of critical road and bridge infrastructure, including the M06 highway (Kyiv–Hungarian border), while the border-infrastructure improvements will bolster EU “Solidarity Lanes” meant to keep trade with Ukraine’s flowing and deepen economic ties.

3. Grants from the Government of Italy

With the support of the Italian Government, two grant agreements were signed:

• Grant Agreement between Ukraine and the Italian Republic for 32.5 million euros for the Program “Restoration and Preservation of Cultural Heritage of the Odesa Region”.
• Grant Agreement between Ukraine and the Italian Republic for 6 million euros, for the Program “Restoration and Reconstruction of Irrigation Systems of the Odesa Region”

4. Memorandum with Poland on border infrastructure and road projects

The Ministry for Development signed a memorandum with the Agency for Restoration of Ukraine and the Polish Industrial Development Agency. It outlines plans for joint infrastructure projects, including modernization of the Yahodyn border checkpoint, repairs to the Lviv bypass and Krakivets–Lviv–Shehyni highways. Potential co-financing of projects worth up to €200 million.

With billions committed and strong coordination between Ukraine and its European partners, the conference advanced practical cooperation that lays the groundwork for Ukraine’s resilient and inclusive reconstruction.

Source:  Ministry for Development of Communities and Territories of Ukraine, CEB, EIB

• URC2025: Focus on healthcare

At the Ukraine Recovery Conference 2025, the health sector emerged as a clear priority, with agreements signed totaling approximately €195 million.

Key agreements and initiatives

• A memorandum with the Belgian development agency Enabel was signed to support long-term projects aimed at strengthening the medical rehabilitation network, modernizing six hospitals in Kyiv and Chernihiv regions, supplying generators and boiler houses, launching training programs for multidisciplinary teams, and supporting reforms in nursing, 3D prosthetics, and telemedicine. The estimated funding need for this initiative is €31 million.

• A memorandum with the French agency for international technical cooperation, Expertise France, was concluded to establish a financial mechanism to support priority projects of the Ministry of Health of Ukraine. The agreement includes provisions for feasibility studies, modernization of war-affected communities and healthcare facilities, provision of technical expertise, leadership training, and development of education programs aligned with EU standards.

• A memorandum with Ellipse Projects SAS was signed to foster cooperation on the reconstruction, modernization, and development of healthcare infrastructure in Ukraine, with an emphasis on aligning with modern standards of quality, safety, and accessibility.

• A new €11.5 million initiative titled “Healthier Ukraine: supporting rapid recovery and continuous transformation for the sustainability of the healthcare system in Ukraine” launched by the European Union, Enabel, and the World Health Organization, in cooperation with the Ministry of Health of Ukraine. The initiative will focus on improving governance and coordination in the healthcare sector, ensuring effective responses to public health challenges, developing human and institutional capacity, transforming primary healthcare, and advancing digitalization.

Healthcare remains a top priority in Ukraine’s reconstruction efforts. Continued support from international partners is critical to building a resilient, efficient, and accessible healthcare system that meets modern standards.

Source: Ministry of health of Ukraine, Enabel, Ellipse Projects SAS

• URC2025: Bank agreements

At the fourth Ukraine Recovery Conference (URC2025), held in Rome on July 10–11, Ukrainian banks signed a record number of agreements with international partners totaling nearly €1.5 billion.

• Credit Agricole Ukraine

The bank has signed a EUR 100 million risk-sharing agreement with the International Finance Corporation (IFC) to increase lending to medium and large businesses in various sectors of the economy, such as agribusiness, manufacturing, energy, and logistics, as well as to support Ukraine’s energy security.

• PrivatBank

PrivatBank has signed an agreement with the European Bank for Reconstruction and Development (EBRD) on a credit line that will cover part of the bank’s credit risk on new sub-loans. The EBRD’s guarantee of EUR 185 million will unlock record financing and enable Ukrainian businesses to receive up to EUR 600 million in new loans.

• Ukrgasbank

Ukrgasbank signed another major agreement with the EBRD. The agreement is built on a risk-sharing model with a guarantee from the EBRD, backed by first-loss risk cover funded by France and the European Union. The Facility enables Ukrgasbank to channel up to €300 million in new loans to support Ukrainian businesses and households.

It also secured €120 million in EIB loans and a portfolio guarantee to power Ukraine's businesses and municipalities.

• Oschadbank

Oschadbank secured a EUR 50 million EIB credit line under the Ukraine Facility to finance municipal heating and energy efficiency projects.

It also attracted EUR 1 million from the Ukraine-Moldova American Enterprise Fund for the second phase of the Create grant program, supporting women entrepreneurs in manufacturing. The initiative is run by the Ministry of Economy, KSE Foundation, Aurora, and Oschadbank.

Source: National Bank of Ukraine, Privatbank, Ukrgasbank, Oschadbank, Credit Agricole Ukraine

CCI France Ukraine initiative

• Conference “Rebuilding in practice: projects, tools, and partnerships to support Ukraine”

The French-Ukrainian Chamber of Commerce and Industry is pleased to invite you to a special conference “Rebuilding in practice: projects, tools, and partnerships to support Ukraine”.

Date: Friday, September 5, 2025

Location: Paris

Welcome from 09:00 in Paris

Conference starts: 09:30 (Paris time) | 10:30 (Kyiv time)

Offline: Cabinet Jeantet (11, Galilée Street, 75116 Paris)

Online: on YouTube

Speakers:

• Pierre Heilbronn, Special Envoy of the President of the French Republic for Ukraine's Reconstruction
• Davide La Cecilia, Italy’s Special Envoy for the Reconstruction of Ukraine
• Francis Malige, Managing Director, Head of Financial Institutions Business Group at the EBRD.
• Ignace Haertle, Entrepreneur and Investor in Ukraine

Moderator:

• Bertrand Barrier, President of the Franco-Ukrainian Chamber of Commerce

Objectives of the Conference:

• Identify concrete examples of successful reconstruction projects involving French or European actors;

• Understand feasibility conditions: financing, insurance, local partners, administrative support;

• Provide French companies with a clear view of current opportunities (by sector, by region);

• Share feedback from institutions (EBRD, France) to reduce risks and secure commitments;

• Promote the emergence of new collaborations, particularly in the energy, infrastructure, agro-industry, health, education, and digital sectors;

• Share the conclusions of the 2025 Ukraine Reconstruction Conference (URC2025), held in Rome on July 10–11, 2025, with an emphasis on Ukraine’s recovery and reconstruction in the context of the ongoing conflict;

• Present the private sector perspective on Ukraine’s reconstruction: operational experience and main challenges of running a business in wartime; strategies to access financing and attract international investment; lessons from the sale of a construction company; key takeaways for French companies considering entering the Ukrainian market.

This is a unique opportunity to engage with key on-the-ground actors and explore how your company can actively contribute to Ukraine’s reconstruction and sustainable development.

Key developments for Ukraine’s Reconstruction

• Ukrainian government reshuffle

On July 17, the Verkhovna Rada approved the appointment of ministers in Ukraine’s newly reshuffled government.

The most significant change was the replacement of Prime Minister Denys Shmyhal, who had held the position for over five years, with his First Deputy and Minister of Economy, Yuliia Svyrydenko, who now leads the executive branch.

The Minister of Digital Transformation, Mykhailo Fedorov became the First Deputy Prime Minister.

Key changes include:

• Denys Shmyhal was appointed Minister of Defense. In addition, the Ministry of Strategic Industries was merged into the Ministry of Defense.

• Oleksii Soboliev, former First Deputy Minister of Economy, was appointed head of the newly consolidated Ministry of Economy, Environment, and Agriculture.

• The short-lived Ministry of National Unity, led by Oleksii Chernyshov, was dissolved.

• Taras Kachka, former Deputy Minister of Economy and Trade Representative of Ukraine, was appointed Deputy Prime Minister for European Integration.

• Herman Halushchenko, previously responsible for the energy sector, was appointed Minister of Justice.

• Svitlana Hrynchuk, formerly Minister of Environmental Protection and Natural Resources, became the new Minister of Energy.

• Denys Uliutin was appointed head of the newly established Ministry of Social Policy, Family, and Unity.

All other ministers retained their positions.

Source: BBC

• The Ministry of Economy presented the Green Platform at URC 2025

On July 11, during the Ukraine Recovery Conference 2025, the Ministry of Economy of Ukraine introduced the Green Platform — a digital tool designed to support Ukraine’s green transition by facilitating access to sustainable financing. The platform is available on the Made in Ukraine portal.

What is the Green Platform?

The Green Platform is a structured digital catalog that brings together more than 60 financing programs aimed at promoting green development across Ukraine. It is designed to support businesses, local communities and enterprises.

The Green Platform was developed by the Ministry of Economy of Ukraine in cooperation with the Office of the Green Transition and the DiXi Group think tank, with support from the International Renaissance Foundation.

The platform contains:

• a catalogue of grant, loan and investment programmes;
• personalised search for the needs of businesses, enterprises and communities;
• an information hub with examples of implemented projects and up-to-date analytics.

The Ministry of Economy plans to further enhance the platform’s functionality and continue expanding its portfolio of green financing tools in cooperation with international partners.

Source: Ministry of Economy, Environment, and Agriculture of Ukraine

French-Ukrainian Cooperation Development

• Ukraine and France to establish a new €200 million fund to support critical infrastructure and priority economic sectors

Ukraine and France have agreed to establish a new Support Fund for Critical Infrastructure and Priority Sectors of the Ukrainian Economy, with a target capitalization of €200 million. In addition, a new intergovernmental agreement is set to be signed by the end of 2025, aimed at deepening economic cooperation and creating better conditions for attracting investment. The corresponding Declarations of Intent were signed on July 21, 2025.

About the fund

According to the declaration, the fund will be established in 2026, with actual financing of resilience-building projects expected to begin in 2027.

To ensure sufficient capitalization, the parties aim to attract a wide range of co-financing sources, including:

• participating companies

• Ukrainian partners (public and private)

• the state budget of Ukraine

• French and Ukrainian local authorities

• international donors

Planned intergovernmental agreement

In a separate declaration, Ukraine and France expressed intent to sign a new intergovernmental agreement that would include:

• expanded economic cooperation in key sectors: defense, energy (including renewables), nuclear power, transport, digital technologies, aerospace, agriculture, water supply, and critical minerals and metals.
• improved investment conditions for French companies and support for integrating Ukrainian firms into European production chains.
• joint implementation of large-scale projects, along with identification of financing and administrative tools for their realization.
• support for reforms related to Ukraine’s integration into the European market and energy system.

The first Grant Agreement between France and Ukraine to support critical infrastructure and priority sectors of the Ukrainian economy was signed in Paris on June 7, 2024.

This €200 million fund represents a strategic boost to Franco-Ukrainian ties, aimed at rebuilding essential infrastructure and accelerating Ukraine’s integration into the European economy.

Source: Ministry of Economy, Environment, and Agriculture of Ukraine

International Benchmark

• Naftogaz and EBRD sign landmark €500 million revolving loan agreement

Naftogaz and the European Bank for Reconstruction and Development have signed a landmark agreement for a €500 million revolving loan. This is the largest project the EBRD has ever signed in Ukraine and one of the largest in the Bank’s history overall.

Purpose and risk coverage

The financing will be directed toward purchasing natural gas, enabling Naftogaz to secure stable energy supplies for Ukraine.

The EBRD’s revolving loan is supported by an EU guarantee covering 90 per cent of the loan amount under its Ukraine Investment Framework, dedicated to unlocking financing for Ukraine’s recovery and long-term growth.

Gas procurement strategy

Under the agreement, Naftogaz Group will source natural gas on competitive terms from a pool of more than 30 prequalified suppliers.

Procurement contracts will follow the standards of the European Federation of Energy Traders (EFET) — an association of over 120 European companies dedicated to:

• Increasing transparency and efficiency in the European energy market
   
• Promoting fair competition
   
• Ensuring a secure and reliable energy supply across the continent

This is the fourth finance package the EBRD has provided for Naftogaz since Russia launched its full-scale war on Ukraine in 2022. It brings the total Bank financing to Naftogaz to €1.6 billion.

Source: Naftogaz, EBRD

• The European Innovation Council will provide €20 million for Ukrainian deep-tech start-ups and SMEs

As part of ongoing efforts to reinforce Ukraine’s innovation capacity amid Russia’s military invasion, the European Innovation Council (EIC) has announced to make €20 million of funding available for Ukrainian deep-tech start-ups and SMEs.

Funding details

The initiative aims to:

• accelerate the development of transformative technologies
• integrate Ukrainian innovators more deeply into European markets.

With this new action, the EIC focuses on high-impact deep-tech innovations in sectors such as:

• artificial intelligence,
• robotics,
• biotechnology,
• cybersecurity
• other priority areas for Ukraine.

Eligible companies can apply for grants of up to€500 000 to develop their technologies to move to market deployment (from Technology Readiness Level (TRL) 4 to TRL 6–7).  Around 40 projects are expected to receive funding. There will be a special emphasis on women-led enterprises to promote inclusivity in Ukraine’s tech landscape.

The call opened on 12 August and the deadline for applications will be on 26 November 2025.

This initiative reflects the EU’s broader commitment to an innovation-driven recovery and greater economic resilience in Ukraine.

Source: European Innovation Council

Focus on the private sector

• DTEK and Fluence begin commissioning of Ukraine’s largest battery energy storage project

DTEK, Ukraine’s largest private energy company, and Fluence Energy, Inc. (“Fluence”), a global energy storage leader, have announced the early start of commissioning for Ukraine’s largest battery energy storage project and one of the biggest in Eastern Europe

Project scope and technical details

The project includes the deployment of 200 MW of installed power across six strategic sites in Ukraine. Currently in the final delivery phase, work is underway on:

• Commissioning
• Testing
• Initial discharge operations

In total, 698 Fluence Gridstack cubes with the batteries have been installed at 6 energy storage sites – each one with a capacity of between 20 MW and 50 MW. Collectively, they are able to store 400 MWh of electricity – enough to power 600,000 Ukrainian homes for two hours.

Under the contract with grid operator Ukrenergo, commercial operations are set to begin in October 2025 – in time for the start of Ukraine’s crucial winter heating season.

Strategic importance for Ukraine's energy system

Once the system is fully operational, it will provide frequency and power balancing services, which will strengthen the Ukrainian power grid. This is especially critical during outages and to reduce the necessity of implementing rolling power outages that affect the population and economy.

Wartime innovation

Due to the challenges of war and restricted access in Ukraine, this is the first project Fluence has commissioned fully remotely. As part of the delivery, 20 Ukrainian power engineers and operations specialists completed advanced training on Fluence’s existing projects in Germany and Finland.

Source: DTEK