People walk past a residential building that was recently damaged during Russian attacks on the city, in Kharkiv, on April 9, 2024, amid the Russian invasion of Ukraine. (Photo by Roman PILIPEY / AFP)
Berlin: The German cabinet on Wednesday signed off on a package of measures to support businesses involved in the reconstruction of Ukraine, including grants and favourable interest rates.
"Ukraine needs more than just weapons to survive this war. It is also important that the economy continues to function and that the country can finance reconstruction," said Development Minister Svenja Schulze.
The 15-point plan includes grants and loans for small and medium-sized enterprises (SMEs) in Ukraine as well as investment guarantees for German companies, according to a statement from the development and economy ministries.
It also includes plans for a national public lender in the style of Germany's KfW development bank.
"We are already in talks with the Ukrainian government about such a funding institution," Schulze said.
The new lender is set to evolve out of the Ukraine Business Development Fund (BDF), co-founded by the KfW in 1999 to provide low-interest loans for SMEs in Ukraine.
Since Russia's invasion of Ukraine in early 2022, the BDF has helped around 40,000 SMEs to stay afloat during the war, according to the ministries.
For example, the BDF has supported agricultural businesses in clearing fields of mines to make farming possible again.
The initiative comes as Germany prepares to host the annual Ukraine Recovery Conference in June.
Germany must "use every opportunity to help the Ukrainian economy in these difficult times", said Economy Minister Robert Habeck.
The World Bank has estimated the total cost of reconstruction facing Ukraine more than two years since the start of the war is at least $486 billion.
