Norwegian Government allows Norfund to invest in Ukraine

Russia’s war against Ukraine has led to widespread physical damage to homes, schools, roads and energy infrastructure. Ukraine is dependent on investment financing to rebuild what has been destroyed by Russian attacks and support recovery in a free and independent Ukraine. Public funding alone will not be sufficient, so it will be essential to mobilise private capital.

‘The Norwegian Government will now allow Norfund, the Norwegian Investment Fund for developing countries, to invest in Ukraine. Capital provided by Norfund reduces the risks for companies investing in Ukraine, including Norwegian companies. This will be essential in advancing Ukraine’s reconstruction and recovery efforts after the war has ended. Under the Nansen Support Programme for Ukraine, Norway is providing support for Ukraine’s fight to defend itself both through military donations and through funding to assist the Ukrainian people. The scale of need is enormous, and the Government is now taking steps to enable the Norwegian business sector to contribute more to the effort to help Ukraine,’ said Prime Minister Jonas Gahr Støre.

As an investment fund, Norfund works to create jobs and improve lives, and to support the green transition by investing in businesses that promote sustainable development. Norfund has experience operating in high-risk markets and will be an important tool in attracting private sector investment in Ukraine.

Before Russia launched its full-scale invasion, Ukraine’s private sector accounted for 70 % of its GDP. The business sector has a key role to play in maintaining the country’s economic momentum. The private sector produces and delivers basic goods and services such as food and medicines.

‘Russia’s war of aggression has brought widespread destruction to Ukraine. The private sector will play a critical role in the recovery effort, and Norwegian businesses are eager to take part. Norfund has expertise in investing in challenging markets, and this will be an important resource to draw on in the reconstruction effort in Ukraine,’ said Minister of Trade and Industry Cecilie Myrseth.

For 2024, the Government propose some NOK 250 million to be set aside for Norfund investments in Ukraine. The funding will be allocated under the Nansen Support Programme for Ukraine. The Government aims to continue this initiative in the years ahead.

‘Norfund has a long history of successful investments in areas where many others do not dare. They have proven they can make a real difference. In Ukraine and other developing countries, the gap between needs and available financing is widening. Reducing this gap will not be possible without engaging the private sector. Norfund’s investments can help achieve this,’ said Minister of International Development Anne Beathe Kristiansen Tvinnereim

Norfund largely provides equity investments, which entails higher risk than the loans and guarantees offered by other development finance institutions and the multilateral banks. This type of capital is crucial to develop vital, sustainable projects.

‘We see this as a vote of confidence in Norfund’s expertise in investing and delivering results in challenging markets. We are looking forward to getting started and helping to alleviate the difficult situation in Ukraine,’ said Tellef Thorleifsson, CEO of Norfund.