German companies are expressing a growing willingness to travel to Ukraine despite the war, according to a survey by the Eastern Committee of the German Economy.
The survey of around 70 German companies interested in doing business in Ukraine showed that employees from 28 firms have already visited the country since the 2022 invasion or are based there, the Eastern Committee said in a press release on Tuesday. Another 24 companies are seriously considering sending a representative soon for their first war-time visit to Ukraine.
German businessmen are most interested in the capital, Kyiv, which is mentioned 25 times, as well as the western regions near Lviv (15 mentions), followed by the southern regions around Odesa and Mykolaiv (7 mentions).
"Despite the fact that the German government is still warning people about traveling to Ukraine, there is clearly a growing willingness to travel to Ukraine," said Eastern Committee Managing Director Michael Harms, who sees potential for German companies in growth sectors such as construction, defense, agriculture, IT, and renewable energy.
The main obstacles to engagement in Ukraine continue to be uncertain insurance coverage for personal travel and the lack of financing for investment projects. Only 20 of the companies surveyed believe their employees are adequately insured against war damage, 19 companies have been able to at least partially insure their staff, and 29 companies say they do not yet have suitable insurance cover.
As for securing new investments in Ukraine and export business with Ukrainian partners, the German government has kept its guarantee instruments open for German companies despite the war, but these have not yet had the desired effect, the survey showed. Many companies that want to push ahead with projects in Ukraine complain that access to financing is still inadequate.
"Due to the negative rating of Ukraine by international rating agencies due to the war situation, private financial institutions are still having a hard time obtaining project financing," said Harms. "We are waiting for impetus here from the announced establishment of a reconstruction bank for Ukraine based on the model of the German KfW and from mixed financing models in which public banks in donor countries take on a large part of the default risk from the private sector in return for a share in later profits."
Although Germany is one of Ukraine's strongest financial supporters, German companies rarely win project tenders because the funds are not tied to the participation of German suppliers, the surveyed companies said. Instead, the Ukrainian government issues tenders in which the cheapest bid almost inevitably wins, rather than the best.
Despite various efforts such as the reconstruction conference in Berlin, only 15 companies in the survey said the investment climate in Ukraine had noticeably improved this year. The picture is now more positive when it comes to corruption and the rule of law, which were cited as the main obstacles to economic engagement in Ukraine before 2022.
The results of the current Ukraine survey will be incorporated into the work of the Business Advisory Council, an advisory body made up of high-ranking business representatives from the G7+ countries and Ukraine, currently chaired by the Eastern Committee Deputy Chairman and Siemens Energy CEO Christian Bruch, as per the statement. The survey will also serve to prepare for the 7th German-Ukrainian Economic Forum, which will take place in Berlin on December 11.
Eastern Committee is the largest regional initiative of the German economy for 29 countries in Russia, Eastern, Central and Southeastern Europe, and Central Asia. They represent the interests of German companies in these regions and promote economic relations.
