Today's Newsletter Contents
Just The Facts:
- DTEK announces €450 million expansion of Tyligulska wind farm in largest investment since Russian full-scale invasion
- Polish state development fund PFR makes foray into Ukraine with Euvic debt investment financing deal
- Germany's KNDS establishes JV in Ukraine to repair military equipment
- Zelensky stresses concern over Europe's relevance to US in Davos speech
- Ukraine economy minister, J.P. Morgan exec discuss financial guarantees backed by international donors
- Swiss government agency calls for proposals to join Ukraine's reconstruction in CHF 500 million program
- DFC to lend Ukraine's Astarta $40 million for soy protein processing plant
Here's What They Think:
- Carnegie Endowment: Europeans need to present strategy to secure Ukraine as Trump takes office
- TIME: Trump could trigger Putin's regime downfall
- Foreign Affairs: Western hopes that economic issues will force Putin to end the war overly optimistic
Sober Second Thought:
- EU, Ukraine could immensely benefit from joint reconstruction effort, study by Wilfried Martens Centre finds
DTEK announces €450 million expansion of Tyligulska wind farm in largest investment since Russian full-scale invasion
Ukraine's largest private power producer DTEK said on Wednesday it plans to invest €450 million to expand its Tyligulska wind farm on the Black Sea coast, marking the largest private sector investment in Ukraine since the beginning of the Russian full-scale invasion.
The announcement was made after DTEK reached a financing agreement with lenders to buy 64 wind turbines from Vestas, with an aim to expand Tyligulska's capacity to 500 MW from 114 MW. Tyligulska currently has 19 installed turbines.
DTEK said in a press release it will borrow €370 million from banks, with loans being backed by guarantees from the state-owned Export and Investment Fund of Denmark (EIFO). The company will finance the remaining cost of the project from its own funds.
DTEK plans to accelerate construction this year, with cabling and foundations already in place, aiming for completion by the end of 2026, as per the statement.
At full capacity, Tyligulska will generate 1.7 TWh of electricity annually, enough to power 900,000 Ukrainian homes.
In addition to Tyligulska, DTEK plans a 650 MW wind farm in Poltava, central Ukraine, as part of its goal to achieve a 2 GW renewable portfolio in Ukraine by 2030.
DTEK noted that the construction is already underway to install 200 MW of large-scale battery storage across the country by next October. Meanwhile, the company's EU subsidiary, DTEK Renewables International, is developing wind, solar, and battery projects in Italy, Romania, Poland, and, Croatia.
Polish state development fund PFR makes foray into Ukraine with Euvic debt investment financing deal
PFR TFI, the mutual funds arm of Polish state development fund PFR, said it has signed an investment agreement to provide debt financing for Polish IT group Euvic's acquisition of stakes in five Ukrainian tech firms, marking PFR's first financing of investment in Ukraine.
Two of the target companies are based in Lviv, while the others are in Kyiv, Kharkiv, and Vinnytsia.
Polish export credit agency KUKE, part of the PFR Group, will insure the transaction, PFR TFI said in a press release on Tuesday.
PFR TFI stated that it will make the investment through its Foreign Expansion Fund 2, without disclosing its size.
Polish business outlet Puls Biznesu reported that PFR TFI will lend Euvic $2.5 million.
"Ukraine is a particularly interesting destination for us. Poland's location means that we can play a significant role in the process of its reconstruction, as a logistics hub, construction, and capital base, but also as a partner in the area of IT, innovation, and technology," Piotr Matczuk, chairman of the PFR Group council, said.
Tomasz Orlik, a member of the board at PFR TFI, said the fund looks at the Euvic project in a strategic way.
"Almost from the beginning of Russia's invasion of Ukraine, people have been talking about the needs, but also the possibilities related to the reconstruction of Ukraine. The sooner we are on the ground as Polish businesses and financial institutions - the greater our chances of participating in the reconstruction," Orlik said.
Germany's KNDS establishes JV in Ukraine to repair military equipment
KNDS, a German manufacturer of Leopard 2 tanks, has established a joint venture with a Ukrainian defense company, Ukraine's Minister of Strategic Industries Herman Smetanin said on Tuesday.
The newly created company will focus on the maintenance and repair of military equipment supplied by Germany to Ukraine's defense forces.
Ukrainian specialists have already completed training in Germany, and the initial systems have been installed at the new facility, said Smetanin via the Telegram messaging app.
"This is extremely important for our defense capability - because now the equipment will be repaired faster," Smetanin added, noting that this means a quick return of military equipment to the frontline.
Smetanin highlighted that the new JV will support the economy with investments and jobs.
Ukraine plans to invest $35 billion in weapons production in 2025, with $17 billion to be financed by the government, Ukraine's Defense Minister Rustem Umerov announced via Facebook last week. The plan was announced following a meeting with defense ministers of Poland, Germany, France, Italy, and the UK.
"The defense ministers reaffirmed that military assistance to Ukraine will continue, as it is an investment in peace and stability on our continent," Umerov noted.
Zelensky stresses concern over Europe's relevance to US in Davos speech
Ukrainian President Volodymyr Zelensky urged Europe to prioritize unity, security, and technological leadership in his speech at the World Economic Forum in Davos.
"All eyes are on Washington," Zelensky noted, questioning Europe's visibility and influence on the global stage. He emphasized that Europe cannot afford to be "second or third in line" for allies' priorities.
Zelensky expressed concern about Europe’s diminished role in US strategy, citing past comments from American officials who placed Europe behind the Indo-Pacific and the Middle East in their security priorities.
Zelensky asked, "will President Trump even notice Europe? Does he see NATO as necessary? And will he respect EU institutions?"
The Ukrainian leader highlighted growing threats from Russia, comparing it to North Korea as a nation where "human life means nothing." Despite Europe's greater economic potential, he pointed out that Russia produces significantly more military equipment than all European countries combined.
Calling for stronger security guarantees, Zelensky stressed the need for collective defense across Europe.
"Russia can field about 1.3-1.5 million troops. We've got more than 800,000 in our military. Second after us comes France, with over 200,000," he stated, emphasizing that no single country can defend itself alone.
He also highlighted Ukraine's contributions to European security, from joint artillery production to advancements in drone technology.
"Investing now in Ukrainian drones' production is investing in the security of Europe," Zelensky said.
Technological development was another critical focus. Zelensky warned that Europe is falling behind in artificial intelligence and innovation, stating, "TikTok's algorithms are more powerful than some governments."
"Europe is not leading in the global tech race, falling behind both America and China," Zelensky said, adding: "This isn’t some minor issue — it's about weakness, first technological and economic, then political."
Zelensky emphasized the importance of Europe’s unity and relevance, both to itself and to global allies. "Europe must shape history for itself and its allies to remain not just relevant, but alive and great," he concluded.
Ukraine economy minister, J.P. Morgan exec discuss financial guarantees backed by international donors
Ukraine's Economy Minister Yulia Svyrydenko and J.P. Morgan Asset & Wealth Management CEO Mary Callahan Erdoes discussed financial guarantees for Ukraine with the support of international donors during a meeting at the World Economic Forum in Davos.
They also discussed how J.P. Morgan can support Ukraine amid the ongoing war with Russia, the country's Economy Ministry stated on Tuesday.
Svyrydenko "thanked J.P. Morgan for its leading role in implementing the Private Project Preparation Facility program — an important initiative for attracting private investment to Ukraine," the ministry said in a post on LinkedIn.
In February 2023, Ukraine and J.P. Morgan Securities signed a memorandum of understanding under which J.P. Morgan committed to advise Ukraine's government on attracting private investment for the reconstruction.
The parties also agreed at the time to include J.P. Morgan representatives in the group of advisors and representatives of the financial and investment sector, together with BlackRock, to help the government drive the investments into the country's recovery.
Swiss government agency calls for proposals to join Ukraine's reconstruction in CHF 500 million program
The State Secretariat for Economic Affairs of Switzerland (SECO) will on Jan 30 issue a call for proposals for Swiss companies operating in Ukraine to apply for co-funding of projects contributing to Ukraine's reconstruction and economic recovery under a previously announced CHF 500 million ($552 million) program.
To participate in the program, a company needs a subsidiary or a production site in Ukraine covering the country's acute needs, with an offering that includes products with Swiss quality as well as expertise for Ukraine.
A company also needs to provide a service in return for the funding, such as job creation or preservation, vocational training, or investments in Ukraine, among others, Deputy Head of Cooperation at the Swiss Embassy in Kyiv Silvan Hungerbuhler said on Tuesday at a presentation of the program.
SECO plans to financially contribute to several applicants with a total budget of up to CHF 50 million, with the selection taking place in two stages, Hungerbuhler stated.
The deadline for the submission of Stage 1 proposals using a standardized application form is Feb 28, while the submission of Stage 2 proposals will take place by March 30.
The final decision on the projects to be funded will be made public on June 16, and the finalization of the selected projects is expected by June 2028, according to Hungerbuhler.
The CHF 500 million program is part of a CHF 1.5 billion in funding by 2028, which the Swiss parliament approved in December to support Ukraine's recovery efforts. The remaining CHF 1 billion will be directed toward the self-government, demining, and humanitarian aid sectors.
DFC to lend Ukraine's Astarta $40 million for soy protein processing plant
The US International Development Finance Corporation (DFC) said it has approved at the sub-board level a $40 million loan to Ukraine's agro-industrial holding company Astarta for the construction and operation of a soy protein processing plant.
The facility is planned to have a designed annual capacity of about 100,000 tons, according to DFC.
Astarta will also use the funding for other investments, DFC said in a press release last week.
Separately, the International Finance Corporation (IFC) said in a project disclosure document in November that its board will make a decision on a $40 million loan to Astarta on Feb. 28, also for a soy protein processing plant.
The IFC noted at the time it also plans to mobilize a parallel loan of up to $40 million for the project.
Astarta plans to add a soybean deep processing line to its existing soybean crushing facility in the Globynsky industrial complex in Globyno in Ukraine's central region of Poltava, the IFC has said.
Astarta is one of the leading integrated agricultural producers and processors in Ukraine, which operates crop growing, soybean processing, sugar production, cattle farming and milk production, and biogas production.
Carnegie Endowment: Europeans need to present strategy to secure Ukraine as Trump takes office
With US President Donald Trump in office, Europeans must swiftly present a clear strategy to secure Ukraine, aiming to inflict a strategic defeat on Russia and prevent the erasure of Ukraine's sovereignty, Justyna Gotkowska, a deputy director of the Warsaw-based Center for Eastern Studies, wrote in an op-ed for the Carnegie Endowment.
This plan should include more military support, potential troop deployments, and restructuring US military presence in Europe while ensuring Ukraine's right to decide on its future alliances and resisting Russian demands on NATO or territorial changes, according to Gotkowska.
TIME: Trump could trigger Putin's regime downfall
US President Donald Trump has the ability to force Vladimir Putin to end the Russia-Ukraine war by leveraging economic pressure that the Biden administration has not fully utilized, which ultimately may lead to the end of Putin's rule in Russia, Jeffrey Sonnenfeld, president of the Yale Chief Executive Leadership Institute who also served as an informal advisor to five US presidents, and Steven Tian, research director of the Yale Chief Executive Leadership Institute who previously worked in the US State Department on Iranian nuclear nonproliferation, wrote in an op-ed for the TIME.
As Russia's economy falters, with Putin draining its resources to fund the war effort and facing a collapse in oil revenues, Trump's sanctions and increased oil production could push the Russian economy over the edge, leading to the downfall of Putin's regime, Sonnenfeld and Tian wrote. By targeting Russia's high-cost oil production and imposing tougher sanctions, Trump could accelerate the economic collapse and deliver a strategic blow to Putin's war machine, potentially bringing the war to a swift conclusion, the authors argued.
Foreign Affairs: Western hopes that economic issues will force Putin to end the war overly optimistic
US President Donald Trump's promise of a swift resolution to the war in Ukraine has prompted Kyiv and its allies to explore ways to secure a favorable deal with Moscow, leveraging economic sanctions as a key tool, which may not be as fruitful as expected, Alexandra Prokopenko, a fellow at the Carnegie Russia Eurasia Center in Berlin and a former adviser at the Russian central bank, wrote in an op-ed for Foreign Affairs.
While Russia's economy is strained, with unsustainable war spending and growing inflation, Western hopes that these issues will force Putin to end the war soon are overly optimistic, as the Kremlin can manage its economic challenges for at least another year, meaning the conflict could continue for the foreseeable future, according to Prokopenko.
EU and Ukraine could immensely benefit from joint reconstruction effort, study finds
The European Union and Ukraine have an unprecedented opportunity to foster mutual benefits through a collaborative reconstruction effort, with recovery needs estimated at $486 billion over the next decade to address damages inflicted by Russia's invasion, according to a study published by the Wilfried Martens Centre for European Studies.
The study highlights the severe economic toll of Russia's invasion of Ukraine, which has inflicted approximately $152 billion in direct damages to key sectors, including energy, transportation, and housing. Reconstruction needs are projected at $486 billion over the next decade, with energy requiring $47 billion, housing $80 billion, and transportation $74 billion. These sectors account for nearly 75% of the damage, underscoring their centrality to recovery plans.
Ukraine's energy sector has been significantly impaired, with 90% of thermal power plants and 60% of hydroelectric facilities destroyed, resulting in a 35% power deficit. The transportation sector, encompassing roads, railways, and ports, suffered over 30% damage, with key infrastructure rendered unusable. Housing and utilities also faced widespread destruction, leaving many Ukrainians without essential services like heating and clean water, the author noted.
The report emphasizes Ukraine's commitment to aligning its recovery with EU standards, particularly in modernizing its energy markets and infrastructure. Legislation such as the REMIT Law has been enacted to harmonize energy policies with the EU, fostering market transparency and integration. In transportation, Ukraine aims to adopt European rail standards and enhance cross-border connectivity through projects like the Solidarity Lanes initiative.
The study notes that Ukraine's renewable energy potential could play a pivotal role in its reconstruction, with a focus on expanding wind, solar, and hydrogen production. Currently, the country's renewable capacity has decreased from 10 GW to 8.7 GW due to the war, yet it retains significant untapped potential. For example, Ukraine could achieve an estimated 874 GW of renewable energy capacity, including 250 GW from offshore wind.
To support reconstruction, the study outlines recommendations for prioritizing funding mechanisms and partnerships. It highlights the importance of leveraging EU instruments like the Ukraine Facility and the Multi-agency Donor Coordination Platform to ensure efficient and transparent allocation of resources. Additionally, it calls for fostering public-private partnerships to attract investment in critical infrastructure projects.
In the energy sector, the report suggests accelerating grid modernization and boosting renewable energy capacity to enhance sustainability and energy security. It also recommends integrating Ukraine into the European Network of Transmission System Operators for Electricity to facilitate cross-border energy trade. Similarly, it advocates for investments in hydrogen production and infrastructure to position Ukraine as a strategic partner in the EU's decarbonization goals.
The study underscores the need for long-term planning in transportation, urging the development of intermodal logistics hubs and the adoption of European track width standards. These efforts aim to transform Ukraine into a vital transport hub, enhancing trade links with the EU and bolstering regional economic resilience. Furthermore, upgrading road and rail infrastructure could support the export-oriented economy and facilitate post-war recovery.
By aligning reconstruction with EU standards and fostering collaborative initiatives, the report concludes, Ukraine and the EU can achieve shared economic growth and resilience. This partnership promises to not only rebuild Ukraine but also strengthen its integration into the European community, ensuring long-term stability and development.
The study's methodology involved a comprehensive review of primary and secondary data sources, including laws, regulations, damage assessments, and publications from think tanks and international organizations.
Svyrydenko Meetings in Davos
Ukrainian Economy Minister Yulia Svyrydenko met with ArcelorMittal CEO Lakshmi Mittal in Davos to discuss "the steps the Government can take to overcome the challenges facing the metallurgical industry in Ukraine," the Economy Ministry posted.
She also met with J.P. Morgan CEO Mary Callaghan Erdos to discuss the Private Project Preparation Facility program and with A.P. Moller-Maersk Chairman Robert Maersk Uggla to discuss privatization in Ukraine and public-private partnerships.
Finance Minister Meets DG Near Chief
The Ministry of Finance of Ukraine posted that Finance Minister Sergii Marchenko met with Gert Jan Koopman, the Director-General for Neighbourhood and Enlargement Negotiations (DG NEAR), to discuss "key areas of cooperation."
The two discussed the Ukraine Facility, which is set to provide €12.5 billion in budget support to Ukraine this year, and the Ukraine Donor Coordination Platform, whose steering committee meets in April to discuss Ukraine's financial needs.
'Better than Biden'
Tymofiy Mylovanov, president of the Kyiv School of Economics, highlighted an article in the Politico newspaper quoting him as saying the Ukraine situation, under Trump, will be "much better than under Biden."
"Biden managed the war as a crisis," Mylovanov said. "He thought if he holds out long enough, the storm will pass. But it's not passing. Trump takes the perspective that we have to stop the storm."
AI in 2025
The IT Ukraine Association promoted an article by its CEO, Maria Shevchuk, outlining key trends in the IT market in 2025, including the evolution of general artificial intelligence into a "strategic asset that defines the competitiveness of businesses and nations."
Another significant trend, the post states, is "the development of sovereign AI as governments aim to localise data processing and establish their own cloud platforms to reduce reliance on foreign technologies."
Ukraine Startups Look to UK
The UK-Ukraine TechBridge posted that, in partnership with the Ukrainian Startup Fund, it has helped Ukrainian startups gain direct access to the UK business ecosystem, "providing a clear pathway to market entry."
So far three Ukrainian companies have presented their businesses, including EdTech firm CASES, cybersecurity provider FS Group and educational firm Sigma Software University.
New Kyiv Office for BASF
Cezary Urban, country head for agricultural solutions for BASF Ukraine, posted that BASF has moved into its new office in Kyiv, which "will become a convenient space for teamwork and collaboration and will foster creativity."
"Our new office features modern amenities all designed to foster teamwork and creativity. With spaces that cater to both professional needs and personal well-being, I am confident that this environment will inspire our team to reach new heights," posted BASF Ukraine Managing Director Tiberiu Dima.
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