Though German support for Ukraine is one of the largest, companies from Germany are rarely included in tenders for projects implemented in Ukraine – this application from the survey of the Commission for the Eastern German Economy published on Tuesday. This association represents the interests of German companies involved in the region of Central and Eastern Europe and Central Asia. Research participants believe that the problem is that German support is not linked to the condition that German bidders also participate in the projects.
German companies are cautious about engaging in Ukraine
According to the Eastern Commission, as a result, orders often go to Turkish or Chinese suppliers, because the cheapest, not the best offer, usually wins. In general, German companies are somewhat reluctant to engage in Ukraine, even despite the growth of the Ukrainian economy and the significant increase in German-Ukrainian trade. The Eastern Commission notes that despite the war, as a result of the Russian invasion of Ukraine, the number of business trips of representatives of German companies to Ukraine is increasing, especially to Kiev or the western region around Lviv. The sectors in which the committee sees the greatest potential for German enterprises are construction, the arms industry, agriculture, the IT industry and renewable energy.
No investment security
The main obstacles to business activity in Ukraine are still – in the opinion of the companies themselves – uncertainty regarding insurance coverage during personal trips and the inability to finance investment projects. – Due to the negative assessment of Ukraine by international rating agencies as a result of the war situation, it is still very difficult for private financial institutions to provide financing for projects – noted Michael Harms, managing director of the Eastern Commission of the German Economy. This too reasonfor which the efforts of the German government so far have been on thing investment hedging has not been a great success so far. Ukrainian language has not yet been created bank reconstruction, which would be modeled on the German bank KfW. According to the Eastern Commission, almost only companies that are able to finance projects with equity capital or fit the mold of one of the international development banks are active.
Despite the conference on the reconstruction of Ukraine organized in Berlin and the promise to improve business conditions in the country, only 15 out of 68 surveyed companies stated that the investment climate in Ukraine has noticeably improved since the beginning of 2024. In turn, visible progress in the fight against corruption was pointed out.
The article comes from the website Deutsche Welle.