KfW on behalf of the German government boosts institutional evolution of the Business Development Fund
Today, on November 22, on behalf of the Federal Ministry for Economic Development and Cooperation (BMZ), KfW signed today a grant agreement for up to EUR 1 million with the Business Development Fund (BDF) to finance a comprehensive reform of BDF. The signing ceremony was conducted in presence of representatives of the Embassy of Germany in Ukraine and the Ministry of Finance of Ukraine, who is BDF’s single shareholder.
The grant agreement provides funds for attracting of an international consulting company that shall support BDF in improving its corporate governance, defining its mandate as well developing institutional capacity in such aspects as strategy, business model and business processes.
“Ministry of Finance of Ukraine appreciates KfW’s initiative to apply to the German Government regarding financing of the BDF’s institutional development projects in amount of up to EUR 1 million. Such decision is based on the long-time cooperation in the area of SME support and development. Successful implementation of such projects helped the Ukrainian businesses not only withstand the pandemic and the war, but also find new development opportunities. A vivid example of such partnership is the state program “Affordable loans 5-7-9%” supported by KfW. Experts estimate that the program has supported 90% of all loans since the beginning of the full-scale war,” stated Yuriy Draganchuk, Deputy Minister of Finance for European integration and Chairman of the BDF Council and also expressed confidence hat implementation of the new project shall improve BDF’s operations to level of the highest international standards and shall support achieving of even better results in the extremely important sphere of entrepreneurship development in Ukraine.
“BDF as former German-Ukrainian Fund was set up by KfW on behalf of the German government, the National Bank of Ukraine, and the Ministry of Finance of Ukraine. Since 1999 it is our longstanding and reliable partner for providing access to finance for micro-, small, and medium sized businesses in Ukraine. We are pleased to extend our cooperation with BDF and MoF enabling BDF to provide economic support to businesses during the war and in the future”, said Marcus Koll, Head of Cooperation at the German embassy to Ukraine.
“BDF remains a key provider of the state support under the program 5-7-9, which was partially financed by KfW in 2022 but also under the projects financed by the German government and EU. It’s a pleasure seeing BDF prepare for the new step towards a full-fledged development finance institution. We would like to acknowledge the great support of the Ministry of Finance of Ukraine and to thank our Ukrainian counterparts for the cooperation in the project preparation. BDF, set up as a strong financial vehicle according to the best international practice shall not only serve as a sustainable and transparent instrument to promote Ukrainian businesses but also contribute to Ukraine’s resilience during war, dynamic reconstruction, and transformation in the post-war context, and eventually EU integration,” stated Lorenz Gessner, Head of KfW Representative Office in Ukraine.
“The decision to allocated a grant for the BDF’s institutional development is a decisive event since it determines BDF’s further strategy and mandate in long term. 27 years ago KfW cofounded the BDF and became a reliable partner during the Fund’s formation and development. We are proud that, as a result of successful completion of numerous project, KfW further views the BDF as key institution for implementation of the SME support and development programs, including in the post-war reconstruction context,” stated Andriy Gapon, Executive Director of the BDF.
The event was also attended by KfW Ukraine Project Portfolio Manager Liudmyla Hordiuk, KfW Ukraine Project Coordinator Vasyl Stelmakh and Deputy Executive Director of the Fund Valeriy Mayboroda. The meeting was held in a mixed online/offline format.