Monday, June 17, 2024

Polaris of Enlightenment

Monday, June 17, 2024

Polaris of Enlightenment

JP Morgan boss: Ukraine a “tremendous opportunity”

The war in Ukraine

Published 4 July 2023
- By Editorial Staff

The war in Ukraine is not negative for everyone. According to JP Morgan CEO Stefan Weiler, there is now a “tremendous opportunity” for private investors to invest in Ukraine’s future. BlackRock CEO Brandon Hall agrees, saying that now is the time to “attract as much private capital as possible to rebuild Ukraine”.

Powerful financial giants BlackRock and JP Morgan are involved in rebuilding Ukraine and attracting private investors. More than 400 global companies have now pledged to contribute in various ways to the post-war project, it was announced at the recent Ukraine Recovery Conference in London.

The financial firm Citi, the pharmaceutical company Sanofi and the electronics giant Philips are three of the players that have declared their intention to expand their investments in the country, the left-liberal Warner Bros. Discovery channel CNN reports. Meanwhile, both the UK and US governments are pledging further aid packages, with the UK providing $3 billion in new guarantees to unlock World Bank loans and £240 million in bilateral aid. The U.S., in turn, is promising to send an additional $1.3 billion to help Ukraine “overhaul its energy grid.”

The price tag for rebuilding the country has so far been estimated at at least $411 billion. But according to JP Morgan CEO Stefan Weiler, the war is not all bad, as private investors see a “tremendous opportunity” to invest in Ukraine’s future. Wiler says he is impressed by how “forward-looking” the Zelenskiy government is in its vision for the future.

The Ukraine Development Fund is still in the planning stages and is not expected to be launched until after the conflict, but according to Brandon Hall, head of BlackRock’s financial markets advisory business, now is a good time to sell the idea and “attract as much private sector capital into the reconstruction of Ukraine as possible”.

The fund aims to raise so-called concessional capital from governments and development banks, and then use it to attract private investors. Concessional capital is provided on more favorable terms and can include loans at below-market interest rates or equity from investors who require lower returns, CNN reports.

– The idea here is you can scale that initial concessionary capital by some orders of magnitude and thereby increase the firepower of the fund to invest across various sectors of the economy, the BlackRock CEO explains.

The five areas most in need of investment are infrastructure, energy, manufacturing, agriculture and “information technology”, according to the Ukrainian government.

We will be able to offer interesting projects to invest in… We want global partners to come who can provide us with large investments, says Zelensky himself.

Private equity firm Horizon Capital has also received backing from a dozen major development finance institutions for its funds that invest specifically in Ukrainian technology and export-oriented companies, and in April raised $254 million, the largest Ukraine-focused fund since the outbreak of the war.

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