As international discussion continues over the reconstruction of postwar Ukraine, work on rebuilding the country is already underway, and partnerships are emerging that may shape the future recovery agenda. In what the British government called an unprecedented transaction from any export credit agency, UK Export Finance issued a landmark buyer credit loan guarantee in June 2023 that allows the Ukrainian government to access financing from Citi, unlocking crucial funds for Kyiv Oblast Road Service. The approximately Euro 30 million financing will support the rebuilding of bridges in areas to the north of the Ukrainian capital that were damaged during the brief period of Russian occupation in the first months of the war.
Alexander McWhorter, Head of Citi Ukraine, sees this recent credit loan guarantee agreement as an important step as the bank prepares to play a prominent role in efforts to finance Ukraine’s recovery. “We want to be a key player and are confident we have much to contribute to this process,” he says. “We believe we can bring our global expertise, our global network, and our global clients, combined with our 25-year history on the ground in Kyiv, to support Ukraine’s leapfrog forward in terms of national infrastructure and international investment.”
McWhorter says Citi is currently engaging with a range of state agencies, financial institutions, and the bank’s corporate clients to make sure they are in a position to move forward as quickly and effectively as possible once the security situation in Ukraine allows. He anticipates that while hostilities continue, the bulk of international financing will come from public sector partners. Once there are clear indications of a durable peace, he expects to see a parallel surge in private sector activity. “We aim to make a significant contribution at every stage of the process,” he says.
Many are already predicting that the postwar reconstruction of Ukraine will be one of the biggest investment undertakings in modern European history, with potential overall budget estimates running well into the hundreds of billions of US dollars. Given the scale of the destruction caused by Russia’s full-scale invasion and the strength of international backing for Ukraine, these forecasts may well be justified. “The numbers that are out there are high,” acknowledges McWhorter.
He notes that international financing is set to become increasingly more available in the months and years ahead, and that Ukraine should be prepared. “Ukraine should ensure that it is working with both public sector and private sector partners to make sure there is a coherent and coordinated strategy in place around the recovery process, and that the necessary governance and accountability frameworks are clear, transparent, and in line with international standards,” says McWhorter. “People need to have complete confidence that the money is going where it needs to go. Ukraine has made some great progress already toward establishing the right kind of structures, but there is still more work to be done.”
Citi’s preparations to help facilitate the reconstruction of Ukraine are progressing against the backdrop of a gradually improving business climate in the country. McWhorter recounts how the initial months following the start of Russia’s full-scale invasion were dominated by efforts to secure the safety of the bank’s employees and provide crisis support for clients. Citi was able to call upon the backing of the bank’s international network, with colleagues in neighboring countries such as Poland and Romania providing critical support to staff members from Ukraine and their families. The bank also established a multi-million dollar fund that has supported international humanitarian efforts as well as local charities working with Ukrainian hospitals.
McWhorter says that the bank has been on the ground every single day since the invasion started supporting clients and the country. Once the initial shock of the invasion passed, there were soon signs of a revival in business activity. He speaks admiringly of the resilience on display as the bank’s corporate clients adapted their supply chains and redirected distribution away from Ukraine’s blockaded Black Sea ports; he also notes that some of Citi’s commercial banking clients have managed to enter new global markets despite the challenges presented by wartime conditions. “Whether it is a question of finding new export routes or sourcing electricity generators, the adaptability and resourcefulness displayed within the Ukrainian business community has been absolutely incredible. I see this within my own team and among our clients as well. Quite frankly, I do not know if many other countries could have produced the same response.”
About the interviewee: Alexander McWhorter is the Head of Citi Ukraine (Citi Country Officer) and Corporate Bank Head in the country.