ECA & Ukraine: capital goods for reconstruction

 

 

 

A special scheme to give Dutch exporters opportunities to do business with Ukrainian buyers.

We spoke to Roderick van Schreven, Special Envoy for Ukraine at the Ministry of Foreign Affairs since 23 July 2023. He is a top diplomat with experience as ambassador to the Middle East, the United Nations and the World Trade Organisation (WTO) in Geneva.

 

 

 

 

 

 

 

 

 

 

 

 

What does the position of special envoy entail?

Roderick van Schreven: "A special envoy is an ambassador who represents the Netherlands on certain focus themes. For example, we have one in the areas of water and human rights. In the case of Ukraine, what makes it special is that the role is really focused on the economic relationship we have with the country. Part of my work is international consultations at diplomatic level, with governments but of course also a lot directly with Dutch and Ukrainian companies. I visit those as well. Incidentally, we are not the only country with an envoy like me. We are in close contact with each other. And that is very useful. How do you deal with security aspects and how do you involve the right companies? Poland (KUKE) and Denmark (EIFO), for example, have a very effective approach to export credits just like we do now. From those experiences we can learn ."

How is the Netherlands already helping Ukraine?

"Wrldwide, the Netherlands is one of the largest individual donors to Ukraine. Since the invasion in early 2022, many billions have already been committed worldwide to assist Ukraine in this difficult time. We distinguish two types of aid: military and non-military. Military aid is about arms and ammunition. Non-military aid consists of budget support and things aimed at critical rehabilitation, reconstruction and humanitarian assistance. For both types, much of the money goes through existing channels. These include multilateral organisations such as the IMF, the World Bank and the European Bank for Reconstruction & Development (EBRD) and the European Investment Bank (EIB) that specialise in long-term financing for fragile countries. The Netherlands also distinguishes itself in its direct aid: donations that go to predetermined goals, such as maintaining and strengthening the energy grid, hospitals but also food supplies and cybersecurity."

 

 

 

 

 

 

 

 

 

 

What are the motivations behind our aid?

"We were early to support Ukraine in this war and for good reason. Remember the annexation of Crimea in 2014 and certainly the MH-17 disaster. What is also in play is Ukraine's concrete desire to join the EU. We want to support that but before that happens, Ukraine's prosperity needs to rise. If it remains low, it will not benefit the European market upon membership. Fortunately, Ukrainians are incredibly driven and there are many successful companies. There is a lot of experience in heavy industry and, of course, expertise in IT and cyber security, which are among the top worldwide. I am therefore optimistic. If you visit Kyiv, you immediately notice that it is just a fully functioning metropolis, despite the danger."

What role do you see for Dutch exporters?

"Ukraine has been an important trading partner for the Netherlands and many other European countries for much longer. The exchange we have in agriculture is of a high level. We launched the Ukraine Partnership Facility (UPF) in 2023 with €25 million in grants for Dutch organisations that want to help. Very successful, as we received so many applications that a follow-up is being considered. The UPF focuses on the economic sectors of water, agrifood and healthcare. These include seed potatoes, drinking water installations and strengthening/heating of greenhouses. I speak to many Dutch entrepreneurs and the enthusiasm is great. Many already have experience with Ukrainian business relations, or have been in contact for some time. The Ukrainians themselves, as potential partners of our companies, are also very passionate. Nobody is going to wait until the war is over. Of course, I also understand that the threshold is high. And that is precisely why we make a wide range of schemes available and enter into that conversation."

What about the risks?

"Let there be no misunderstanding: Ukraine is in a state of war. The risk of destruction is real. Yet we are appealing to our companies to contribute to reconstruction. The companies I spoke to showed me sincerely that they want to use their knowledge and skills for a higher cause. This social decisiveness has positively surprised me and motivates me to reach out to even more entrepreneurs who can really do something for the country. The eci is ideally suited to deal with challenging economic conditions and can give that necessary push for costly investments by parties in Ukraine. The beauty of this is that this is not an isolated event; eventually, we all want everything to get back on track and also increase the role for the private sector and trade flows. Until then, we as a government will help where we can."

 

 

 

 

 

 

 

 

Exporting with the eci to Ukraine. How does it work?

• The government has made €60 million available to cover payment risks for export transactions to Ukraine.
• In practice, this can enable the double amount, i.e. €120 million, of export transactions.
• The facility is intended for export transactions that contribute to reconstruction.
• Transactions will be assessed for the usual risks: financial, environmental, social and compliance. Normal minimum domestic component rules will also apply.
• Applications are welcome from both SMEs and large companies for all usual products, with a possible cap per transaction given the €60 million limit.
• Transactions with a maturity of less than one year are also eligible for coverage.

Contact

Curious about how Atradius Dutch State Business' products can contribute to the growth of your business?
Visit our product page

For questions regarding the support package for Ukraine, please contact:
Niek van der Beek, Deputy Head of SME’s & Business Development, Atradius Dutch State Business via info.dsb@atradius.com