ECI & Ukraine: Support for reconstruction

On Oct. 6, 2023, the government announced the third support package for Ukraine of €102 million: €42 million for rehabilitation and reforms in liberated areas and €60 million for export credit insurance aimed at reconstruction and investment in the Ukrainian economy.

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

We spoke with Roderick van Schreven, Special Envoy for Ukraine at the Ministry of Foreign Affairs since July 23, 2023. He is a top diplomat with experience as ambassador to the Middle East, the United Nations and the World Trade Organization (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 the 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 have close contact among ourselves. 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, like us, now have a very effective approach to export credits. From those experiences we learn again.”

How is the Netherlands already helping Ukraine?

“The Netherlands is one of the largest individual donors to Ukraine worldwide. 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 weapons 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 organizations such as the IMF, the World Bank and the European Bank for Reconstruction & Development (EBRD) and the European Investment Bank (EIB) that specialize in long-term financing for fragile countries. The Netherlands also stands out 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 assistance?

“We were early to support Ukraine in this war and for good reason. Consider 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 must rise. If it remains low, it will not benefit the European market in the event of membership. Fortunately, Ukrainians are incredibly driven and there are many successful companies. There is a lot of experience in heavy industry and of course the expertise in IT and cyber security, which are among the top worldwide. Therefore, I am optimistic. When 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 the field of agriculture is of a high level. We launched the Ukraine Partnership Facility (UPF) in 2023 with €25 million in grants for Dutch organizations that want to help. Very successful, as we received so many applications that a sequel is being considered. The UPF focuses on the economic sectors of water, agrifood and health care. 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. No one 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 arrangements available and engage in that conversation.”

What about the risks?

“Let there be no mistake: Ukraine is in a state of war. The risk of destruction is real. Yet we are calling on our companies to contribute to reconstruction. The companies I spoke to have genuinely shown me that they want to use their knowledge and skills for a higher purpose. 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 ekv is ideally suited to deal with challenging economic conditions and 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.”

Export with the ECI to Ukraine. How it works.

The government has made €60 million available to cover payment risks for export transactions to Ukraine.
In practice, this can enable double, 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. 
Applications are welcome from both SMEs and large companies for all common 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

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For questions regarding the support package for Ukraine, please contact:

Niek van der Beek, Deputy Head of SMEs & Business Development, Atradius Dutch State Business at info.dsb@atradius.com.