Austria creates €500 million fund to support investment in Ukraine

Austria has announced the creation of a special fund which aims to allocate up to €500 million over the next five years to support Austrian exports to Ukraine.

According to the Austrian Foreign Ministry, the fund was established by the Austrian Ministry of Finance and the Austrian export credit agency OeKB. 

Raising funds from international financial institutions could even increase the amount of funding to one billion euros, the message reads.

Approximately €100 million per year is earmarked for new business. This will also open up opportunities for Austrian exporters in the reconstruction of Ukraine.

It is reported that within the existing and tested export promotion procedure, the Austrian Ministry of Finance already facilitates export deals worth €3-5 million in Ukraine with payment terms of up to three years through OeKB.

Since funds are limited and the goal is to achieve broad risk diversification, particularly in terms of supported sectors, small and medium-sized deals in the public sector based on state guarantees will be possible in the first phase.

"This will enable us to make vital investments for Ukraine. These include the supply of drinking water and heating, the provision and restoration of the transport sector with roads, bridges, and railway infrastructure, as well as supply and investment deals such as joint workshops for buses, trams, and trains," said Austrian Finance Minister Magnus Brunner.

Applications for projects within the Fund for Ukraine can be submitted to OeKB from mid-May 2024.

Earlier this week, the Austrian group Raiffeisen announced it was abandoning the purchase of a stake in the construction group Strabag, linked to the sanctioned Russian oligarch Oleg Deripaska, which the bank had sought to use to unlock frozen funds in Russia.

Raiffeisen Bank International announced its intention to reduce its business in Russia in the spring of 2022. A year later, in the spring of 2023, the group reported that it was considering two exit scenarios – selling the subsidiary or removing this asset from Raiffeisen Bank International. Neither has been implemented so far.

Recently, a group of MEPs sent an open letter to the Austrian authorities, expressing concern over plans by Raiffeisen Bank International to hire new staff in Russia.