Finland-Ukraine Investment Facility (FUIF) Introduced to Support Public Sector Projects in Ukraine

The Government of Finland started preparations to launch in early 2025 its new line of credit enabling funding for public sector investments that need to align with the UN Sustainable Development Goals and contain Finnish equipment, technology and expertise.

The instrument is dubbed Finland-Ukraine Investment Facility (FUIF) and slated to provide blended finance for investment plans worth between EUR 10 and 20 million under the public finance governing regime.

FUIF will employ a concessional credit financing mechanism through a guarantee by the Finnish Export Credit Agency (FINNVERA) and indirect grant to compensate or eliminate the interest. The community will be a beneficiary and the lender of record – Finnish or international bank approved by FINNVERA – will be disbursing the money to the Finnish company – a private sector supplier for the purposes of reconstruction and resilience, provided, however, that:

• the project is economically viable but commercially non-viable, i.e. it contributes to sustainable development goals without sufficient revenue to be bankable otherwise;
• the investment addresses sustainability, and includes any supporting activities that may be needed;
• Finnish content (equipment, technology, or know-how) constitutes at least 33% of the project’s value; and
• public procurement laws of Ukraine are complied with.

The Ministry of Finance of Ukraine will be the borrower of the record under the loan, which is made interest-free through the interest subsidy (grant element) by the Finnish Ministry of Foreign Affairs to the lender:

• at least 35% of the funding is structured as a grant equivalent;
• FINNVERA provides a 100% loan guarantee.

The FUIF initial amount is going to be EUR 50 million, with the Finnish Ministry of Foreign Affairs expecting to pre-approve, together with the Ministry of Foreign Trade and Development of Finland, all the individual projects within the course of 2025. To our knowledge, the consultations with the potential applicants – public sector entities – have started in Q4 2024.

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NB! The FUIF program is much like but not to be confused with a UIF (Ukrainian Investment Framework), EUR 9.3 billion worth private sector arm of 50 billion Ukraine Facility by the EU. We reported on latest call for proposals under UIF earlier in December. Ukrainian public sector entities involved in reconstruction efforts are encouraged to align their investments goals with UIF and FUIF criteria to leverage this opportunity.