Ukraine counts on UAE wealth funds to build its economy

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Ukraine has invited UAE sovereign wealth funds and companies to participate in the country’s economic transformation and building strategy as well as in strengthening trade cooperation between the two nations.

During a meeting to discuss financial and humanitarian support as well as investments in recovery and bilateral cooperation, Ukraine’s Minister of Economy Yuliia Svyrydenko thanked the UAE for the humanitarian and financial aid it has extended to the Eastern European nation.

Abu Dhabi Investment Authority and ADQ – UAE wealth funds with assets in industries such as rail and air transport, port logistics, full-cycle agriculture, medicine and pharmaceutical production, energy and innovative technologies were also in attendance.

Ukraine presented its economic transformation strategy to the UAE delegation and invited UAE funds to participate in the development of the Ukrainian Development Fund, a sovereign wealth fund initiative that has secured advisory support from BlackRock.

The Ukrainian government said is counting on the UAE’s active participation in its economic transformation strategy.

The UAE has sent Ukraine more than 230 tonnes of humanitarian aid – medicines, medical equipment, food – and 4 ambulances, according to a statement on Ukraine’s Government website. In April, the UAE transferred $4m for the construction of 10 orphanages and another donated $4m for the construction of 10 family-type orphanages in Ukraine.

To support Ukraine in overcoming the energy crisis, the UAE sent 2,500 generators as part of a $100m humanitarian aid provided by the UAE leadership.

“Ukraine undoubtedly considers the UAE as an important economic partner in the Middle East region and shares a mutual interest in improving the balance of bilateral trade by creating the right conditions for trade, business development and investment,” said Svyrydenko.

Ukraine, UAE trade deal

Meanwhile, the UAE and Ukraine agreed to begin talks on a bilateral trade deal that is expected to conclude by the middle of next year in December 2022. In March, the two sides reviewed the latest developments towards the signing of a comprehensive economic partnership agreement (CEPA).

“The conclusion of the CEPA agreement will make our economies complementary, and we look forward to working together to promote trade, digital economy and investment cooperation between our countries, while practical interaction with leading strategic advisers, Contango, will allow us to adapt the best practices of the UAE,” Svyrydenko said.

The UAE is Ukraine’s second largest GCC trade partner as of 2021, and the non-oil trade between the two countries exceeded $388m (Dhs1.4bn) in 2022.

The Emirates’ investments in Ukraine totalled $100m in September 2020, making the UAE the largest Arab investor in Ukraine. Meanwhile, Ukrainian FDI in the UAE reached $84m in the beginning of 2021, mostly in real estate, retail trade, manufacturing, transportation, warehousing and technology sectors.

The UAE’s investments in Ukraine span many sectors including manufacturing, transportation, storage, gas, retail trade, real estate and agriculture.

The CEPA agreement will lay the groundwork for freeing up trade flows between the two countries. The UAE has so far concluded five trade agreements with India, Israel, Indonesia, Turkey and Cambodia, and the first two have already come into force.

The Gulf state is also in talks with more markets of strategic importance at the regional and global levels to establish similar agreements.

Read: UAE signs bilateral trade deal with Cambodia