€40.5 million from KfW to support Ukrainian businesses

On the sidelines of the Ukraine Recovery Conference 2025 (URC2025) in Rome, the Business Development Fund signed a grant agreement with the German development bank KfW for €40.5 million as part of the SME Resilience Facility project.

The project will focus on supporting the resilience of entrepreneurs in de-occupied and war-affected areas, where the risk of lending is highest, and will include:

•   credit guarantees — reducing risks for banks and facilitating access to finance;
•   preferential loans — reducing interest rates for business development and recovery;
•   compensation for investment costs — partial coverage of costs for equipment, reconstruction and production start-up.

The project is financed by the German government through the German development bank KfW. 

These funds will become a new programme of the BDF, which will be combined with the State programme ‘Affordable Loans 5-7-9%’ to support businesses that continue to operate, create jobs and rebuild their communities despite the challenges of war.

The project will be implemented in partnership with the Ministry of Finance of Ukraine and partner banks. The project also includes a consulting component aimed at strengthening the Fund’s institutional capacity in order to transform it into a development institution, as announced by German Chancellor Friedrich Merz during his speech at URC2025, noting that the BDF should become “a model like KfW — a Marshall Plan for Ukraine, based on long-term partnership and stable financing.”