Andrii Hapon, Chairperson of the Management Board of the BDF commented to Ekonomichna Pravda on the creation of the National Development Institution

The draft law “On the National Development Institution” has passed the Committee on Finance, Tax, and Customs Policy of the Verkhovna Rada for its second reading, with a number of amendments introduced.

According to the document, the National Development Institution will be responsible for the design, implementation (that is, support and administration), and performance analysis of development or support programs and projects for business entities and other beneficiaries receiving assistance from the Institution.

The draft law also provides for attracting private investors’ funds and channeling them toward economic recovery through various financial instruments.

“It is important to emphasize that the draft law envisages the creation of a financial institution with a special status. However, it is a financial institution, not a bank with corresponding instruments — even though it has already been dubbed a ‘bank of banks’,” noted Andrii Hapon in his comment to Ekonomichna Pravda.

“The main objective is to eliminate bureaucratic barriers and enable the institution to cooperate directly with EU funds. This will allow us to participate in EU tenders that provide grants — meaning systematic cooperation at the international level,”he explained.

“This institution will be quite similar to Germany’s KfW (Kreditanstalt für Wiederaufbau), which was established in 1948 under the Marshall Plan and proved to be highly effective,” he added.

“Before the draft law was put forward for the second reading, Deloitte conducted a detailed analysis of this experience and provided its assessment for the establishment of a similar institution in Ukraine. It was also necessary to clearly define how the National Bank of Ukraine would regulate the new institution’s activities and how oversight would be exercised,” Mr. Hapon stated.

“The National Development Institution will not work directly with entrepreneurs. It will primarily cooperate with banks. This is how we operate now: we determine the categories eligible for concessional loans, define conditions, and attract international financing. The government, in turn, adopts the relevant resolutions. But the final decision on who receives the loan rests with the bank,” he said in his comment to Ekonomichna Pravda.

“International financing creates a ‘safety cushion’ for banks, as they face high risks — particularly when small businesses struggle to provide collateral. The goal of the draft law is to create favorable conditions precisely for such businesses, especially in frontline regions, which lack the same opportunities as larger enterprises,” emphasized the Chairperson of the Business Development Fund.

Mr. Hapon also reminded that in June 2024, the governments of Ukraine and Germany announced the launch of the ‘Vision: BDF 2.0’ initiative and signed the relevant implementation documents. This initiative is part of a broader assistance package aimed at developing a modern and sustainable infrastructure to support small and medium-sized enterprises (SMEs) in Ukraine.

The initiative aims to transform the Business Development Fund into a sustainable, reliable, and independent institution capable of attracting and implementing international and governmental projects that enhance SME access to finance in line with global best practices and standards.

The German Federal Ministry for Economic Cooperation and Development (BMZ), through KfW, has allocated a grant of EUR 1 million to finance the comprehensive reform of the Business Development Fund with the engagement of the consulting company Deloitte.