70% of Ukrainian companies planning investments despite war: top sectors and challenges

Why the investment climate has changed

The National Bank notes that in the third quarter of 2024, investments contributed positively to economic growth of 2.1%. In October, the index of business activity expectations improved to 49.4 points from 48.7 in September. This is especially true for sentiment in the services sector.

Although the investment climate has improved somewhat, this is not the reason. The number of business executives who consider the Ukrainian investment climate unfavorable is 79%, while last year it was 84%, according to the EBA.

The reason for the planned round of investments in Ukraine is the need to purchase equipment, carry out deferred repairs, and invest in electricity solutions. All this was waiting for its time.

"First of all, of course, companies that are already present on the Ukrainian market invest," explains Anna Derevyanko, EBA Executive Director, "Indeed, many invest in maintaining their business, operational activity, and team. Part of the investment is to rebuild what has been destroyed, to restore assets."

"Companies also report investing in backup power, new and alternative energy sources, which is especially important in the run-up to the winter season," she adds. "As well as strengthening cybersecurity and investing in their own infrastructure.”

In addition to the above, companies are expanding production lines, investing in increasing export capacity, and investing in real estate and land. The most active investment sectors are mechanical engineering, pharmaceuticals, agriculture, energy, construction, and logistics.

If the current round of predominantly Ukrainian investments is successful, foreign investments will likely join them in the future as soon as the security situation in the country allows.

"Ukraine is capable of strengthening European strategic autonomy in many important areas," says Yulia Svyrydenko, Deputy Prime Minister for Economy. "We can become a new production site for the EU, an energy hub, a reliable supplier of critical materials, and an important element of value chains in new technologies.”

What does investment in Ukraine look like today?

The Ministry of Economy, which has just presented Ukrainian investment opportunities in Poland, recommends that investors pay attention to such sectors as mining, energy, metallurgy, and defense.

Even the Victory Plan announced by the president contains a clause on the importance of foreign investment in the critical materials industry.

"The EU is experiencing a shortage of critical materials that are important in high-tech industries. Instead, Ukraine has large reserves of titanium, uranium, lithium, graphite, and other minerals," the Ministry of Economy notes. "Investment projects in these areas in Ukraine would help reduce the EU's geopolitical dependence. Moreover, our priority is not just the extraction of raw materials, but their processing and further participation in European value chains."

As for the defense industry, Ukraine is waiting for three new major European investors to come to Ukraine to establish joint ventures with Ukrainian partners, announced Deputy Prime Minister for Economy Svyrydenko.

However, Ukraine's investment potential is definitely not limited to these industries.

"I believe that space technology, robotics, and IT are industries that are important not only for the future of humanity but also necessary to position us as a country in this highly competitive world," said Mykhaylo Vidyakin, a business consultant and lecturer at the Kyiv School of Economics.

"Unfortunately, we have lost a lot of knowledge and time, and now we have a lot to catch up and learn, but it's never too late," the expert adds. "Moreover, in the field of IT and digitalization, we, Ukrainians, already have great achievements, successful projects, and human capital.”

In fact, investors have already recognized Ukraine's digitalization potential, which explains the recent purchase of mobile operator Lifecell and Internet provider Datagroup-Volia by French billionaire Xavier Niel. He did this through his NJJ holding, planning to invest $1.5 billion in Ukraine. 

A new round of investment activity is expected from companies already operating in Ukraine. In 2025, 16% of them are planning large-scale investment projects with an average check of $9 million, according to the EBA.

hromadske contacted several of these companies to share their investment plans.

For example, one of the largest investors in Ukraine, the Danish brewing company Carlsberg, has increased its investment level since the beginning of the full-scale war, investing 2.5 billion hryvnias ($60.5 million). Over the next three years, the company plans to invest up to 1.5 billion hryvnias ($36.3 million) a year in business development in Ukraine, including breweries in Kyiv, Zaporizhzhia, and Lviv.

"Ukraine is an attractive market, and one of the top priorities for Carlsberg Group," the company told hromadske. "This is due to several factors: the country's good potential, highly qualified and result-oriented specialists, high-quality service, competitive cost structure, and proximity to regional markets.”

Among the largest investment projects of Carlsberg Ukraine are enhanced security measures at the Zaporizhzhia brewery, construction of an additional shelter at the Kyiv brewery, opening of a mini-brewery on the premises of the Lvivarnya museum and cultural complex in Lviv, and an innovative canning line at the Kyiv brewery that increases the production capacity of canned beverages by 80%.

The company also invests in people.

"In 2022, the company began renovating its office and production facilities. Every year, we raise salaries for all employees several times on an ad hoc basis, keep salaries for those mobilized, and create new jobs," says Carlsberg Ukraine.

The defense industry, in turn, will receive an additional 55 billion hryvnias ($1.3 billion) from the 2025 state budget to develop production and introduce new technologies. Another 500 million hryvnias ($12.1 million) has been allocated to provide affordable loans to defense companies. This could be a major incentive for the industry, which Ukrainian companies are counting on.

One of the largest private arms manufacturers, Ukrainian Armor, has ambitious plans.

"Next year will be the year of ammunition. We plan to develop this area, expand and increase production," the company says. "We also plan to launch production of new calibers for us.”

In addition to ammunition, Ukrainian Armor would like to further develop its own line of armored vehicles, with the ability to integrate electronic warfare equipment into them.

The company has not overlooked drones either. In September, it presented the Protector remote-controlled ground robot at an exhibition in Poland.

"In today's warfare, the development of various drones is promising and very important because it saves the lives of the military," the company's press service explains. "So we plan to continue working in this direction.”

Another item on Ukraine's list of investment opportunities is critical minerals. In October, the Cabinet of Ministers approved the sale of the United Mining and Chemical Company to the Neqsol group, which owns the mobile operator Vodafone Ukraine, for 4 billion hryvnias ($96.9 million).

UMCC is a major player in the titanium ore market, which it mines and enriches at plants in Zhytomyr and Dnipropetrovsk oblasts. These substances are needed to produce industrial paints and dyes, particularly white ones. This color is by far the most popular in industry, from car manufacturing to household appliances.

"Despite the difficult situation, investment opportunities in Ukraine remain. In my opinion, only those investors who understand the Ukrainian market, have relevant wartime management experience and are additionally present in international markets and have well-developed business partnerships there will be able to successfully realize Ukraine's investment potential," says Volodymyr Lavrenchuk, Regional Director of Neqsol Holding Ukraine.

What to work on to increase investments

Undoubtedly, further investment activity in Ukraine largely depends on the security situation – the situation at the front, the intensity of aerial attacks on cities and towns, the effectiveness of air defense systems, possible peace agreements and political decisions related to these agreements.

"I think that a lot of things will be put on hold now in anticipation of the agreement announced by the newly elected US President Donald Trump," says Mykhailo Demkiv, financial analyst at ICU Group. "At least we will see an attempt to achieve peace. In my opinion, serious investments in Ukraine will depend on the design of this peace. Only when our country has clear security guarantees against a repeat attack can we talk about investment activity."

"Without this condition, we can count on the status quo, when the main money comes from foreign countries, and private investment comes mainly from local companies that are focused on our market," the analyst adds.

His words are confirmed by events in the financial markets. Amid Trump's statements about his plans to end the war in Ukraine, Ukrainian dollar bonds gained as much as 12% over the course of the month.

"The bulk of the new investment in Ukrainian bonds is based on expectations of an end to the war, or at least the possibility that Trump will pressure the parties to start negotiations," said Thys Louw, manager of Ninety One, a company that buys Ukrainian securities.

In addition to security, there are other issues, including financing for investment in Ukraine and its business capabilities. On the one hand, the American international development corporation DFC has agreed with private companies to launch a war risk insurance mechanism, which was announced on November 13 at a conference in Poland.

But on the other hand, Ukrainian funds and banks should be more willing to invest in Ukraine, as they are well aware of the situation in the country. According to Pivdennyi Bank's analytics, in 2023, the volume of domestic investment in Ukraine amounted to more than 390 billion hryvnias ($9.4 billion), but 72% of these funds were invested by entrepreneurs themselves, while bank loans accounted for only 3%.

This situation is changing. As of September, the Ukrainian banking system demonstrated an 8% increase in loans to companies, and this figure should reach 12-13% for the whole of 2024, which means an additional 70 billion hryvnias ($1.7 billion) of domestic investment.

However, business consultant Mykhaylo Vidyakin recalls that investment capital can be obtained not only from banks.

"Any source of resources has limitations, so you should consider different opportunities to raise capital: from private domestic to international institutional investors," he says. "Certain companies offer professional services in raising funds, so you can also consult with such market participants.”

At the same time, the European Business Association says there are a number of other problems that hinder investment in Ukraine.

"Among the needs are a moratorium on inspections and further easing of foreign currency restrictions, open communication with the authorities," says Anna Derevyanko, EBA Executive Director. "According to businesses, companies need the most help now in improving the conditions for reserving employees from mobilization and covering military risks.”

"Investors expect to have permanent staff, so we need transparent mechanisms for booking employees, we need cost-effective reservation," adds economist Volodymyr Dubrovskyi.

He also stresses the need for judicial and law enforcement reform, "so that they get rid of corrupt personnel, so that they are a partner for businesses, and not perceived as a cash cow on a short leash."

According to Advanter Group's research, businesses are most affected by unpredictable developments due to the war, unexpected actions of the state that can worsen business conditions at any time, and a lack of qualified personnel.