Ukraine's EU bid to unlock investment goldmine - Dragon Capital CEO

Tomáš Fiala, CEO of Dragon Capital investment company
Tomáš Fiala, CEO of Dragon Capital investment company

Ukraine's impending accession to the European Union is set to significantly bolster private foreign investment, according to Tomáš Fiala, CEO of Dragon Capital.

Speaking at the NV event titled "Ukraine's European Way. Dialogues about the Future" on March 28, Fiala outlined the potential financial benefits that EU membership could bring to Ukraine.

"Taking a look at Poland's experience, private investments there were at $3.7 billion annually for the five years leading up to EU membership. This figure jumped to $7 billion in the year they joined, and subsequently, foreign direct investment averaged about $13 billion annually over the following five years," Fiala explained.

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He noted that Ukraine's peak private investment reached up to $10 billion annually during the privatization of Kryvorizhstal (ArcelorMittal Kryvyi Rih). However, the average investment has since leveled to between $3 and $5 billion per year.

"And these accumulated foreign direct investments in Ukraine are less than $60 billion, while Poland, for example, as of 2020, has received more than 200 billion euros ($216.1 billion) in FDI from the EU alone," Fiala added.

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The Dragon Capital CEO also emphasized the financial advantages of EU integration, stating, "Upon joining the EU, financing will become significantly more affordable. Project financing costs could be reduced to a third of the current rates due to lower interest rates." This change, Fiala suggests, will provide a substantial economic impetus for Ukraine, facilitating more extensive and affordable financing for various projects.

*Dragon Capital is the owner of NV magazine, NV.ua, and Radio NV.

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