The issue of whether Polish businesses will profit from post-war reconstruction of Ukraine raised its head again recently. The picture is perhaps not as black as some have painted.
According to the World Bank, it will cost about $411 billion to rebuild Ukraine’s housing, infrastructure, and services destroyed by Russia.
During the June 2023 Ukraine Reconstruction Conference hosted in London, over 400 global companies pledged support for rebuilding the country. Similar conferences have taken place in France, Italy, Switzerland, Germany, Poland and Japan. In addition, the EU has pledged €50 billion, the UK $3 billion and the US $1.3 billion. There are also an estimated $350 billion worth of Russian assets frozen by G7 countries that could be used to fund Ukraine’s reconstruction.
Some Polish media suggest Polish entrepreneurs will not earn anything as Kyiv, despite receiving help from Poland, does not feel it owes its western neighbor anything, in particular after grain blockades on the border in 2023.
Not so?
Many Polish firms want to build new roads, bridges, as well as rebuild public and residential buildings. Some have already started implementing projects, for instance Mirbud, which builds roads, or Unibep, which is expanding the Medyka-Szegin border crossing.
The desire to engage in the reconstruction has also been expressed by architects and developers. In addition to construction companies, the water and sewerage industry is also involved in the reconstruction of the destroyed infrastructure in Ukraine. The interior finishing industry is also interested in cooperation with Poland. Some of the Polish companies are already operating in the Ukrainian market. Barlinek, Cersanit and Fakro have production facilities in Ukraine. Ternopil and Ivano-Frankivsk local authorities are alsointerested in cooperation with Polish businesses. For example, a water treatment system in Mykolaiv, where a Polish company signed a contract and supplied such systems. The participation of PSE (Poland’s grid operator) in supporting and maintaining electricity networks in Ukraine last year is also ongoing. The export of energy after the explosion of the dam in Nowa Kakhovka kept the local system in operation. In addition, Gaz-System is ready to expand its capacity to connect Ukraine with gas pipelines in order to delivergas from the Norwegian shelf to Ukraine.
The process of rebuilding Ukraine will define Polish-Ukrainian economic relations many years ahead, according to Tetiana Khuzha business development manager at the Foreign Trade Office of the Polish Investment and Trade Agency (PAIH) in Kyiv, temporarily operating from Warsaw. PAIH maintains a database of Polish companies interested in taking part in this post-war venture. It currently includes 1,700 Polish companies, of which about a third represent the construction sector. According to the Polish Economic Institute, they face enormous potential, as the value of projects to be carried out in Donbas alone will reach about $150-200 billion.
Poland set up the Council for Cooperation with Ukraine in May and Poland is preparing for the meeting of the G7 donor platform this year. Poland is also working on opening branches of the United Nations Office for Project Services (UNOPS) in Warsaw and Rzeszów, a special UN agency that deals with reconstruction issues.
Polish entrepreneurs are already making money from the opening of the Ukrainian market, Paweł Kowal, head of the Parliamentary Foreign Affairs Committee, government plenipotentiary for the reconstruction of Ukraine, told the daily Rzeczpospolita.
“Without Poland, there is no reconstruction of Ukraine,” Kowal said. “Polish entrepreneurs are already making money from the opening of the Ukrainian market, including: with the war. Moreover, today 1/3 of the entire EU’s exports to Ukraine are Polish exports.”
He added that Poland is developing cooperation between local governments in the context of reconstruction. Wrocław, Gdańsk, Rzeszów, Łódź.
“France, Germany and the USA are looking for investment opportunities, I hear this from each of my counterparts. Investors complain about the lack of good capital insurance. Polish companies can count on good insurance from the Export Credit Insurance Corporation – this was the contribution of the previous government and we will probably develop it,” said Kowal.
“Huge investments by other countries in Ukraine are a myth, although it is a fact that all large players are getting ready. After all, everyone is waiting for the end of the war! Meanwhile, Poland’s greatest strength remains its export surplus in trade with Ukraine, a large part of which goes to small exporters. Export paves the way for investments and strengthens the sense of security,” he added.
Polish-French business consultations and Polish-German local government consultations – these are some of the plans only for this year. American and Japanese partners are interested in our experience, with whom we are preparing further meetings, including the regional dimension of recovery policy. Most of the transport to Ukraine, also from France or Germany, passes through Poland – the best and fastest route.
A branch of the Polish Investment and Trade Agency was also established in Rzeszów, Kowal adds. PAIiH has announced the opening of an additional office in Lviv. “So we have come to the role of Poland, Podkarpacie and Rzeszów as a hub for the reconstruction of Ukraine, which should be ready for great support for our investors, exporters and cooperation with others,” he says.
“At the conference in Berlin, our delegation was one of the largest. There were also representatives of banks who are preparing to provide support to investors and exporters. Today, most often, the problem is not the amount of the credit line, but insurance and investment certainty,” Kowal concluded.
