This bank already has an idea. The debt would become a fuel for the reconstruction of Ukraine
One of the ideas is the Citigroup project, which as the only large bank from Wall Street remained in Ukraine after the outbreak of war. The institution is working on the concept of the so -called Debt-For-Reconstruction SWAP, or debt exchange for funds intended for reconstruction.
In practice, the point of the NPC Ukrenergo Energy Network Operator can refinance part of your debt on more favorable conditions, and spend savings from this process to rebuild energy infrastructure, regularly destroyed as a result of Russian attacks.
Although the idea appeared at the end of last year, Investors' interest remains mixed. This is due to both the uncertain geopolitical situation and difficulties in assessing the risk associated with long -term projects in a country still plunged into the war.
Citi does not give up the idea
Still, Citi is not going to give up. The bank estimated that the transaction could amount to $ 750 to $ 1 billion. It would be the first such instrument on the market, connecting the traditional debt structure with the purpose of rebuilding the state after the war.
In this way, Citigroup wants to create a precedent and consolidate its position on the future financing market of Ukraine. Until now, similar mechanisms have been used primarily in the context of environmental protection, allowing countries to allocate saved funds for ecological purposes. Now The bank proposes that a similar construction serves energy security, the reconstruction of the economy and ensuring the stability of the state.
Citigroup activities are part of a wider trend of restructuring of Ukrainian debt. In recent years, Kiev has already renegotiated bonds worth over $ 20 billion, and individual state -owned companies, including Ukrenergo and Kolej, are conducting talks with creditors about the reorganization of their obligations. The goal is to release financial resources that can be allocated to fight aggression and secure the basic functions of the state.
The involvement of the American agency DFC (US International Development Finance Corporation) further increases the chances of success of such undertakings. This institution, used by the United States as a tool to implement economic and political interests, can offer investors insurance political risk. Thanks to this, private capital would be easier to engage in high uncertainty projects.
Although the war is still going on today, and the conditions for reconstruction are extremely difficult, banks do not hide that they see a huge future chance in Ukraine. The reconstruction of the country will be one of the largest financial projects of the 21st centuryand those who first find solutions connecting Kiev's needs with the expectations of global investors can play a strategic role in it. In this sense, the Citigroup initiative shows that the world of finance thinks not only about the current crisis, but about the moment when Ukraine begins to put the foundations for its future.
