Business news from Ukraine

Ukrainian transport companies may receive compensation amounting to 10–15% of their investments in the modernization of vehicles and equipment to meet European Union standards, according to Gabriel Blanc, head of the working group on Ukraine’s reconstruction at the European Commission’s Directorate-General for Enlargement and Eastern Neighborhood.

According to “Interfax-Ukraine”, this mechanism applies to companies that take out loans from Ukrainian banks and invest in technologies that meet EU standards.

“We have what is known as a cashback mechanism: if a company takes out a loan from a Ukrainian bank and invests in technologies that meet EU standards, we can offer a refund of 10–15% of the investment amount,” Blanc noted during the event “Regional Business Dialogues on European Integration: The Transportation Sector” in Lviv.

According to him, Ukraine has currently fully implemented less than 10% of EU transport rules and standards, and has partially implemented less than half. Key tasks include harmonizing social and market regulations in the road transport sector, strengthening enforcement of compliance, and developing inspection and investigation bodies for rail and water transport.

Among the investments that Ukrainian carriers may need to make in order to operate according to European standards, Blanc cited the installation of second-generation smart tachographs, the purchase of Euro 6-compliant vehicles, and compliance with driver working time requirements. He noted that for small and medium-sized enterprises, such costs can be substantial, especially during wartime.

At the same time, the European Commission views this modernization as an investment in Ukrainian businesses’ future access to the EU transport market and their long-term competitiveness.

Support for transportation companies can be provided both directly to large Ukrainian enterprises and through banks. Currently, the ten largest Ukrainian banks are utilizing risk-sharing mechanisms, which helps reduce credit risks, particularly for small businesses, enterprises in frontline regions, and relocated companies.

The total portfolio under the risk-sharing mechanism already exceeds EUR 6 billion. The EU plans to further scale up financing programs for Ukrainian companies that are investing in bringing their operations into compliance with European standards.