BIO invests to support Ukrainian SMEs

BIO is stepping up its support for Ukraine’s private sector, based on Belgium’s commitment to help the country during and after the war. Ukraine qualifies for BIO support as a lower-middle-income country affected by conflict. Despite the war, its private sector remains active and in need of financing.

BIO has an investment mandate from its shareholder to invest in Ukraine under its 2024–2028 strategy, using flexible instruments to invest in this high-risk environment. Initial investments—like an investment in Bank Lviv and BIO’s participation in the Rebuild Ukraine Fund —show strong demand. BIO also recently committed to two additional investments in Ukraine in energy provision, to fight the important challenge in terms of access to energy in the country. In addition to these 4 projects, BIO reviewed many others, confirming the need for its involvement and its ability to identify sound opportunities. 

To scale up, in June 2026, BIO's board approved an additional €4.8 million allocation from the organization's €8.97 million profit recorded in 2025, amounting BIO’s investment mandate in Ukraine to €21.8M. In addition, thanks to the strategic deployment of guarantee programmes, BIO’s possible net exposure in Ukraine under the current mandate is even higher.  However, BIO is expected to require even further resources to fully realize its potential in Ukraine. 

Interest from Belgian companies further support this need. While BIO cannot invest directly in Belgian firms, it can support them through their Ukrainian operations, strengthening ties between both countries and maximizing impact.

A Strategic Investment Amid National Reconstruction Efforts

At the Ukraine Recovery Conference in Rome, Belgium formalised a €5 million partnership between BIO Invest and Bank Lviv — marking BIO’s first direct entry into the Ukrainian market. The financing is aimed squarely at small and medium-sized enterprises, a sector described as the backbone of Ukraine’s economic recovery, crucial for job creation and national stability.

This step is part of a larger Belgian effort at the conference, where Belgium signed or announced several strategic partnerships supporting Ukraine’s reconstruction in energy, public services, healthcare and employment.

Alignment with DFIs and MDBs

BIO’s approach in Ukraine is structured around close collaboration with European Development Finance Institutions and Multilateral Development Banks. This cooperation is central to operating effectively in a conflict-affected environment by enabling:

• shared due diligence and intelligence,

• coordinated risk assessments,

• co-financing to increase scale and reduce individual institution exposure,

• identification of high-impact private sector projects.

A key mechanism is BIO’s participation in the EBRD–G7–DFI–EDFI Ukraine Investment Platform, backed by 19 signatories. This platform facilitates information exchange, risk-sharing, and strategic coordination on private-sector reconstruction.

The EBRD—Ukraine’s largest institutional investor—acts as Lead Institution, ensuring coherence across DFI interventions. This platform is essential for BIO, increasing its effectiveness and enabling the institution to undertake investments aligned with best practices and international standards.

BIO’s Investment Strategy and Funding in Ukraine

BIO committed €21.8 M to Ukraine:

€9 M – for higher-risk, essential in a conflict setting, provided by the Belgian State as a new mandate for BIO

€12.8 M – allocated from BIO retained earnings, for investments supported by guarantees. For these investments, BIO counts ‘net exposure’, as investment, excluding the part covered by guarantee programmes as it allows to open new financing opportunities for the country 

The financing needs in Ukraine are significant, and BIO was able to identify many projects that fit its investment mandate. This confirms that BIO’s instruments are relevant and that support for the Ukrainian private sector is substantial.

REBUF, Rebuild Ukraine Fund - Signed (USD 6 M (=€ 5.23 M), January 2026)

Focus: REBUF targets small and medium‑sized enterprises (SMEs) and larger firms across different sectors who play a critical role in maintaining jobs, ensuring the supply of essential goods and services, and keeping the economy functioning despite the conflict. The fund aims to grow to USD 250 M. The investment of BIO enables REBUF to start financing companies that are adapting, scaling, and continuing operations under extraordinary pressure, reinforcing the private sector’s essential role in Ukraine’s economic resilience and long‑term recovery.

This investment is expected to benefit from a guarantee programme, reducing the net exposure for BIO.

Partners: International Finance Corporation (IFC), EBRD, Norfund, Swedfund and Dragon Capital.

Relevance to BIO SITs: SME-Finance, Job Creation (SIT‑1, SIT‑2), FCAS/LDCs (SIT‑4)

Bank Lviv - Signed (€ 3M, March 2026)

Focus: Bank Lviv is a small regional bank founded in 1991, specialising in retail and SME lending across five Western Ukrainian regions (Lviv, Ivano-Frankivsk, Ternopil, Volyn and Rivne). Its SME clients mainly operate in trade, processing industries and agriculture. The bank is supported by numerous DFIs and impact investors, providing equity, funding and portfolio guarantees.

This investment benefits from EDFI MSME Platform, a guarantee managed by EDFI Management Company and funded by the European Union under the EFSD+ programme, as part of the EU’s Global Gateway strategy. The Guarantee covers 50% of the investment resulting in a net exposure for BIO of €1.5M.

Relevance to BIO SITs: Jobs (SIT‑1), SME-Finance (SIT‑2), FCAS/LDCS (SIT‑4), Gender (SIT‑6)

NOTUS  Ovidiopol Energies LLC – to be signed at the URC 2026 in Gdansk (€ 7 M, June 2026)

Focus:  a 120 MW wind farm in the Odesa region. expected to generate approximately 332 GWh of clean electricity annually. with the planned commercial operation date set for Q4 2028. BIO commits to investing 7 M in a junior secured loan. The key relevance for BIO in potentially supporting this project relates to strengthening critical energy infrastructure, climate action, and national energy resilience.

Relevance to BIO SITs: FCAS/LDCS (SIT-4) and climate finance (SIT-7)

A Biogas energy project – Committed (€ 10 M, June 2026)

Focus: The proposed project is a biogas/biomethane facility using cattle manure (55%), corn silage (27%), and rye silage (15%). Will replace 3.6M m³ of fossil gas and produce ~50 GWh/year of low-carbon biogas. In Ukraine, where over 60% of energy capacity has been destroyed by the war, this project will complement urgent energy needs.Plans are also to replicate the model if successful.

This investment is expected to benefit from a guarantee programme, reducing the net exposure for BIO.

Relevance to BIO SITs:  FCAS/LDCS (SIT-4), gender equality (SIT-6) and climate finance (SIT-7)

*The EFSD+ EU guarantees are one of the instruments created under the framework of the Multiannual Financial Framework 2021-2027 to support under the form of grants, guarantees and other financial instruments, the policy priorities of the EU including towards developing countries, Global Gateway and the NEAR region. Pillar-assessed DFIs are cooperating through EDFI MC to access these guarantee programmes in an effective way. In parallel, some DFIs have also direct bid to these programmes (but not BIO).

BIO's CEO Joris Totté welcomed the Ukrainian Ambassador to Belgium, His Excellency Mr. Yaroslav Melnyk, 4 years after the beginning of the Russian aggression.

Way forward

BIO’s presence in Ukraine is still at an early stage, with the first full investment only completed in January 2026. These initial transactions serve as pilot investments, allowing BIO to test the market, understand operational realities, and refine its approach in a high‑risk security environment.

However, current funding allocations remain limited, meaning BIO’s exposure will stay modest despite the significant effort invested in developing a strategic approach, generating deal flow, and conducting due diligence in a complex context. The existing envelope enables learning but does not sufficiently match the scale of opportunities or needs identified in Ukraine’s private sector. This goes together with an increased interest from Belgian companies in BIO’s mandate regarding Ukraine, with several firms reaching out. This signals strong potential for deeper engagement and demonstrates the relevance of BIO as a catalyst for Belgian Ukrainian private‑sector cooperation.

To significantly expand BIO’s activity in Ukraine, additional investment resources would be required. At the same time if the Belgian Government were to unlock larger financing for Ukraine, BIO would need to determine how such an expansion fits within its overall mandate—especially in terms of maintaining its strategic geographic focus on LDCs and Africa and avoiding dilution of core priorities.