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 set aside €17 million for Ukraine under its 2024–2028 strategy, using flexible instruments to invest in this high-risk environment. Initial investments—like BIO’s participation in the Rebuild Ukraine Fund and a partnership with Bank Lviv—show strong demand. So far, BIO has reviewed over 26 projects, representing €180 million in potential investments. This growing pipeline confirms the need for BIO’s involvement and its ability to identify sound opportunities.

To scale up, BIO will need more resources. Interest from Belgian companies further supports 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 €17 million to Ukraine under the Investment Strategy 2024–2028:

1. €9 million – for higher-risk, lower-return investments essential in a conflict setting.
2. €8 million – allocated from retained earnings, for investments supported by guarantees.

The financing needs in Ukraine are significant, and BIO was able to identify many projects that would fit BIO’s investment mandate. By June ‘25, BIO had reviewed already 26+ projects, totaling €180 million—nearly ten times the available envelope. The pipeline composition has been divided amongst private equity (36%), SME finance (36%), infrastructure (18%), and financial institutions (10%). This confirms that BIO’s instruments are relevant and that support for the Ukrainian private sector is substantial.

REBUF - Rebuild Ukraine Fund (USD 6 million, 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 million. 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.

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 - Letter of Intent (EUR 5 million, July 2025)

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.

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

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.