The European Investment Bank has agreed to finance its first project under the EU for Ukraine Fund, which focuses on strengthening small and medium-sized enterprises in Ukraine and Moldova. A €25m investment was on Monday 4 December, in Ukraine’s equity growth fund, Horizon Capital Growth Fund IV, managed by Horizon Capital, a private equity manager in the region. This investment is targeted at asset-light, human capital-rich, export-oriented technology companies, leveraging the area’s extensive engineering talent, according to the EIB’s press statement.

The EU for Ukraine Fund, which has garnered over €400m in commitments from EU member states, aims to rapidly address Ukraine’s urgent needs and maintain economic stability. The fund’s initial project was approved during its inaugural contributors’ committee meeting, where EIB vice president Teresa Czerwińska, responsible for operations in Ukraine, emphasised the EIB’s commitment to supporting SMEs and the private sector in Ukraine.

HCGF IV, currently raising at least €274m, aims to make growth equity investments in tech and export-oriented SMEs in Ukraine and Moldova. Supported by institutional investors like the EIB, HCGF IV’s objective is to bolster the market presence of businesses in these countries, particularly in sectors such as IT, e-commerce, innovative retail, consumer goods and fintech.

The EU for Ukraine Fund, by the EIB in spring 2023, is a key component of the broader EU for Ukraine initiative. Initially backed by 18 EU member states--including Luxembourg, which €1.3m--the fund seeks to support public and private projects, especially in municipal infrastructure and financing for Ukrainian entrepreneurs.