On August 9, at UKRINFORM the Association of Sustainable Development Experts (ASDE) presented a study on the state and needs of small and medium-sized businesses in Ukraine in wartime conditions.
The speakers were:
- Alina Sokolenko – head of the Association of Sustainable Development Experts of Ukraine;
- Victoria Kovalenko – state expert on smart specialization and resource efficiency of the Directorate of Price Policy and Development of the Real Sector of the Economy of the Ministry of Economy of Ukraine;
- Vyacheslav Bykovets – general director of the Union of the Entrepreneurs of Small, Middle-Sized and Privatized Enterprises of Ukraine;
- Oleksandr Yurchak – general director of the Association of Industrial Automation of Ukraine;
- Serhiy Porovskyy – expert on financing and energy efficiency policy of the UNIDO/GEF UKR IEE Project;
- Rodion Morozov – Deputy Chairman of the Board of JSC “Ukrgasbank”;
- Ivan Koryakin – expert in the field of strategy and finance of the Association of Sustainable Development Experts.
From April to June 2022, the Association of Sustainable Development Experts conducted a survey of 550 respondents of small and medium-sized businesses and sought answers to the questions: What is happening? How did the war affect business? What are the business needs?
“We faced a reality for which no one was prepared. That is why we and our partners started to analyze this environment in order to restore it and start working on the principles of sustainability. In addition, we must understand that the issues unrelated to the war have not gone anywhere, as well as Ukraine’s obligations to the world regarding them. Business plays a large part in the implementation of those obligations, that is why the Association aims to help business in this,” said the Head of ASDE Alina Sokolenko.
More than 500 business representatives were surveyed. Almost 90% of respondents indicated that they needed financial support, the rest noted the need for consultations and expert opinion.
ASDE strategy and finance expert Ivan Koriakin emphasized: “The first priority for business is financing, the second priority is recovery, and the third priority is relocation. The latter did not appear in all enterprises, that is why most requests are for financing. After all, there was a loss of business activity. As for the amounts, the majority did not indicate specific amounts, but 50 respondents indicated an amount from 50 thousand to one million euros.”
Oleksandr Yurchak, general director of the Association of Industrial Automation Enterprises of Ukraine, shared how interaction with the business is currently taking place in the context of financial support: “At this time, we are focusing business on grant support because most donors provide extended support. There are a lot of opportunities in different industries. However, the question arises about the readiness of our business for this. And that is why our joint interaction plays an important role in this direction”.
Serhiy Porovskyy, Energy Efficiency Financing and Policy Expert for the UNIDO/GEF UKR IEE Project noted: “In these difficult times, we are in a critical survival stage in the context of the economy and military operations. We must be prepared for the worst-case scenario, which is why state support is vital, and vice versa. Our project has been working in Ukraine for a long time, we have a wide range of offers for entrepreneurs. According to our data, 70% of enterprises have felt the impact, of which 25% have stopped their activities, 33% are moving their business to the territory controlled by Ukraine, 12% outside Ukraine; the remaining 30% are working, of which 10% are in a state of shock and do not know what to do.
The second main thesis is that it is impossible to cover all business development needs with grants alone. The most important indicator of economic development is an investment. It is necessary to create all conditions for attracting investments, in particular, foreign ones: to create comfortable and transparent conditions for investors, to introduce guarantee instruments. UNIDO together with UKRGAZBANK have already introduced such a mechanism for energy efficiency measures for industrial enterprises in Ukraine – the Loan Guarantee Fund.
Why businesses should invest in energy efficiency shouldn’t raise questions – firstly, it’s simply very profitable. This is a permanent reduction in operating costs. This is a reduction in the consumption of energy resources. This is an opportunity to create a competitive product in local and foreign markets. And the UNIDO/GEF UKR IEE project continues to support industrial enterprises in Ukraine on this path.”
Changes in the work of banks have already taken place during the war. Bank financing continues thanks to the 5-7-9 program, it provides for business relocation, support where demand has increased, and support for small and medium-sized businesses in the context of export and import.
Rodion Morozov the Deputy Chairman of the Board of JSC “Ukrgasbank” outlined how the bank works and interacts with business: “The grant is a one-time aid, but it should be considered with bank financing. In terms of business readiness, our joint task is to teach businesses how to attract sustainable financing. Our bank has been working on this for a long time and will continue to work in cooperation with international and national stakeholders. At the same time, we must rely on new international standards, which will play a key role in the restoration of the country.”
To preserve the operation of businesses in Ukraine, especially small and medium-sized ones, ASDE launched the project “Sustainability Recovery Facility“, the purpose of which is to provide Ukrainian businesses with consultations with the aim of rapid recovery based on the principles of sustainability after losses during active hostilities. The project also includes conducting research on the current needs of business in Ukraine.