Seyar Kurshutov on why International Capital Still Fears Ukraine — and What Will Make Investors Reconsider

 

Ukraine needs nearly $588 billion for reconstruction — three times its entire annual GDP. At the same time, investor confidence has only recently begun returning to pre-war levels. The gap between the scale of this opportunity and the strength of the fear surrounding it is the central question of the coming decade.

I have worked in international trade and investment for many years, and over that time I’ve grown used to a simple rule: money isn’t afraid of risk — it’s afraid of uncertainty. Risk can be calculated, insured, and priced in. Uncertainty cannot be calculated, so capital flees from it. That is precisely why conversations about investing in Ukraine so often hit a dead end: we talk about patriotism and reconstruction, while the investor is mentally trying to count what cannot be counted.

So let’s be honest and name exactly what international capital is afraid of. Without that, any conversation about “investment attractiveness” turns into a marketing brochure that no one believes.

Two Reasons for Fear, Not One

The first reason is obvious: the war. Security risk ranks first in every investor survey, and that needs no proof. As long as missiles are striking the energy grid and a front line exists, some capital simply won’t come in — under any conditions. That is a given we work with.

But there is a second reason, one discussed far less, even though business itself places it almost on a par with the war. It is domestic institutions: corruption and weak courts. The Executive Director of the European Business Association, Anna Derevianko, put it aptly: corruption and an imperfect justice system remain just as critical as external aggression. And this was said not by a Western skeptic, but by an organization that works with investors inside the country every day.

The numbers confirm it. According to the Corruption Perceptions Index by Transparency International for 2025, Ukraine scores 36 out of 100 and ranks 104th out of 182 countries — one point better than the previous year. For an investor accustomed to European scores of 50–60, that figure means one thing: the rules of the game here are not guaranteed.

On top of this comes macroeconomic strain that an honest analyst has no right to gloss over. As of early 2026, Ukraine’s public debt exceeded 100% of GDP — roughly $213 billion. The consolidated budget deficit for 2025 reached nearly 19% of GDP. The foreign-trade deficit grew over the year to about $57 billion. The National Bank estimates real GDP growth for 2025 at only around 1.3%, and the forecast for 2026 is roughly the same. The economy is holding on, but it balances on the edge because of strikes on the energy grid and labor shortages.

The investor fears more than just bombs. He fears that even in a peaceful scenario his property rights and contracts won’t be reliably protected.

Why This Fear Is Partly Outdated

And now the other side, which is easy to miss amid the anxiety. Much of what capital fears describes the Ukraine of yesterday, not today.

This is seen most clearly in that same European Business Association study. The composite Investment Attractiveness Index for 2025 rose to 2.70 out of 5, up from 2.49 a year earlier, effectively returning to the level of the second half of 2021 — the mark recorded on the eve of the full-scale invasion. This is not yet a “positive zone” (the Index has never risen above 4 points since 2008), but the direction of movement is upward.

While some are still counting risks, others are already building. Switzerland’s Nestlé has opened a new factory in Volyn — an investment of about 40 million Swiss francs, the company’s fourth plant in Ukraine, and up to 1,500 jobs, while the output of Nestlé in Ukraine grew by roughly 10% in 2025. Germany’s Bayer invested about 60 million euros in expanding a seed plant near Kyiv, together with building bomb shelters for employees right on site. Ireland’s Kingspan announced a project worth over 280 million euros, Unilever opened a factory worth 20 million euros.

Behind this lies the logic of the early investor. The greatest opportunities in an economy open up not when everything is already safe and obvious, but precisely when most are still afraid. In the RDNA report of February 2026, the World Bank, the EU, and the UN estimated Ukraine’s reconstruction needs at nearly $588 billion. This is Europe’s largest greenfield in several generations: energy, housing, transport, processing, and agriculture. Whoever grasps this before others will secure both the best assets and the best terms.

What Actually Changes an Investor’s Decision

Appeals to “believe in Ukraine” don’t work. Something else does: reducing uncertainty to a level that capital knows how to calculate. And on this front, more has happened in recent years than it appears from the outside. I would single out three mechanisms.

The first mechanism is war-risk insurance. It is crucial, because investors name the absence of insurance as the main deal-breaker. Today a multi-tiered system has taken shape. The World Bank’s agency MIGA has issued guarantees for Ukrainian projects worth over $448 million since the start of the invasion. America’s DFC has deployed over $800 million in Ukraine, of which more than $500 million goes specifically to political-risk insurance. Export-credit agencies of other countries are joining in too, such as Poland’s KUKE. A private market has emerged as well: in early 2026, Ukraine’s Kniazha (the Vienna Insurance Group), with support from DFC concluded a reinsurance deal that made it possible to cover war risks of up to $100 million. This is a fundamental shift, since just three years ago private coverage of war risks did not exist at all.

The second mechanism is a large-scale public financial “backstop” that holds the entire economy together. Back in 2024, the European Union launched the Ukraine Facility, worth 50 billion euros for 2024–2027. In December 2025, EU leaders agreed on an additional interest-free loan of 90 billion euros to cover military and budgetary needs for the next two years. Separately, there is the ERA mechanism, worth $50 billion from the G7 countries, serviced out of the proceeds from frozen Russian assets — of which roughly $300 billion has been frozen. Behind this stands a principle that is gradually becoming reality: “Russia will pay.” For an investor, this means that the state whose economy he enters won’t be left alone to face the deficit.

The third mechanism is the hardest, because it is something only Ukraine itself can do. No insurance can replace an independent court and predictable rules. That is exactly why Ukraine’s path toward EU membership is not a geopolitical slogan but an investment instrument: it forcibly pulls Ukrainian legislation up to European standards, particularly on investment protection, competition, and the rule of law.

The Gap Between Fear and Reality Is the Opportunity

If we put it all together, the picture looks like this. International capital’s fear of Ukraine rests on two pillars: the war, which we don’t control, and the weakness of institutions, which we control entirely. The first will pass in time. The second remains our homework — and it is precisely this that determines how expensive money will be for Ukraine after the war.

But the main point is different. What capital fears increasingly describes the Ukraine of yesterday, not today. War-risk insurance has gone from zero to a functioning system, the volume of public funds devoted to stabilization is unprecedented, and international companies are already building factories here. This gap between how Ukraine is assessed and what it actually is creates the opportunity: the winner will be whoever prices risk more accurately than the market as a whole.

Ukraine doesn’t need investment out of pity. It needs risk to finally be priced correctly: it can already be hedged, and the market itself is one of the largest opening up in Europe in the coming decade. An investor who waits for full certainty will come in only once the best assets have already been taken and the bulk of the returns locked in by others. The window to enter opens not when risk disappears, but when it becomes possible to price and insure it. That is exactly the stage Ukraine is going through right now.