Special Envoy for the Reconstruction of Ukraine Antti Vänskä: We focus on the needs of businesses, financing and advisory services
The CEO of EastCham Finland Jaana Rekolainen and the Special Envoy for the Reconstruction and Support of Ukraine at the Ministry for Foreign Affairs of Finland Antti Vänskä.
The reconstruction of Ukraine is already underway, and Finland is preparing carefully for it.
Text and pictures Satu Niemelä
Ukraine has an immense need for repair and reconstruction, as well as the renewal of their energy infrastructure. Antti Vänskä, Special Envoy for the Reconstruction and Support of Ukraine at the Ministry for Foreign Affairs, is responsible for coordinating the extensive investigation work and plan. The first phase of the plan, which will be implemented this year, focuses on the opening of trade, market access, advisory services and financing solutions for trade and investments.
Antti Vänskä spoke about Finland’s national reconstruction plan for Ukraine at the EastCham Finland member event on 2 November 2023. According to Vänskä, the Finnish government strongly believes that Ukraine must be supported. The reconstruction plan is based on the government programme.
– All political parties agree that Ukraine must be strongly supported. The public also shares this view. About 300 aid trucks have been sent to Ukraine. It shows that the Finnish people are thoroughly involved, says Antti Vänskä.
“The Finnish people are thoroughly involved.”
So far, Finland has supported Ukraine with about EUR 2 billion. Two thirds of this support consists of defence material. The Finnish Defence Forces have donated a variety of material and equipment from their own arsenal. According to Vänskä, the Finnish Defence Forces’ donations are of good quality and in line with Ukraine’s needs. About a third of the aid sent to Ukraine has consisted of development cooperation aid and humanitarian aid. This also includes the aid given to the more than 60,000 Ukrainians who sought refuge in Finland.
– Finland’s support has been quite extensive in relation to the country’s GDP and size, but the needs are also very extensive. The EU is currently preparing its own special support instrument, known as the Ukraine Facility. The planned support amounts to a total of approximately EUR 50 billion.
In March, the World Bank and the EU Commission prepared a reconstruction needs assessment for the coming years. The estimated amount needed for reconstruction is around EUR 400 billion.
– The amount is at least that much, although I have heard different estimates since March. Some estimates are almost double the amount. The amount increases as Russia continues to do damage.
The needs of Finnish companies highlighted
In July 2023, the Minister for Foreign Trade and Development, Ville Tavio, issued a mandate for Finland’s national reconstruction plan for Ukraine. It will be implemented in two phases. The first phase will take place this year, and the second one next year.
The first phase focuses on the needs of Finnish businesses in particular. The needs of Finnish businesses are considered with the future Ukrainian markets in mind.
According to Vänskä, the Ministry for Foreign Affairs’ Eastern Department has been in charge of the planning. At the same time, the Ministry for Foreign Affairs has met with various business organisations and operators.
– EastCham has been very helpful and knowledgeable, and the cooperation has been beneficial. In addition to EastCham and the Ministry for Foreign Affairs, the cooperation includes, for example, Business Finland, Finnvera, Finnfund, the Ministry of Economic Affairs and Employment of Finland, the Confederation of Finnish Industries, the Finland Chamber of Commerce and the East Office of Finnish Industries.
“EastCham has been very helpful and knowledgeable, and the cooperation has been beneficial.”
Companies have also shared their experiences and views and have provided suggestions. The ten-page plan for the first phase is close to being completed.
The first section of the plan deals with financial issues and advisory services for businesses. Financial issues are extremely important when talking about high risks and a country at war.
Ukraine is a huge market, and its needs in the coming years are measured in hundreds of billions of euros. At the same time, in a commercial sense, the market is relatively foreign to Finland.
– Some Finnish businesses have operated there, but not on a large scale. We have a lot to learn about the market and business culture. Few people speak Ukrainian in Finland, which is something we could improve in the future, says Vänskä.
The Ministry for Foreign Affairs has considered financial issues together with Finnvera, Finnfund and the Ministry of Economic Affairs and Employment. It has been considered how the state could bear part of the risk when operating in a market like Ukraine. Funding for trade and investments has been analysed, and development possibilities have been thought through.
The financing of trade and investments involves the private and public sectors. Companies have asked the Ministry for Foreign Affairs, among other things, whether they have taken into account what Denmark, Sweden, Norway, Poland and Germany are doing.
– I understand the concern that we are late and should move forward faster. Denmark already has instruments in place for applying for financial support. Sweden is roughly in the same place as us. I think it’s good that we have people who drive the matter forward and that these issues are constantly being thought about and studied.
After the Extraordinary General Meeting the representatives of companies relaxed with some glögi drink.
Investments in advisory services
In addition to financing, the first phase of the plan also focuses on advisory services. Since most Finnish businesses are not very familiar with the Ukrainian market, people have plenty of questions and are in need of information. The Ministry for Foreign Affairs and its various cooperation organisations can provide experience-based information and answers. Businesses feel that information is scattered. Nobody really knows who to contact or where to start looking. The Ministry for Foreign Affairs has prepared an information package for companies that includes a list of important organisations, their responsibilities, people and contact information.
– I know there has also been a lot of talk about the one-stop shop principle. It has been requested. Personally, I don’t think it would fit the situation, but our information package should answer this need.
Most of the finances for the reconstruction go to competitive tendering in international financial institutions. According to Vänskä, Finnish companies have not found a great deal of success in competitive tendering, which is partly due to the fact that they are complex, slow and difficult processes. He also feels that companies have a great need for sparring and advisory services.
– In the first phase of the plan, we also draw attention to the fact that the various organisations should have sufficient resources. At least in a few places, the resources are scarce.
Ukraine’s support is needs-oriented and justified
The second phase of the plan focuses on mapping out the role of the entire Finnish state administration and various stakeholders in the reconstruction process. For example, many ministries and non-governmental organisations have good connections to Ukraine. In the second phase, the use of Finland’s development cooperation funds will be considered in particular.
– Ukraine is the largest recipient of Finnish development cooperation aid. The annual budget is around EUR 60 million, of which 20 million consists of humanitarian aid and the remaining 40 million consists of development cooperation aid. The meaningful distribution of this money is vital.
“Ukraine is the largest recipient of Finnish development cooperation aid.”
A significant part of the aid is directed towards international financial institutions, such as the World Bank and the European Bank for Reconstruction and Development (EBRD). They have their own programmes for which Finland grants funding.
– Minister Tavio has given a clear message that commercial Finnish interest must also be taken into account. The starting point is that Finland’s activities should always benefit Ukraine. Everything has to be needs-oriented and well justified. Part of the funding will go to NGOs.
Finland’s development cooperation has centred around the rule of law development, education, energy security and the environment. This will likely be the case also in the future, but according to Vänskä, the cooperation can also include other sectors.
Part of the reconstruction is participation in various events. Dozens of Finnish companies, along with a large Finnish delegation led by Minister for Foreign Trade and Development Ville Tavio, are leaving for the ReBuild Ukraine trade fair in Warsaw in mid-November. The purpose of the trip is to learn more about Ukraine’s needs, to network and showcase Finland’s strong expertise.
EastCham will establish an office in Ukraine
The Extraordinary General Meeting of EastCham Finland held before Antti Vänskä’s presentation decided that the Chamber of Commerce will establish an office in Ukraine. The General Meeting authorised the Board of the Chamber of Commerce to proceed in accordance with the decision.
According to EastCham Finland’s CEO Jaana Rekolainen, establishing a presence in Ukraine is an important and necessary step in line with the strategy of the Chamber of Commerce.
– We hope that Ukraine will become an important market for Finnish companies in the long term. We want to support Finnish companies in establishing a foothold in the Ukrainian market. As a Team Finland operator, we are a networking platform especially between Finnish and Ukrainian companies. We create a support network and share information about the business environment. The creation of important partnerships in Ukraine has already started.
According to Rekolainen, EastCham works with companies at the grass-root level. Companies should consider in their Ukraine strategy how they want to expand their operations to Ukraine, what they are willing to invest and what risks they are willing to take.
– Our most important task is to share information through open webinars, training, member events and our news service. We will be present in Ukraine and offer practical help, especially when companies seek contact with Ukrainian companies, says Rekolainen.