Istanbul, December 20 — The UN Development Programme’s (UNDP) Istanbul International Center for Private Sector in Development (IICPSD), in collaboration with UNDP Ukraine Country Office, has published the “Impact Investing Ecosystem in Ukraine” to take stock of the current impact investment landscape in the market. The report provides a detailed mapping of the nascent but promising impact investing ecosystem in Ukraine, identifying high potential areas to attract impact capital towards the country.
Referring to investments made with the intention to generate positive, measurable social and environmental impact alongside financial return, impact investing presents an effective modality for public and private sector to channel much-needed funds towards development needs. However, one of the main challenges against streamlining impact investing is the lack of awareness and the absence of bankable impact projects and suitable exit options. These limitations are exacerbated in developing countries where there is a wider gap in knowledge around impact investing and consequently, higher perceived risks.
“The Impact Investing Ecosystem in Ukraine” study is a flagship methodology prepared by UNDP IICPSD to address this gap in impact knowledge. Building on an extensive desk-research process and in-depth stakeholder interviews, the methodology showcases opportunities in target markets for investors, identifies areas with a high potential for growth and provides policy recommendations to foster an impact-investing ecosystem. The Impact Investing Ecosystem Study for Ukraine identifies (i) Technology with a focus on the IT industry and digital economy, (ii) Infrastructure, (iii) Renewable energy, (iv) Healthcare, (v) Education and (vi) Agriculture as high potential areas where additional impact capital can generate the highest development impact.
Ukraine already hosts a relatively developed entrepreneurship ecosystem, which could foster a business environment conducive to stimulate impact investors. However, significant challenges exist in attracting especially private capital such as lack of awareness around impact investing due to limited track record, regulatory bottlenecks, inefficiencies in infrastructure, problems around financial literacy, market volatility, high country risk-perception and subdued demand among the population due to income disparities. The report recommends ameliorative measures such as building an actionable pipeline and raising awareness around impact investing with active government involvement and accountability, restoring obsolete infrastructure, mobilizing on Ukraine’s competitive advantages such as its highly educated workforce, increased digitalization efforts and enhancing transparency and law enforcement capacity to restore investor confidence and nurture a functioning ecosystem to foster impact transactions.
The report was launched at the 4th National SME Development Forum on 26 October during a panel discussion on SDG Entrepreneurship and Impact Investing in Ukraine, moderated by IICPSD Impact Investing Portfolio Lead Funda Suzer. Throughout the panel, Melis Aslan (Research Analyst at UNDP IICPSD) presented the findings of the report, while Cem Baytok (Managing Partner at Idacapital) and Umut Gokcen Yilmaz (Founder of Agrio Finans) shared their insights and experience on the inherent strengths of the Ukrainian market for impact investing and the necessary steps to be taken to promote a strong impact investing ecosystem in Ukraine.
Interested stakeholders can access the full report on “The Impact Investing Ecosystem in Ukraine” here.