The European Bank for Reconstruction and Development (EBRD) and International Finance Corporation (IFC), a member of the World Bank Group, with support from the European Commission (EC) and the government of France, are enabling an investment programme to modernise, expand and improve telecoms service quality in Ukraine.
The EBRD and IFC are jointly providing a total of US$ 435 million in long-term debt (US$ 217.5 million each organisation) to support a landmark project involving two leading Ukrainian telecom groups, lifecell and Datagroup-Volia, which recently merged to form a new group, Datagroup-Volia-lifecell. The investment will support the merged group in enhancing the resilience of the phone network and improving digital connectivity across Ukraine.
NJJ, a French telecoms investment holding company owned by investor Xavier Niel, leads the new group with a majority stake. NJJ is partnering with Horizon Capital, a leading private equity firm in emerging Europe, and Mykhaylo Shelemba, former CEO of Datagroup-Volia and now CEO of the new group.
Mark Bowman, EBRD Vice President, Policy and Partnerships, said: “The telecoms sector has been essential to Ukraine’s welfare and economic resilience since the war began. This operation will result in a large and reliable telecommunications operator, important domestically, as well as a very significant international investment in the Ukrainian economy, which we are proud to be part of.”
As the largest single foreign direct investment (FDI) into Ukraine by a major strategic investor since Russia’s invasion, the project is expected to send a strong positive signal to investors.
Through this high-impact transaction, the merged group will deliver improved mobile connectivity to 10 million subscribers and provide faster and more reliable fixed broadband access to around 4 million homes.
Leveraging its scale, the operational expertise of its new shareholders, and support from the EBRD and IFC, the group will also enhance protection against cybersecurity threats, introduce more competitive products and services, and implement best practice standards at a critical time.
The project will also support the telecoms sector’s recovery from the estimated US$ 1.9 billion in direct damages and US$ 750 million in losses incurred since Russia’s invasion.
To mitigate investment risks, a portion of the EBRD’s and IFC’s loans will be covered by guarantees provided by the government of France and the European Union under the Ukraine Investment Framework.
Since February 2022, the EBRD has deployed €5 billion in Ukraine, focusing on supporting energy security, vital infrastructure, food security, trade and the private sector, alongside key policy reforms. The EBRD’s Board of Governors has approved a capital increase of €4 billion to support further investment at this level in wartime.
Quotes from sponsors and lenders
Makhtar Diop, IFC Managing Director:
“By strengthening digital connectivity and network resilience, we are delivering a vital service to millions of Ukrainians while reaffirming our commitment to the country. This project is the largest foreign direct investment by a major strategic investor since Russia’s invasion. It sends a strong message to global investors about the resilience and significant potential of Ukraine's economy."
Jean-Noël Barrot Minister for Europe and Foreign Affairs:
“The recovery and reconstruction of Ukraine will require the mobilisation of both public and private actors investing in Ukraine’s future. This investment - the largest in over ten years - is a testimony of our commitment to a strong and lasting economic partnership with Ukraine. I am confident that it will serve as a flagship to highlight the wealth of investment opportunities and pave the way for other projects in the future.”
Antoine Armand Minister of the Economy, Finance and Industry:
“France is committed to supporting the resilience and reconstruction of Ukraine’s economy, which will require attracting large private investments in key sectors. This is why we have launched guarantee facility programs with both the EBRD and IFC to de-risk new private investments in Ukraine. This landmark project is the first utilization of these facilities. It will ultimately help better connect businesses and people across Ukraine. And we look forward to supporting other projects."
Olivér Várhelyi, European Commissioner for Neighbourhood and Enlargement:
“We are pleased that the European Union guarantees from the Ukraine Facility enable this landmark foreign investment into Ukraine. Today's agreement, which involves a significant financial commitment from the EU, will strengthen Ukraine's telecom infrastructure and service quality and enhance telecom connectivity for millions of Ukrainians in the most war-affected regions. The operation is proof of Ukraine's potential and our confidence in mobilizing investments for Ukraine.”
Xavier Niel, Founder of Iliad Group and NJJ Holding:
“We are delighted to reach this significant milestone with international institutions IFC and the EBRD. Without their support, the completion of our major investment in Ukraine’s telecoms sector would not have been possible. Our long-term financial partnership with the EBRD and IFC underscores our shared commitment to Ukraine’s economic growth and highlights the country’s promising investment potential.”
Lenna Koszarny, Founding Partner and CEO of Horizon Capital:
“We thank IFC and EBRD for their long-term partnership with Horizon Capital, and for backing our funds, co-investing with us, and providing financing in record time to enable this landmark transaction. Ukrainian consumers will reap the greatest benefits, with the ability to choose a reputable national telecom provider, backed by blue-chip capital and part of a global platform with over 100 million subscribers. This historic transaction proves Ukraine offers compelling, bankable deals, and the time to invest is now.”
Mykhaylo Shelemba, CEO of Datagroup-Volia-lifecell:
“I thank the IFC and the EBRD for their trust and support and look forward to this long-term partnership, which will enable a significant investment programme, including investments in the network, licenses, equipment and expansion of fixed and mobile communications infrastructure in Ukraine. Ukrainian businesses have huge potential for investment, which should continue, even in these difficult times.”
