The private investment arm of West Australia's Forrest family has announced it will be injecting US$500 million ($747 million) into an investment fund for rebuilding Ukraine, seeding what Dr Andrew 'Twiggy' Forrest hopes will receive a minimum of US$25 billion ($37 billion).
The investment by the Tattarang Group was announced yesterday at the Bloomberg New Economy Forum in Singapore, where Dr Forrest likened the Ukraine Green Growth Initiative to the large-scale investment efforts that drove the German and Japanese economic miracles after World War II.
"Those funds will be ready to roll when the Ukrainian people and government say so. That'll of course be at the satisfactory end of hostilities when the Russian forces are expelled from the homelands of Ukraine," he told Bloomberg.
"Fortunately, we've been working with BlackRock, the largest fund in the world that very kindly contributed their time and energy to do the thorough governance and thorough due diligence which must happen to be able to facilitate highly professional investment like sovereign funds, institutions, professional investors, to come in in an orderly well governed way once the Russians leave."
The mining magnate added he had received great enthusiasm from delegates at the forum, claiming the investment was not only worthwhile on the grounds of supporting the civilised, intelligent, hardworking, determined people of Ukraine, but that he also believed it would have the high-growth returns.
The Forrest family expects the fund to grow to US$100 billion (AU$150 billion), with its investment focused on primary infrastructure such as energy and communications to build a digital green grid.
"Our investment fund will help to step beyond the wire lines of the past and accelerate digital communications development," Dr Forrest said.
"I invite professional investors, fund managers and sovereign funds and all who believe invading another country should now be forever consigned to the historical garbage bin of humanity’s worst mistakes, to join us."
Ukrainian President Volodymyr Zelenskyy welcomed the announcement, claiming it will facilitate the world’s first green digital economy and the "fastest growing economy in Europe, if not the world".
"Andrew and I have agreed we will not replace communist era rubbish Russian infrastructure, instead we will leapfrog to the latest technology," President Zelenskyy said.
"We will take advantage of the fact that what the Russians have destroyed can readily be replaced with the latest, most modern green and digital infrastructure."
He thanked Dr Forrest and Blackrock for their commitment which sends a strong signal to the global business community.
"The whole world can see how Russia, unable to win on the battlefield, terrorises civil infrastructure. The price of reconstruction is growing with each new strike. One day the aggressor will pay for everything in full, but our people cannot wait for electricity and heat for months," he said.
A period of consultation for the investment fund has been ongoing since early March and has included Dr Forrest briefing US President Joe Biden, former UK Prime Minister Boris Johnson, Australian Prime Minister Anthony Albanese, OECD Secretary-General Mathias Cormann, and the international business community including UN Special Envoy Michael Bloomberg, chairman and CEO of BlackRock Larry Fink and their teams.
Dr Forrest spent nearly a week in Ukraine and visited Kyiv in June, meeting the majority of Ukraine’s Cabinet including President Zelenskyy, where the strategy was agreed.
"Ukraine can enter a golden era. By business backing Ukraine, we’re sending a message to the world," he said.
"We will build a new future, not simply replace the past. We want Ukrainian people to know that we will be there with you, helping you to deliver strong economic growth in Europe.”
Blackrock last week signed a Memorandum of Understanding (MoU) with the Ukrainian Government on a framework for consultative assistance in developing a special platform to attract private capital for the recovery and support of Ukraine’s economy.
The MoU formalised a discussion in early September between President Zelenskyy, Fink and Dr Forrest around opportunities for attracting public and private investment in Ukraine.
"It is very important for us to demonstrate to the whole world that the war does not disallow investment in Ukraine. After all, investments are the key to the future rapid and effective economic recovery," said Ukraine's First Deputy Prime Minister – Minister of Economy Yuliia Svyrydenko after signing the agreement.
"It is very important for us to demonstrate to the whole world that the war does not disallow investment in Ukraine. After all, investments are the key to the future rapid and effective economic recovery," she said.
"Therefore, we have high expectations for cooperation with BlackRock’s FMA division. We hope that this “investment platform” will become an effective mechanism for mobilising private and public capitals in key sectors of our economy."
The Forrests’ philanthropic organisation Minderoo Foundation has already contributed millions of dollars to help the Ukrainian people, including funding the first humanitarian grain shipment out of Ukraine in August, and providing critical grain storage facilities for farmers whose crops would have otherwise perished.
Dr Forrest has been very active in Europe since the beginning of the war to address the energy challenges posed by the conflict with Russia, with his company Fortescue Future Industries (FFI) - a renewable energy development business spawned by his mining group Fortescue Metals Group (ASX: FMG) - signing a deal with leading energy network and infrastructure operator E.ON to deliver five million tonnes per annum of Australian green hydrogen (GH2) to the continent by 2030.
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