Klitschko throws weight behind new Kiev fund

Among those watching Ukraine's world heavyweight boxing champion Wladimir Klitschko defend his title in New York's Madison Square Garden on Saturday April 25 will be his brother, Vitali Klitschko, the mayor of Kiev.

As well as advising his younger sibling from behind the ropes, the former boxing champion will be in New York and Washington to raise money for investment projects in Ukraine.

The pugilist turned politician will meet investment heavyweights including pension schemes, fund managers and private bankers, asking them to back infrastructure projects in Ukraine's capital.

The city is working with Dragon Capital, the Ukrainian investment bank, to raise $200m for a new fund investing in Kiev. Energy efficiency is a priority.

"How do we get Ukraine away from its dependency on Russian gas? How do we improve efficiency in waste management? It is these types of projects we are interested in," said Robert Koenig, a US businessman and adviser to Mr Klitschko, during an interview at the mayor's office in Kiev.

"We need foreign investors to invest money in the collection and recycling of garbage and the security of energy supply."

Potential investors will be presented with 30 energy-efficient projects and four waste management ventures during the US roadshow.

The initiative follows the city's first "open and transparent tenders" for waste management services. "The mayor is saying Kiev is a safe place to invest money, through this fund," said Mr Koenig, who admitted the fund is not for the faint-hearted.

"The Russians want instability and to keep Ukraine in the news to discourage foreign investment," he said, calling for greater backing of business initiatives from international bodies such as the European Bank for Reconstruction and Development.

Analysts offered cautious support. "Kiev needs any money it can get at present and public sector involvement makes it easier for the private sector to make the leap of faith," said Timothy Ash, head of emerging market research at ICBC Standard Bank in London.

Foreigners can benefit from cheap valuations, with a safer business climate in Kiev and western Ukraine "where it is difficult to imagine Russian tanks rolling in", he said.

But Ukraine still needs a big "seller", added Mr Ash, like Georgia had in zero tolerance for corruption and red tape, to attract significant investment.

"This is a once in several generations time for revolutionary and transformational reform," he said. "Ukraine's politicians must not settle for second best. They must go for best international standards and practice, and mobilise the population in support of this."

The fund's promoters will also aim to gather money from rich private investors of Ukrainian descent in the US.

Vadim Karasiov, a Ukrainian political pundit and former presidential adviser, added: "Kiev needs to become a financial centre and crossroads for investing from Europe into China. It needs to become a funds hub like Poland, using the stock exchange to raise money for small and medium-sized enterprises."

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