The Italian company Fincantieri is leading the way with a plan to develop the Odesa Sea Port, while Wall Street giants such as Blackstone, Carlyle and KKR are trying to grab a piece of the Ukrainian market, as reported by the Asia Times.
Fincantieri, the largest European shipbuilder based in Trieste, Italy, has been quietly working to transform Ukraine’s defunct state-owned shipyards in the Odesa Sea Port into a state-of-the-art production center that will build some of the most advanced commercial vessels worldwide.
Expansion to Odesa seems to be a logical next step for the Italian company after its success in building new generation commercial vessels for its Norwegian subsidiary VARD in Tulcea, Romania. Fincantieri employs nearly 4,500 people in Tulcea and Braila, near the Moldovan border.
Once a sleepy tourist town in the Danube Delta, Tulcea has become a center of geopolitical interest, becoming a major transportation hub for Ukrainian agricultural exports after russia seized the Sea of Azov.
Tulcea was also mentioned in the news as russia continues to send combat drones there in order to interfere with shipping. The enemy’s drones have crossed the border and landed on Romanian territory – that was a serious military and diplomatic escalation given that Romania is a member of NATO and the European Union.
However, the russian drones failed to weaken Fincantieri’s commitment to northeastern Romania and its plans for Odesa. If it goes ahead with its plan to build a new generation shipyard in Odesa, it could well become the largest foreign investor in the history of Ukraine.
The IFC and the World Bank’s MIGA Insurance Group have already informed Fincantieri on their readiness to provide project financing and political risk insurance, while the US International Development Finance Corporation (US DFC) is ready to provide military risk insurance.
As emerging market experts like to point out, no one guards an empty bank; security resources are deployed to protect valuable assets, not the other way around. While Fincantieri is best known for building giant cruise ships like Carnival, it is also a major contractor in the naval defense industry.
Apart from building frigates for the U.S. Navy, Fincantieri recently acquired Whitehead Alenia Sistemi Subacquei S.p.A. from the Italian defense company Leonardo, which is reportedly capable to protect the Odesa Sea Port from russian submarines, maritime drones and torpedoes.
Fincantieri’s plans are certainly music to the ears of Sergii Marchenko, the Minister of Finance of Ukraine, who is promoting an aggressive program aimed at privatization of the Ukrainian state assets to liberalize the Ukrainian economy and to reduce its external debt obligations, especially those of state-owned enterprises.
Fincantieri, along with foreign investments into Odesa by Cargill and Dubai DP Port, offers hope for an economic renaissance for Odesa that has not been seen since the Porto Franco era in 1819-1859.
Today the remote wealthy merchants are Stephen Schwarzman, co-chairman and co-founder of the American private equity giant Blackstone Inc, and David Rubenstein, co-founder and co-chairman of the Carlyle Group. Both were among the foreign business leaders who met Volodymyr Zelenskyy, the President of Ukraine, in Davos last January.
Mr. Schwarzman could be appointed the US Secretary of Commerce during Trump’s second term, while Mr. Rubenstein could be appointed the US Treasury Secretary or Secretary of State if Kamala Harris wins the election.
Mr. Schwarzman has already instructed his staff to target investments in the Ukrainian private sector companies, such as cloud video game giant Boosteroid. Mr. Rubenstein, meanwhile, has used his considerable political and economic influence to garner support for Ukraine among both the American and world leaders.
While Ukraine has effectively driven the russian navy out of the Black Sea, new foreign investment from companies such as Fincantieri, Blackstone, Carlyle and KKR could help transform the war-torn country into a new European powerhouse in the coming decades.