Ukraine and Poland are rapidly emerging as key players in the European rail freight market, with trade flows between the two nations increasing significantly despite ongoing challenges. In 2022, Ukraine handled 314 million tonnes of freight, while Poland processed 238 million tonnes. This upward trend is expected to continue, particularly with the rise of intermodal trade, which grew by 15% annually from 2022 to 2023.

As both countries focus on post-war reconstruction, there are substantial investment opportunities in logistics infrastructure and rail services. We have a clear strategy to capitalize on this market, identifying innovative ways to generate revenue even amid special circumstances. This overview presents our investment thesis and fund strategy, outlining the market dynamics, infrastructure needs, and strategic initiatives that position Ukraine and Poland for future growth in the logistics sector. For a deeper insight into these developments and our approach to profitability, read on!

The logistics and infrastructure sectors in Ukraine and Poland are undergoing a profound transformation, driven by regulatory changes, ambitious infrastructure projects, and deepening cross-border collaboration. Positioned at the crossroads of Europe, these two nations are uniquely placed to redefine their roles in regional and global trade, creating an unmatched potential for growth and innovation.

Poland and Ukraine's geographical locations, historically viewed as both a challenge and an opportunity, are now emerging as strategic assets in the modern global economy. Situated on the vast European Plain, they form critical corridors for the flow of goods between Asia and Europe as well as along the north-south and east-west axes. With most transcontinental trade passing through their territories, the two nations are poised to play a central role in shaping the future of logistics and supply chains across the continent.

The EU’s TEN-T network development—an ambitious plan to create a unified and efficient transportation network—places Poland at the heart of key initiatives such as the Via Baltica and other strategic corridors. These projects not only reinforce Poland’s role as a major logistics hub but also align with the broader European vision of integration and connectivity under the Three Seas Initiative. The growing emphasis on infrastructure linking northern and southern Europe, alongside traditional east-west trade routes, is generating a wave of new logistics and storage needs that both Poland and Ukraine are well-positioned to meet.

Recent EU CO2 emissions standards are further accelerating the need for sustainable transport solutions. The shift to low-emission vehicles, rail delivery, and integrated intermodal transport systems presents a significant opportunity for both nations to lead in the modernization of logistics. Border hubs, transshipment centers, and seamless intermodal terminals will be vital for accommodating the increasing trade flow between the EU and Ukraine, with over 70% of this flow passing through Poland. Investments in these areas will not only strengthen the economic ties between the two nations but also enhance their competitiveness in global markets.

Poland’s established role as a logistics hub for Ukraine has become even more critical during the ongoing conflict, underscoring the importance of robust cross-border infrastructure. The construction of modern storage and handling facilities on both sides of the border will be essential for ensuring the efficient movement of goods, from humanitarian aid to commercial cargo. These facilities will form the backbone of a resilient and adaptable logistics ecosystem, enabling both countries to thrive in an increasingly complex and interconnected world.

Ukraine’s ongoing privatization of its state-owned railway monopoly, Ukrzaliznytsya, adds another layer of opportunity. This process, required as part of Ukraine’s EU accession, will break up the monopoly’s dominance over locomotives and railcars, creating an open market ripe for investment. Poland’s successful railway reforms provide a blueprint for this transformation, making Polish expertise a key resource for Ukraine’s modernization. This privatization effort, combined with the urgent need to overhaul Ukraine’s rolling stock—90% of which is outdated—offers a rare chance to shape the future of rail logistics in the region.

The increasing importance of intermodal logistics and storage cannot be overstated. With growing trade flows, both nations are seeing a surge in demand for advanced logistics centers that integrate road, rail, and storage capabilities. These facilities will not only address current trade needs but also prepare for the expanded role of the region as a key transit point for Europe’s supply chains.

Together, Poland and Ukraine represent a cornerstone of Europe’s emerging logistics landscape. By leveraging their strategic locations and shared commitment to modernization, the two countries can become indispensable players in global logistics. Their collaboration—strengthened by initiatives such as the Three Seas Initiative and the TEN-T network—will drive sustainable growth, technical innovation, and unmatched connectivity across the continent. From modern rail systems to state-of-the-art logistics hubs, the synergies between these nations offer a transformative vision for the future of European trade.

Our investment strategy in logistics is centered on the development of key infrastructure that supports the dynamic and evolving trade flow between Ukraine and Poland. One of our primary focuses is the establishment and enhancement of intermodal terminals along the Ukrainian-Polish border, a region poised for significant growth as cross-border trade increases at an annual rate of 15%. These terminals are crucial for facilitating the efficient movement of goods between the two countries, offering a robust solution for the growing demand in logistics operations. As intermodal trade becomes an increasingly integral part of global supply chains, our investment in this area aligns with the expected expansion of this market in the post-war era.

Additionally, we are targeting investments in bogie change stations, which are essential for enhancing rail connectivity between Ukraine and Europe. By enabling Ukrainian wagons to conform to the European standard gauge, these stations will streamline the logistics process, reducing delays and enhancing the overall efficiency of rail transport. This investment will further bolster the logistics infrastructure, particularly in the context of the growing intermodal trade.

A significant opportunity for growth lies in the anticipated debundling of Ukrzaliznytsia, Ukraine's state-owned railway company. This transformation will create a new, private rail transportation market, fostering competition and innovation within the sector. As a result, the divestment of underperforming assets such as train depots, repair plants, and outdated rail equipment will open up avenues for fresh investments and modernization. This process presents a unique opportunity to acquire and enhance assets in a market poised for change and expansion.

Our strategy is further strengthened by strategic partnerships with key players in the logistics sector. In Ukraine, we are partnered with the largest private rail freight operator, which owns a diversified fleet of 6,000 wagons and operates its own maintenance facility. In Poland, our partner is the founding entity behind the largest private locomotive rental and leasing company in Central and Eastern Europe. This collaboration, alongside our partner’s ownership of five intermodal terminals in Poland, positions us to drive growth and create synergies across the Ukrainian-Polish logistics landscape.

To support these initiatives, we are establishing a logistics investment fund with a target size of $100 million. This fund will focus on sourcing high-potential logistics projects, conducting thorough due diligence, and acquiring logistics operators or key infrastructure assets that align with our strategic goals. By attracting investors with contributions exceeding $1 million, the fund will be registered as an EU umbrella investment fund, providing transparency and simplicity in its structure. Our approach is to leverage our local expertise in both Ukraine and Poland to restructure and optimize acquired businesses, creating sustainable cash flows or managing successful exit strategies.

In conclusion, our investment strategy is designed to capitalize on the burgeoning opportunities in the Ukrainian-Polish logistics market. By focusing on intermodal terminals, bogie change stations, and strategic partnerships, we are positioning ourselves for significant long-term returns. Our $100 million logistics investment fund will drive this growth, contributing to the modernization of the region’s logistics infrastructure and supporting the broader economic recovery of both Ukraine and Poland.

Here is an extract from our project pipeline, highlighting several key opportunities thoroughly evaluated by our team. This overview focuses on select initiatives that demonstrate significant potential for high returns in the rail freight and intermodal logistics sectors in Ukraine and Poland:

• Dry Port Terminal in Ukraine: project requires an estimated investment of $7 million. It aims to enhance intermodal capabilities and streamline trade flows, making it an attractive investment.

• Rail Freight Operator in Poland: established operator generates approximately $145 million in revenue and presents an investment opportunity of $60 million. This investment will bolster our position in the competitive Polish rail market.

• Another Rail Freight Operator in Poland: revenues around $60 million, this operator necessitates an investment of $30 million. Investing in this entity will further diversify our portfolio within the rail sector, promising strong returns.

• Locomotive Production and Engine Repair in Ukraine: venture focuses on enhancing local production capabilities and supporting the maintenance of rail assets, requiring an estimated investment of $10 million.

• Rail Car Repair Plant in Poland: while revenue details are currently unavailable, this facility is crucial for maintaining and repairing rolling stock, contributing to operational efficiency.

In total, this extract highlights projects with an estimated investment of $107 million, all of which offer robust potential for high returns. These opportunities are strategically aligned with our goal of enhancing trade flows and logistics efficiency in the Ukrainian-Polish corridor, positioning us for success in the post-war recovery landscape.