World Bank launches $2bn aid for Ukrainian businesses

The World Bank’s private investment arm, the International Finance Corp (IFC), has launched a $2 billion support package for Ukraine to help build the resilience of the Ukrainian private sector devastated by Russia’s war and to prepare for reconstruction.

The IFC said the new Economic Resilience Action Program for Ukraine includes up to $1 billion from IFC’s own account, with additional financing contingent on guarantees from donor governments.

“The Ukrainian private sector has demonstrated unprecedented resilience in the face of this war,” IFC Managing Director Makhtar Diop said.

“Supporting that resilience and continuing to build private sector capacity is a priority for us. 

 “Deploying capital during this extraordinary time is essential to keep businesses and vital services running, and, when the time is right, prepare for the massive reconstruction efforts to come,” Diop added.

The program will provide emergency liquidity support for agribusiness and trade finance, including for fuel imports, IFC said.

It will support agricultural trade routes and logistics and aid displaced people and affected municipalities. Another priority will be supporting companies that had to adapt operations to war conditions.

Lisa Kaestner, IFC’s regional manager for Ukraine, last month told a conference in London that the support would be extended over the next 18-24 months.

Ukraine’s central bank estimates that 11% of businesses have shut down due to the war as of September 2022, while more than half are operating below capacity.

Also Read: World Bank Warns Against Simultaneous Rates Hike

Russia’s war has caused extensive damage to Ukraine’s infrastructure, limited market access and disrupted the private sector, which previously contributed up to 70 per cent of the gross domestic product.

The World Bank estimated in October that it would cost $349 billion to rebuild Ukraine, but expects the costs to rise sharply after massive damage to electricity plants and other civilian infrastructure.

IFC said at least 5 million jobs have been lost.

In September, IFC invested $30 million in the Horizon private equity fund to inject capital into Ukraine’s and Moldova’s information technology sectors. It is working with the European Union to restore damaged residential buildings.

Reuters /Zainab Sa’id