EBRD to boost capital for assistance to Ukraine
Photo: EBRD President Odile Renaud-Basso (Getty Images)
The European Bank for Reconstruction and Development (EBRD) is working on a plan to increase its capital to have the capacity to invest around 1.5 billion euros annually in Ukraine, said EBRD President Odile Renaud-Basso in an interview for Bloomberg.
EBRD has become an important financial sponsor for Ukraine's war-stricken economy. In May, the bank announced plans to request shareholders increase the capital by up to 5 billion euros by the end of this year.
"We’re now moving toward a conclusion to convince them that it’ll be better to have a capital increase. Financially, it makes more sense because for one euro of capital we can extend five euros of financing." Renaud-Basso said.
The prospects for increasing investments to support the economy will be welcome news for Ukraine as concerns grow that support for military efforts is wavering. U.S. lawmakers decided on September 30 to abandon a $6 billion aid package for Kyiv to help prevent a government shutdown. A former prime minister who promised to stop military aid to Ukraine won the elections in Slovakia on Saturday.
In March, the World Bank raised its estimate of what Ukraine will need for recovery and reconstruction to at least $411 billion— a figure 2.6 times the projected gross domestic product of the country for 2022.
Investments in Ukraine
Renaud-Basso said the target investment indicator of 1.5 billion euros per year can be compared to the pre-war figure of 1 billion euros.
She added that the war has pushed Ukraine away from its traditional reliance on heavy manufacturing, targeted by Russia, to technologies and digital solutions used in the military industry. Energy will shift towards renewable sources, and agriculture remains a key sector.
"We are really doing everything that we can in order to facilitate this investment and to see how we can support any project of development," Renaud-Basso said. EBRD has already noticed limited interest from private investors in Ukraine.
She added that money is being invested in restoring logistical capabilities, relocating activities, and rebuilding what has been destroyed.
Earlier, EBRD President Odile Renaud-Basso stated that Ukraine's financial and military support is a "key issue," so it needs to be preserved and increased.
Ukrainian President Volodymyr Zelenskyy met with EBRD President Odile Renaud-Basso at the end of September.
Zelenskyy emphasized that Ukraine is interested in continuing cooperation with the EBRD, especially in energy security, trade financing, support for critical infrastructure and municipalities, food security, and the corporate sector.
