World Bank's investment division secures nearly $1 billion for Ukraine
Illustrative photo (Getty Images)
The private investment arm of the World Bank has attracted nearly $1 billion for the reconstruction of Ukraine's private sector, according to a statement by the Managing Director of the International Finance Corporation (IFC), Mahktar Diop, writes Reuters.
Diop mentioned that about $620 million of the funds raised for Ukraine, which is part of a $2 billion package announced in December 2022, came from the investment unit's own balance, while another $360 million came from external financing.
"First of all we need to continue to monitor how the political situation evolves and there are some concerns. We will need to continue mobilizing more resources to guarantee a little bit some of the investments that we're doing because we take a lot of investment on our own balance sheet," he said.
Diop added that the IFC is more inclined to take risks in Ukraine compared to other development agencies.
Kyiv is considering mobilizing funds for reconstruction, estimated at $400 billion, more urgently than ever, as signs of donor fatigue emerge in Europe and the United States.
According to Diop, providing guarantees to give external investors confidence in deploying resources was the "main challenge" facing the IFC in mobilizing further funds for its support package.
Ukraine's economy
In the months following Russia's full-scale invasion in February 2022, Ukraine was forced to burn through its foreign reserves, while the central bank began purchasing government bonds to cover the financing deficit. The economy contracted by almost a third.
Since then, Ukraine's fiscal position has strengthened with the allocation of billions of dollars in aid from allies. In November, the IMF raised its forecast for Ukraine's real GDP growth in 2023 to 4.5% (from the previous range of 1-3%).
However, it is expected that growth will decrease to 3-4% in 2024 as the war continues, and risks of worsening prospects remain exceptionally high.
