The Commercial Arm of the World Bank Launches a $2 Billion Program to Aid Ukrainian Firms

Thursday, the World Bank's private investment arm announced that it has started a $2 billion aid package for Ukraine to help rebuild the country's business sector, which was decimated by Russia's war.

The International Finance Corporation has stated that the new Economic Resilience Action Program for Ukraine will contain up to $1 billion from IFC's own account, with further financing subject on donor government guarantees.

IFC's regional manager for Ukraine, Lisa Kaestner, stated at a London conference last month that the financing will be extended over the following 18 to 24 months.

As of September 2022, the Ukraine's central bank estimates that 11% of firms have closed owing to the war, while more than half are operating below capacity.

IFC Managing Director Makhtar Diop remarked, "The Ukrainian private sector has displayed exceptional tenacity in the face of this war."

"Supporting this resilience and continuing to strengthen private sector capability are our top priorities. "It is important to deploy cash during this unprecedented moment to maintain the operation of enterprises and key services and, when the time is right, to prepare for the vast reconstruction activities that will follow," Diop stated.

The war between Russia and Ukraine has caused substantial damage to Ukraine's infrastructure, restricted market access, and crippled the private sector, which once generated up to 70 percent of GDP.

IFC stated that the program will provide liquidity support for agricultural and trade finance, including gasoline imports. It will boost agricultural trade routes and logistics, as well as provide assistance to displaced individuals and municipalities.

Another priority will be assisting companies that had to adapt their operations to wartime conditions by assisting them in locating alternative export routes for grains, identifying alternative suppliers and buyers for agribusiness firms, developing infrastructure projects with private investment, and bolstering reforms essential to private investment.

IFC invested $30 million in the Horizon private equity fund in September to inject capital into the information technology sectors of Ukraine and Moldova. Together with the European Union, it is restoring damaged residential structures.

The World Bank predicted in October that rebuilding Ukraine would cost $349 billion, but following major damage to power plants and other civilian infrastructure, the costs are certain to skyrocket.