The International Finance Corporation (IFC), the private investment arm of the World Bank, is contemplating investments totaling $1.5 billion in Ukraine’s crucial banking, agribusiness, and infrastructure sectors, according to Alfonso Garcia Mora, IFC’s Regional Vice President for Europe, Latin America, and the Caribbean.
Commending the resilience of Ukraine’s private sector amidst the ongoing war, Garcia Mora stated that the IFC has already extended nearly $400 million in support since the start of Russia’s invasion about 17 months ago.
The provided funds have played a pivotal role in supporting foreign trade, as well as bolstering key agribusiness and IT sectors. Notably, Garcia Mora highlighted the transformative potential of the IT sector in driving Ukraine’s recovery and fostering a more innovative and diverse economy.
Emphasizing the IFC’s focus on the agribusiness sector, Garcia Mora also revealed plans to support the banking industry and explore long-term infrastructure projects. He stated, “We have identified and are already working on a pipeline of $1.5 billion…of companies in which we can invest,” expressing the intention to disburse this amount within the next 12 to 18 months.
Ukraine’s economy endured a severe downturn due to Russia’s invasion, witnessing a contraction of about a third in the past year. While the government relies heavily on Western financial aid to manage its budget and social spending, private companies struggle to access affordable capital.
To address this issue, Garcia Mora mentioned that banks have sufficient liquidity but require support to reduce risks. The IFC is actively developing risk-sharing products and seeking to provide working capital to smaller businesses through Ukrainian banks.
In support of its commitment to bolster Ukraine’s private sector during the post-war reconstruction phase, the IFC, along with its partner fund Horizon Capital, recently invested $5 million in Miratech, an IT services and consulting company. Additionally, the IFC announced the establishment of a 20-million-euro ($22.24 million) risk-sharing facility for Ukrainian branches of OTP Bank and OTP Leasing.
Garcia Mora reiterated that the most promising investment opportunities for private investors lie in the energy, transport, and agribusiness sectors.
According to a joint assessment by the government and the World Bank in March, the estimated cost of reconstruction and recovery in Ukraine amounted to approximately $411 billion, with Garcia Mora suggesting that around $140 billion could potentially be sourced from private investors.
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