16 Dec 2022 14:43

IFC adopts $2 bln anti-crisis package to back Ukraine's private sector

MOSCOW. Dec 16 (Interfax) - The International Finance Corporation (IFC) has announced a new $2 billion anti-crisis financial package to enhance the Ukrainian private sector's resilience and support livelihoods.

"The $2 billion response package includes finance from IFC's own account working alongside guarantees from donor governments," Ukrainian media quoted the IFC as saying on Friday.

Private sector in Ukraine previously contributed up to 70% of the country's GDP, and the National Bank of Ukraine (NBU) found that 11% of businesses shuttered as of September 2022, while more than half operated below capacity, the IFC said. According to the Ukrainian Economy Ministry's estimates, at least 5 million jobs were lost, it said.

Throughout the crisis and at the initial reconstruction stage, the program "will focus on ensuring access to critical goods and services with emergency liquidity support for agribusiness and trade finance, including for fuel imports," it said.

The program's other priorities at this stage include sustaining economic activity, supporting crucial economic infrastructure, i.e. agricultural trade routes and logistics, and providing for the needs of displaced people and affected municipalities, it said.

The IFC will provide financing directly to existing and new clients in the real sector, as well as through financial intermediaries "to on-lend to micro, small and medium enterprises and agribusinesses, and through trade finance guarantees," it said.

"The Ukrainian private sector has demonstrated unprecedented resilience," the IFC quoted its Managing Director Makhtar Diop as saying.

"Supporting that resilience and continuing to build private sector capacity is a priority for us," he said.

Providing financing at this time requires support from donors, Diop said. "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," he said.

The IFS, which is part of the World Bank Group, said that, earlier this week, it had also signed an agreement to serve as a strategic advisor to the Ukrainian government in identifying and prioritizing reconstruction projects that can be implemented with private participation, developing public-private partnerships, and supporting reforms in the banking and corporate sectors.