IFC investment in Ukraine might reach $500 mln within next few months - vice president
MOSCOW. April 18 (Interfax) - The World Bank Group's International Finance Corporation (IFC) has invested $208 million in Ukraine since the end of February 2022, and the amount of its investment in the country might be increased to $500 million within the next few months, IFC Vice President for Europe, Latin America and the Caribbean Alfonso Garcia Mora said.
"We are trying to really escalate, scale up our presence, our investments. I think that we can be at $500 million in the next few months, with over $200 million plus what we have currently in the pipeline," Garcia Mora said in an interview with Ukrainian media.
The IFC is working on projects worth in total about $400 million, and the final sum will depend on support from donors, he said.
The IFC launched a $2 billion response package in mid-December 2022, which would enable it to invest $2 billion in the next 18 months, including $1 billion from its own account and another $1 billion in guarantees and concessional financing from international donors, he said.
"We are in the process of receiving increased support from international donors, which will allow us to do even more. But, as of now, we're using our own funds. We have already significantly increased our presence, our investments without any guarantees or international support, in trade finance, the agribusiness sector, and in the high-tech sector," Garcia Mora said.
The IFC is currently studying other potential investments in the agribusiness sector, which it believes would be critical. It is also working to help the Ukrainian banking sector to offer more financial services, he said.
Unlike the World Bank's URTF trust fund to support the public sector, the IFC is mobilizing financial support from donors to channel it to the private sector, he said.
"Normally, how it works is, that we can leverage each dollar a donor contributes up to four times, because we can mobilize and bring on board other investors that otherwise wouldn't have" joined it, he said.
Concessional financing and guarantees need to be increased to support investment in the private sector, he said.
In commenting on the various scenarios of the duration of the Ukraine crisis envisioned in the IMF's new financing program for the country, which presume that it might last through 2025, Garcia Mora said the longer it lasts, the longer the IFC would have to continue focusing on the first phase of its work in the country and the later it would be able to switch to the reconstruction phase.
The first phase implies assistance to specific priority sectors by providing them with floating assets for short-term needs, but anyway, the duration of the crisis will not have a negative effect on the IFC's commitments and the volume of investment, he said.
When the crisis is over, "there will be a much bigger influx of capital into the country. But we will continue supporting the country even if it takes until 2025," he said.
Garcia Mora said he expected the participants in the upcoming Ukraine Recovery Conference in London at the end of June would be able to agree on a roadmap for raising sufficient funds and using them as efficiently as possible to finance priorities indicated in the World Bank's Rapid Damage and Needs Assessment (RDNA2).
"We need to redirect financing to those areas and through those institutions that can leverage contributions and multiply their impact now. And I think that the IFC can play a big role," he said.
As reported earlier, the World Bank Group, the Ukrainian government, the European Commission, and the United Nations reviewed their estimates of the funding Ukraine would need for recovery up to $411 billion as of February 24, 2023 from $349 billion as of June 1, 2022.
According to the World Bank's RDNA2, which comprehensively reviews the impact of the crisis on twenty sectors, Ukraine would require at least $14 billion in investment for priority recovery needs in 2023.