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World Bank's IFC considers $1.5 billion in investments in Ukraine banking, farming, infrastructure

Published Jul 21, 2023 09:06AM ET Updated Jul 21, 2023 11:09AM ET
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© Reuters. FILE PHOTO: A combine harvests barley in a field, as Russia's attack on Ukraine continues, in Odesa Region, Ukraine June 23, 2022. REUTERS/Igor Tkachenko/File Photo

By Olena Harmash

KYIV (Reuters) -The World Bank's private investment arm is considering $1.5 billion in investments in Ukraine's banking, agribusiness and infrastructure sectors, a senior official with the International Finance Corporation (IFC) said on Friday.

Alfonso Garcia Mora, IFC's Regional Vice President for Europe, Latin America and the Caribbean, hailed the resilience of Ukraine's private sector during the war, and said the lender had provided nearly $400 million in support since the start of Russia's invasion nearly 17 months ago.

The funds supported foreign trade and key agribusiness and IT sectors. Garcia Mora said the IT sector could be a "revolution in this country", helping to drive Ukraine's recovery and build back a more innovative and diversified economy.

The IFC will keep its focus on the agribusiness sector, plans to support the banking sector and is eying more long-term projects in infrastructure, he said.

"We have identified, we are working already on a pipeline of $1.5 billion ... of companies which we can invest in," Garcia Mora told Reuters in an interview as he visited Kyiv to mark the re-opening of the World Bank Group's office in the capital.

"I would like to deliver this $1.5 billion in the next 12 to 18 months."

Ukraine's economy has been severely hit by Russia's invasion, and shrank by about a third last year. While the government relies heavily on Western financial aid to be able to finance its budget and social spending, private companies struggle with affordable access to capital.

Garcia Mora said the banks had enough liquidity but needed support to reduce risks. The IFC was working on risk-sharing products and also sought to provide working capital to smaller businesses via Ukrainian banks, he said.

The lender announced on Friday that it was setting up a 20-million-euro ($22.24 million) risk-sharing facility for Ukrainian branches of OTP Bank and OTP Leasing.

It also said that along with its partner fund Horizon Capital, IFC had invested $5 million in Miratech, IT services and consulting company.

Reiterating the IFC's commitment to supporting Ukraine's private sector as the country plans for the post-war reconstruction, Garcia Mora said the biggest potential for private investors was in energy, transport and also agribusiness.

The government and the World Bank estimated in a joint assessment in March that the cost of reconstruction and recovery in Ukraine had reached about $411 billion. Garcia Mora said that about $140 billion could come from private investors.

($1 = 0.8993 euros)

World Bank's IFC considers $1.5 billion in investments in Ukraine banking, farming, infrastructure
 

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