Brussels, February 5, 2024 - The European Commission and IFC have just signed a guarantee agreement to support investments that will help drive an inclusive and sustainable reconstruction in Ukraine.
Through the agreement the European Union will provide up to €90 million in financial guarantees to support investments in Ukraine to IFC, a member of the World Bank Group, as part of IFC's Better Futures Program (BFP). Mobilized investments under the program by the private sector are expected to reach more than €500 million across sectors including essential infrastructure and goods production, promoting decarbonization and the preservation of livelihoods.
"Support from the European Commission has been and will continue to be instrumental in our efforts to extend and scale up crucial investments in Ukraine," said Alfonso García Mora, IFC Vice President for Europe, Latin America and the Caribbean. "With the EFSD+ guarantee, we are moving fast to implement innovative and impactful projects and back private sector companies, fulfilling our commitment to mobilize private capital to support Ukraine's economy and reconstruction."
Commissioner for Neighbourhood and Enlargement, Olivér Várhelyi, added: "This agreement is yet another example of our excellent cooperation with IFC in our effort to boost investments in Ukraine. This EFSD+ guarantee will help rebuild the country's infrastructure, support its business sector, and strengthen the resilience of its economy, reaffirming the European Union's commitment to stand by Ukraine in this time of crisis."
In 2022, IFC launched the $2 billion Economic Resilience Action (ERA) Program to support Ukraine's private sector. Since then, IFC has provided financing of over $650 million and mobilized over $400 million to support the tech sector, agribusiness, critical exports and imports, and SME finance. It complements the World Bank Group's joint efforts to help businesses stay afloat and enable the government to provide essential services and make critical repairs.
Total EU support to Ukraine and its people since the beginning of Russia's invasion of Ukraine amounts to over €88 billion. This includes contributions from EU institutions and Member States for economic, financial, military, and humanitarian support, as well as hosting Ukrainian refugees in EU Member States.
About EFSD+
The European Fund for Sustainable Development Plus (EFSD+) is part of the European Union's investment framework. It supports public and private investment in partner countries worldwide by providing financial guarantees, blended finance, and technical assistance to promote inclusive economic development. Financial guarantees under EFSD+ are legally binding agreements under which the EU agrees to pay the amount due in case of a financial loss that lenders might face. By using blended finance, the EU provides a limited contribution to mobilise funding from financial institutions and other sources (including the private sector) to enhance the development impact of investment projects. Through the EFSD+, and for the period 2021-27, the EU is channelling €22.5 billion to boost lending and investments in fragile contexts in the EU's Neighbourhood and Enlargement countries. For more information, visit European Neighbourhood and Enlargement Negotiations - European Commission (europa.eu)
About IFC
IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises.
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