European Investment Bank aims to raise 100 bln EUR to help rebuild Ukraine

European Investment Bank aims to raise 100 bln EUR to help rebuild Ukraine

During the Ukraine Recovery Conference in Lugano, Switzerland, the European Investment Bank (EIB) has proposed to extend assistance to Ukraine by a new EU-Ukraine Gateway Trust Fund (E-U GTF). EIB Vice-President Teresa Czerwinska recalled that the EIB investment portfolio in Ukraine was EUR 7 billion, and it has allocated around EUR 700 million since the beginning of the war.

The EIB is proposing a funding structure previously used during the COVID-19 pandemic to help rebuild Ukraine with up to 100 billion euros ($104.3 billion) of investment, according to Reuters. The EU-Ukraine Gateway Trust Fund (E-U GTF) would seek to have an initial 20 billion euros in contributions from EU countries and the EU budget in the form of grants, loans and guarantees. The guarantees in particular would have a multiplier effect, as applied to infrastructure projects totaling some 100 billion euros.

The EIB is proposing a fund that would work like that used in the COVID-19 pandemic to guarantee financing for small and medium sized companies. The E-U GTF could contribute to rebuilding bridges or renovating water or waste water services, particularly for cities whose populations have expanded due to the influx of internally displaced persons from other parts of Ukraine since Russia’s Feb. 24 invasion of the country. Projects could also focus on facilitating Ukraine’s exports or on its energy and digital infrastructures.

The EIB or development banks such as KfW or DFC would be able to draw on the fund or its guarantees for investments they oversee. The fund is also designed to encourage private businesses that would likely view investment financing in Ukraine as too risky. The European Commission must first give its assent, with a majority of EU countries then having to approve the plan.

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