BRUSSELS (Reuters) – The European Union’s lending arm has announced the launch of a new fund worth 400 million euros ($447 mln) aimed at rebuilding Ukraine before the bloc’s longer-term reconstruction plan comes into effect.
Sixteen out of the EU’s 27 member countries have committed to contributing to the European Investment Bank’s (EIB) Ukraine Trust Fund, providing grants, loans, and guarantees to Ukrainian banks and businesses.
France and Italy have taken the lead, each contributing 100 million euros to the fund. The deputy head of the EIB has stated that the funds could be allocated towards repairing major infrastructure, providing financing for small and medium-sized enterprises, and supporting public services.
“As the EU, we are committed to financing the resilience of Ukraine,” stated EIB Vice-President Teresa Czerwinska. “We provide financing to strengthen the society and the economy.”
Czerwinska, who is a contender for the position of the next EIB head, noted that the bank disbursed 1.7 billion euros in Ukraine last year for various projects such as schools, hospitals, social housing, kindergartens, and urban transport development.
She also mentioned that the bank will further enhance the new fund by providing an additional 100 million euros for technical assistance, helping Ukraine utilize the funds effectively – a challenge for more developed and wealthier EU countries during peacetime.
The EU has already pledged 18 billion euros to support Ukraine’s budget this year, with an additional commitment of 50 billion euros for the period of 2024-2027 to aid in the country’s reconstruction from the war initiated by Russia in February 2022.
Before the commencement of this new financing, Czerwinska highlighted that the EIB’s new fund will serve as a bridge until the end of 2025.
Germany, the EU’s largest economy, has opted not to support the EIB fund, with a diplomat stating that Berlin prefers to allocate spending through the central EU budget, to which all member states contribute.
The World Bank estimates that Ukraine’s reconstruction needs exceed $400 billion over a ten-year period following the first year of the war.
At a conference in London earlier this month, international donors pledged billions of dollars in assistance to Ukraine. Kyiv requested nearly $7 billion for the initial phase of recovery, focused on restoring the energy sector before winter.
($1 = 0.8952 euros)
(Reporting by Gabriela Baczynska; Editing by Conor Humphries)
Credit: The Star : News Feed
