Heads of the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the Council of Europe Development Bank (CEB), the International Monetary Fund (IMF), and the World Bank Group (WBG) have agreed to boost financial support to Ukraine as well as its neighbours.
“We acknowledge the importance of working together to coordinate our respective responses to support Ukraine and neighbours on the financing and policy fronts and maximise impact on the ground. We are committed to strengthening international cooperation and solidarity in the face of this enormous challenge,” they said in a joint statement.
“The entire global economy will feel the effects of the crisis through slower growth, trade disruptions, and steeper inflation, harming especially the poorest and most vulnerable. Higher prices for commodities like food and energy will push inflation up further. Countries, particularly those neighbouring Ukraine will suffer disruptions in trade, supply chains and remittances as well as surges in refugee flows. Reduced confidence and higher investor uncertainty will impact asset prices, tighten financial conditions, and could even generate capital outflows from emerging markets.”
Below is emergency support to Ukraine and its neighbours from international financial institutions:
The EBRD has approved a “War on Ukraine – EBRD Resilience Package”, initially sized at 2 billion euros, to respond to the immediate needs of the people affected by the war and – when conditions permit – support the substantial reconstruction of Ukraine. The EBRD’s package comprises an immediate Resilience and Livelihoods program covering the areas of energy security, nuclear safety, municipal services, trade finance support and liquidity for SMEs in Ukraine and in neighbouring affected countries. Once conditions permit, the EBRD will also be prepared to take part in a reconstruction programme for Ukraine, to rebuild livelihoods and businesses; restore vital infrastructure; support good governance and enable access to services. It envisages working with international partners including the EU and U.S., as well as bilateral donors and other international financial institutions.
The EIB has prepared an emergency solidarity package for Ukraine of 2 billion euros, including the provision of 668 million euros in immediate liquidity assistance to the Ukrainian authorities. This has been developed in close collaboration with the European Commission. As part of this package, the Bank is also accelerating the delivery of an additional 1.3 billion euros of commitments made for infrastructure projects. Of the emergency liquidity assistance, 329 million euros has been disbursed. An additional 329 million euros will be disbursed over the coming days. In parallel, the Bank is developing a multi-billion euro package for the EU Eastern and Southern Neighborhood, the EU Enlargement Region and Central Asia to mitigate the consequences of the refugee crisis and help address the social and economic fallout caused by the war. Within the EU, EIB will work closely with the Member States, National Promotional Banks and the European Commission to prepare an action plan to help alleviate the impact of the refugee crisis on the EU countries hosting refugees.
The CEB, according to its membership and special social mandate, has provided emergency grants to Ukraine’s neighbouring countries to cover the immediate needs of refugees, including transportation and orientation. The CEB stands ready to also provide flexible, fast-disbursing loans to address the significant financial needs of neighbouring and other countries hosting large inflow of refugees, while remaining focused on the social sector.
The IMF disbursed emergency assistance of $1.4 billion to Ukraine on March 9 under the Rapid Financing Instrument to help meet urgent financing needs including to mitigate the economic impact of the war. IMF staff remains closely engaged with the authorities to provide policy support as they continue to design and implement effective crisis mitigation measures. The IMF is also currently working with Moldova, which has requested an augmentation of its existing IMF-supported program. The Fund stands ready to support neighbouring and other countries affected by the spillovers of the war through all its relevant instruments.
The World Bank Group has already mobilised more than $925 million for Ukraine, including fast-disbursing budget support to help the government provide critical services to Ukrainian people, of which $350 million has been disbursed. This financing is part of a $3 billion package of support planned for Ukraine in the coming months. The World Bank also set up a multi-donor trust fund (MDTF) that is among the most rapid, targeted, and secure mechanisms to facilitate channelling grant resources from donors to Ukraine, with contributions of $145 million thus far. The World Bank Group is also working on options to assist neighbouring countries, including to support refugee populations, and will continue to provide trade finance to support the private sector. The World Bank Group also decided to disburse $200 million in additional financing to Ukraine’s social services amid military conflict in the country.
Ukraine’s partners have already pledged over $6 billion in financial aid in a move to support Ukraine’s economy and reform agenda amid a military conflict with Russia. Funds include loans and grants from the U.S., Canada, Japan, France, Sweden and other countries. Last month, the EU proposed a 1.2 billion euro financial aid package to Kyiv to mitigate the effects of the conflict with Moscow, of which 600 million euros had already been disbursed. Washington boosted its support by offering a sovereign loan guarantee of up to $1 billion to support Ukraine’s economic reform agenda.
Last week, the EU ambassadors agreed with the Council’s negotiating mandate on a proposal to amend the 2014-2020 home affairs funds and 2021-2027 asylum, migration, and integration fund. This amendment was put forward through a fast-track process that will provide extra resources for the reception of persons fleeing the war in Ukraine. This will enable member states to urgently use the remaining funds to help address the mass influx of persons fleeing the war and is expected to release around 420 million euros in additional support from unused funds. These funds will allow financing asylum and migration activities in member states during crises, including those arising from the invasion of Ukraine.