A $2 billion IFC program designed to ramp up support for Ukraine’s private sector and boost economic resilience amid Russia’s invasion of Ukraine is receiving new financial support from the Netherlands and Switzerland, IFC has said.
“The Netherlands will be providing $43 million to support Ukraine’s agricultural sector and ensure emergency liquidity for private companies in critical agri-related industries. Switzerland will provide $11 million to support Ukraine’s small-scale farmers,” IFC said in the press release.
IFC said that Ukraine’s private sector generated up to 70% of gross domestic product before Russia’s invasion and provided crucial jobs, goods, and services. In spite of one in five micro and smaller business closing (as of mid-April 2022), the sector continues maintaining strategic exports and providing taxes.
The private sector will also have a crucial role to play in the country’s reconstruction efforts, estimated at $411 billion as of February 2023 – far more than government and donors can muster alone, the corporation said.
“A strong private sector is essential to help Ukraine’s economy recover and support reconstruction efforts. We welcome the contributions made by the Netherlands and Switzerland and their strong support for Ukraine. Ukraine’s economy remains on life support, and we will continue working with other development partners to provide the guarantees and grants the private sector needs,” IFC’s Managing Director Makhtar Diop said in the press release.
IFC recalled that IFC’s $2 billion Economic Resilience Action (ERA) response package includes finance from IFC’s own account working alongside guarantees and concessional finance (or grants) from donor governments. It complements efforts IFC has made with its own capital to support the private sector in Ukraine without donor support. As of April 2023, IFC’s outstanding portfolio was nearly $300 million to private companies and financial institutions in Ukraine.
IFC expects to be able to leverage these donor funds from the Netherlands and Switzerland between 3-4 times, meaning these contributions can potentially support over $200 million of financing.
