World Bank's IFC has mobilised nearly $1 bln for Ukraine - managing director

Scatec ASA

11/01/2024 13:44

By Victoria Waldersee and Karin Strohecker
       Jan 11 (Reuters) - The World Bank's private investment
arm has mobilised nearly $1 billion to rebuild Ukraine's private
sector and is shifting its broader investment focus towards
equity, its managing director told Reuters. 
    Around $620 million of the funds mobilised for Ukraine -
part of a $2 billion package announced in December 2022 - are
from the investment arm's own balance sheet and another $360
million from external financing, said Makhtar Diop, managing
director of the International Finance Corp (IFC). 
    But the path ahead is not without its challenges. 
    "First of all we need to continue to monitor how the
political situation evolves and there are some concerns," said
Diop, speaking ahead of the World Economic Forum in Davos.
    "We will need to continue mobilising more resources to
guarantee a little bit some of the investments that we're doing
because we take a lot of investment on our own balance sheet,"
he said, adding that the IFC was more exposed to Ukraine than
other development agencies.
    Kyiv views mobilising reconstruction funds - estimated at
$400 billion - more urgently than ever as signs of donor fatigue
are emerging from Europe and the United States.
    Providing guarantees to give external investors confidence
to deploy resources was the "main challenge" facing the IFC in
mobilising further funds for its support package, Diop said.  
    The corporation had so far funded guarantees worth $304
million in the agricultural sector with the support of the World
Bank's Multilateral Investment Guarantee Agency  for critical
grain imports and exports, and pre-assembled solar panels and
battery storage in partnership with Norwegian energy provider
Scatec. 
    It is also considering investing in offshore wind capacity
and distribution generation, but plans are not finalised. 
    Conflicts elsewhere are on the IFC's radar as it assesses
with the World Bank Group how best to help rebuild Palestinian
territories after violence de-escalates, Diop said.
    "We need to be prepared...one way or another, there will be
an after," said Diop, adding that specific plans were being
discussed but declining to give further details.
    Speaking about the IFC's wider investment focus, Diob said
he planned to ramp up equity investments, with African equity
markets - often lacking depth - one area of focus. 
    "We'll be doing more and more equity, particularly in the
productive sector," he said, declining to give further detail of
what share of the IFC's portfolio should be geared towards that.
    In its 2023 annual report, loans made up 71% of portfolio
exposure, while equity accounted for 21% with the remainder made
up of guarantees and other products. 

 (Reporting by Victoria Waldersee in Berlin, Karin Strohecker in
London; Editing by Kirsten Donovan)
 ((Victoria.Waldersee@thomsonreuters.com;))