Ukraine secures another $5b in funding after meetings, says PM Shmyhal

WASHINGTON - Ukraine secured promises of US$5 billion (S$6.6 billion) in additional funding to support its ongoing fight against Russia, amid “fruitful meetings” in Washington last week, Ukrainian Prime Minister Denys Shmyhal told reporters on Friday.

Mr Shmyhal met representatives of the International Monetary Fund (IMF), World Bank and European Investment Bank as well as top US officials, on the sidelines of the spring meetings of the IMF and World Bank.

He said Ukraine received new pledges of additional support from Switzerland, Denmark and a number of other countries during the meetings, as well as an agreement from US aircraft-maker Boeing to relieve Ukrainian companies of US$200 million in previous commitments. Kyiv expects to receive more support during an upcoming conference in London, he added.

“The international partners have reassured us of their long-term support,” Mr Shmyhal said, describing his meetings in Washington and referring to total financing of US$115 billion over the next four years that was leveraged by the IMF’s approval in March of a US$15.6 billion loan.

Ukraine needs about US$14 billion in funding in 2023 to close a budget gap, Mr Shmyhal said, noting that the United States would provide US$2.3 billion to plug the hole, while the European Union would provide €1 billion (S$1.4 billion).

In addition to Switzerland and Denmark, he said Spain, Ireland, Japan, Latvia, Lithuania, Iceland and the Netherlands also promised more aid.

US Treasury Secretary Janet Yellen, who paid a surprise visit to Kyiv in February and met Mr Shmyhal again on Thursday, repeatedly urged finance ministers and central banks to maintain support for Ukraine, the Treasury Department said.

Ms Yellen on Thursday said she told Mr Shmyhal the US had provided significant economic support to Ukraine since the start of the war in February 2022 and would deliver more in coming months, on top of security and humanitarian aid.

‘On life support’

Mr Shmyhal said Ukrainian officials met with a number of US Cabinet secretaries in addition to Ms Yellen, including Defence Secretary Lloyd Austin and US Commerce Secretary Gina Raimondo, with a big focus on laying the groundwork for Ukraine’s recovery and attracting foreign investment.

He said the discussions also touched on Ukraine’s insistence that the US and other allies confiscate Russian assets to help cover the cost of rebuilding Ukraine – a sum put at US$411 billion by the World Bank in a recent estimate.

He urged the Group of Seven advanced economies to reaffirm their support for Ukraine and discuss the confiscation issue during an upcoming leaders’ summit in Japan, which is leading the G-7 in 2023.

The Netherlands and Switzerland also pledged support for the International Finance Corporation’s US$2 billion Economic Resilience Action programme that is designed to ramp up support for Ukraine’s private sector and boost economic resilience amid the war.

The IFC programme aims to leverage these donor funds using private sector investments, which will be needed to help cover the staggering cost of Ukraine’s recovery.

“A strong private sector is essential to help Ukraine’s economy recover and support reconstruction efforts,” said Mr Makhtar Diop, the IFC’s managing director. “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.”

The World Bank also announced US$200 million in grant financing for a project to Ukraine’s energy infrastructure, with some US$300 million in additional funding envisaged to come from partners through grants and other contributions. REUTERS