TEMPO.CO, Jakarta – The European Investment Bank (EIB) as the EU lending body, proposes a funding structure to help rebuild Ukraine with a capital of up to 100 billion euros or around Rp. 1.5 quadrillion. The financing was previously used in the midst of the Corona pandemic.
According to Reuters quoted on Monday, July 4, 2022, the EU-Ukraine Gateway Trust Fund, or EU GTF, will seek to secure an initial contribution of 20 billion euros from European Union countries. This budget is in the form of grants, loans and guarantees.
The document states that guarantees, in particular, will have a multiplier effect for about half of Ukraine’s more pressing needs. The 100 billion euro package will be prioritized as an infrastructure project.
The EIB proposal will be announced on Monday, the first day of the International Conference on the Recovery of Ukraine in Switzerland. The meeting aims to provide Ukraine with resources and assist its post-war recovery.
The EIB proposes a fund that will work as used in the COVID-19 pandemic to guarantee financing for small and medium-sized companies. The fund allowed 25 billion euros leading to a total of 200 billion euros raised.
The EU GTF can contribute to rebuilding bridges or renovating water or wastewater services, especially for cities whose populations have grown due to migration from other parts of Ukraine since Russia’s February 24 invasion of the country.
Projects can also focus on facilitating Ukrainian exports or on energy and its digital infrastructure. The EIB or a development bank such as KfW or DFC will be able to withdraw their funds or guarantees for supervised investments.
The fund is also designed to encourage private businesses that are likely to see financing investments in Ukraine too risky. Using instruments similar to those used previously means it allows funding to be applied more quickly, so initial investments may be approved at the end of the year. This step is also expected to trigger other parties to contribute and can be easily improved.
The European Commission must first give its approval, with a majority of countries European Union must then approve the plan. EU countries will then decide whether to contribute to the fund.
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REUTERS
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