DAVOS, Switzerland (Reuters) – The European Bank for Reconstruction and Development (EBRD) said it is preparing to raise additional funds for the reconstruction of Ukraine after Russia’s invasion, after pledging to spend 1 billion euros in the country in 2022.
The European Union has estimated that the overall cost of the damage to Ukraine as a result of what Moscow calls a “special military operation” could stand at between 500 billion euros ($530 billion) and 600 billion euros.
“(We) expect to get donors funding in particular for the reconstruction as what we are doing now is sort of emergency financing to support the (Ukrainian) economy,” EBRD President Odile Renaud-Basso told the Reuters Global Markets Forum.
Donors understand additional funding is required, Renaud-Basso said on Tuesday on the sidelines of the World Economic Forum in the Swiss Alpine resort of Davos.
Renaud-Basso said it is also important that at least a portion of the funding Ukraine requires, which for infrastructure alone could total between $70 billion and $90 billion, is given via grants rather than loans, to avoid burdening the country with additional debt, she added.
The EBRD is also increasing investment in the agricultural sector in various countries, focusing on financing to import more grain, developing storage and production capacity, and increasing access to fertilizers as the Ukraine crisis hits global food supplies, Renaud-Basso said.
“We have launched a sort of action plan with other development banks last week on what we will each do in this area,” she said.
The war, inflation, monetary policy tightening and food shortages increase the chance of global recession, Renaud-Basso said, although EBRD forecasts do not point to such an event.
“It will depend on how long the war is and whether solutions are found for the food crisis, overall it’s quite a gloomy environment,” she said.
Renaud-Basso also said the EBRD hopes to invest around 50% of its funds, around 5 billion to 6 billion euros per year, into green investments.
(This interview was conducted in the Reuters Global Markets Forum. Join GMF on Refinitiv Messenger: https://refini.tv/33uoFoQ)
(Reporting by Divya Chowdhury in Davos, Lisa Mattackal, Sanjana Shivdas and Nishara Karuvalli Pathikkal in Bengaluru; Editing by Alexander Smith)