$2B in loans to help Ukraine’s ag, fuel import businesses

Dec 15, 2022, 9:32 PM | Updated: Dec 16, 2022, 11:36 am
Ukrainian State Emergency Service firefighters work to extinguish a fire at the building which was ...

Ukrainian State Emergency Service firefighters work to extinguish a fire at the building which was destroyed by a Russian attack in Kryvyi Rih, Ukraine, Friday, Dec. 16, 2022. Russian forces launched at least 60 missiles across Ukraine on Friday, officials said, reporting explosions in at least four cities, including Kyiv. At least two people were killed by a strike on a residential building in central Ukraine, where a hunt was on for survivors. (AP Photo/Evgeniy Maloletka)

(AP Photo/Evgeniy Maloletka)

WASHINGTON (AP) — Private businesses in Ukraine are in line to receive $2 billion in financing arranged by the International Finance Corp. to help rebuild the country’s agriculture and fuel import industries and other ventures, which have faced extensive losses because of the war.

The IFC, a member of the World Bank Group, provides private sector financing to developing countries. The loans differ from the billions that Ukraine has received in grants and other forms of no-strings-attached aid from donor nations, as they must be paid back.

Since Russia invaded in February, at least 5 million jobs have been lost, according to Ukraine’s Ministry of Economy. The National Bank of Ukraine estimates that 11% of businesses had closed as of September and more than half were operating below capacity.

Loans to the country’s private sector will become more important in coming years as Ukraine’s finance ministry copes with a widening budget deficit. In addition, grants and other foreign aid are not guaranteed, and Republicans in the U.S. Congress have signaled uncertain support for Ukraine when they take control of the House in January.

Getting private financing is difficult for countries facing war, floods and other calamities.

“You’re looking at a level of risk that is just astounding,” said Kenneth Rogoff, a Harvard University economist. Even before the war in Ukraine, corruption was rampant and Ukraine had difficulty getting investment.

With a war raging, Rogoff said, “how do you make a loan with any kind of investment knowing you may not be paid back.” He said that, for now, lenders “can make a loan for humanitarian reasons or we need to give them money.”

Ukrainian agribusiness expert Alex Lissitsa told the Ukrainian Weekly, an English-language news organization headquartered in the U.S, that some of the biggest threats to Ukrainian agriculture are related to financing. “We have problems with liquidity, because we have problems with logistics in Ukraine,” he said last week.

Still, private aid will likely remain important for the rebuilding of the country, according to the ” Blueprint for the Reconstruction of Ukraine,” written by a group of prominent economists studying the impacts of the war, including Rogoff, Torbjörn Becker, Yuriy Gorodnichenko and Tymofiy Mylovanov.

Mylovanov, president of the Kyiv School of Economics, told The Associated Press that “at some point debt sustainability will be an issue.”

Ukraine’s projected real GDP is expected to decline by 35%, due in large part to the Russian invasion, according to IMF data. And Ukraine’s finance minister told the AP this month that the damage caused by Russian missile attacks on civilian infrastructure would cost 0.5% of annual economic output next year, adding to the burden as Ukraine tries to cover a budget deficit equivalent to $38 billion.

The $2 billion IFC package includes up to $1 billion from its own account, with additional financing contingent on guarantees from donor governments.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Eight Croatian nationals charged with attempting to traffic children, outside the magistrates court...
Associated Press

8 Croatians in Zambia face new charges of child trafficking

LUSAKA, Zambia (AP) — Eight Croatians rearrested in Zambia will face new charges of child trafficking and are expected to appear in court on Thursday, a Zambian official announced. Earlier this week a court dropped child trafficking charges against the eight — four couples — and ordered them to leave the country within 48 hours. […]
1 day ago
Associated Press

Belarus hands 8-year term to journalist for top Polish paper

TALLINN, Estonia (AP) — A Belarusian court on Wednesday sentenced a journalist and prominent member of the country’s sizable Polish minority to eight years in prison, amid an ongoing crackdown on critics of authoritarian President Alexander Lukashenko’s regime. Andrzej Poczobut, 49, was found guilty of harming Belarus’ national security and “inciting discord” in a closed […]
1 day ago
Associated Press

Belgian police seize $1.6 million in sex trafficking probe

BRUSSELS (AP) — About 1.5 million euros ($1.6 million) in cash were seized during raids in Belgium targeting an alleged criminal organization suspected of sending Chinese women to Europe and forcing them into prostitution, the federal prosecutor’s office said Wednesday. In addition, investigators took hold of four tons of coins with an unspecified value, prosecutors […]
1 day ago
Associated Press

Blaze at US drone plant in Latvia; arson not suspected

HELSINKI (AP) — Firefighters worked for a second day Wednesday to fully extinguish a blaze at a U.S. company’s drone plant in Latvia. Local police said nothing had been found so far to indicate sabotage. Latvia’s State Fire and Rescue Service was alerted Tuesday afternoon that a fire had broken out at Edge Autonomy’s drone […]
1 day ago
FILE - People walk past a Microsoft office in New York on Nov. 10, 2016.  (AP Photo/Swayne B. Hall,...
Associated Press

UK watchdog says Microsoft’s Activision deal hurts gamers

LONDON (AP) — Microsoft’s stalled $68.7 billion deal to buy video game company Activision Blizzard has hit a fresh hurdle in the United Kingdom, where the antitrust watchdog said Wednesday that it will stifle competition and hurt gamers. Britain’s Competition and Markets Authority said its in-depth investigation found that the deal could strengthen Microsoft’s position […]
1 day ago
People walk past St. John's Baptistery, one of the oldest churches in Florence, central Italy, Tues...
Associated Press

Visitors can see Florence Baptistry mosaics up close

FLORENCE, Italy (AP) — Visitors to one of Florence’s most iconic monuments — the Baptistry of San Giovanni, opposite the city’s Duomo — are getting a once-in-a-lifetime chance to see its ceiling mosaics up close thanks to an innovative approach to a planned restoration effort. Rather than limit the public’s access during the six-year cleaning […]
1 day ago

Sponsored Articles

safety from crime...

As crime increases, our safety measures must too

It's easy to be accused of fearmongering regarding crime, but Seattle residents might have good reason to be concerned for their safety.
Comcast Ready for Business Fund...
Ilona Lohrey | President and CEO, GSBA

GSBA is closing the disparity gap with Ready for Business Fund

GSBA, Comcast, and other partners are working to address disparities in access to financial resources with the Ready for Business fund.
SHIBA WA...

Medicare open enrollment is here and SHIBA can help!

The SHIBA program – part of the Office of the Insurance Commissioner – is ready to help with your Medicare open enrollment decisions.
Lake Washington Windows...

Choosing Best Windows for Your Home

Lake Washington Windows and Doors is a local window dealer offering the exclusive Leak Armor installation.
Anacortes Christmas Tree...

Come one, come all! Food, Drink, and Coastal Christmas – Anacortes has it all!

Come celebrate Anacortes’ 11th annual Bier on the Pier! Bier on the Pier takes place on October 7th and 8th and features local ciders, food trucks and live music - not to mention the beautiful views of the Guemes Channel and backdrop of downtown Anacortes.
Swedish Cyberknife Treatment...

The revolutionary treatment of Swedish CyberKnife provides better quality of life for majority of patients

There are a wide variety of treatments options available for men with prostate cancer. One of the most technologically advanced treatment options in the Pacific Northwest is Stereotactic Body Radiation Therapy using the CyberKnife platform at Swedish Medical Center.
$2B in loans to help Ukraine’s ag, fuel import businesses