The EU-Ukraine Gateway Trust Fund (or E-U GTF) will initially seek to raise €20 billion in contributions from Member States in the form of donations, /quote]
The European Investment Bank (EIB) is proposing to use a financing structure already used to support economies and households when the new coronavirus pandemic was raging to finance up to €100 billion for the post-war reconstruction of Ukraine, a document obtained by Reuters news agency reveals.
The EU-Ukraine Gateway Trust Fund (EU-Ukraine Gateway Trust Fund, or E-U GTF) will initially seek to raise €20 billion, contributions from member states in the form of donations, loans and guarantees. The guarantees in particular will have a multiplier effect, enabling more than €100 billion worth of infrastructure projects to be carried out, according to the EIB document. This amount is estimated to cover about half of Ukraine's immediate needs.
The EIB proposal is expected to be presented today, the first of two days of the international conference on the reconstruction of Ukraine in Lugano (southern Switzerland).
The EIB proposes to create a fund to be used as in the pandemic to guarantee financing for small and medium-sized enterprises. It plans to allocate €25 billion that will leverage a total of €200 million.
The E-U GTF will help rebuild bridges, restore water and sanitation services, especially in cities whose populations have been swollen by the displacement of Ukrainians following the Russian army's invasion on 24 February.
Other projects focus on facilitating Ukraine's exports, energy and digital infrastructure. The EIB and development banks, such as KfW and DFC, will be able to secure capital or guarantees from the fund for the investments they oversee.
The European Fund is also intended to encourage the private sector, which would probably consider financing investments in Ukraine too risky, to get involved.
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Using a pre-existing financing mechanism means it can work faster so that initial investments can be approved by the end of the year.
It will need approval from the European Commission and the European Council. Member countries will then decide whether and how much capital to allocate to the fund.
Source: APE-MPE
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