The World Bank’s executive board on Thursday approved the creation of a financial intermediary fund (FIF) to support Ukraine.
Who Will Contribute To The Fund?
Canada, Japan and the United States, Canada and Japan are expected to contribute to the fund, according to sources
familiar with the decision.
Russia was the only country that raised an objection to the vote, sources familiar with the vote said.
The fund will help fulfill a pledge by Group of Seven countries to provide Ukraine with up to $50 billion in additional funding by year end.
Who Will Administer The Fund?
The World Bank will administer the fund.
Exact amounts to be contributed by the U.S., Japan and Canada are still being worked out.
Interest From Frozen Russian Sovereign Assets
The Fund will be backed by interest from frozen Russian sovereign assets, one of the sources said.
World Bank President Ajay Banga told Reuters in May that he was “absolutely” open to the idea of managing a G7 loan fund for Ukraine.
Banga had said that he was in favour of the fund being backed by earnings from frozen Russian sovereign assets – at least for non-military purposes.
When Were The Assets Frozen?
The assets were frozen shortly after Russia launched a full-scale invasion of Ukraine in February 2022.
In May, Banga said that the World Bank had ample experience in managing similar non-military donor fund facilities, including one for Afghanistan.
It could replicate that work for a Ukraine loan, he said.
The World Bank voted a day after EU envoys agreed to give Ukraine up to 35 billion euros as part of the bloc’s share in a larger planned loan from the G7 nations.
This is also backed by proceeds from the frozen Russian central bank assets, according to a statement from the Council of the EU.
Participation Of Non European Nations
The new fund will allow non-European countries to participate in the broader loan.
The G7 and EU announced in June they would provide a $50 billion loan to help Ukraine.
This would be serviced by profits from Russian assets that were immobilized in the West.
(With inputs from Reuters)
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