New Ukraine fund approved by World Bank with money from Canada, U.S.: report – National | Globalnews.ca

The World Bank’s executive board on Thursday approved the creation of a financial intermediary fund (FIF) to support Ukraine, with contributions expected from the United States, Canada and Japan, three sources familiar with the decision said.

The only objection to the vote came from Russia, two of the sources familiar with the vote said.

The fund, to be administered by the World Bank, will help fulfill a pledge by Group of Seven countries to provide Ukraine with up to $50 billion in additional funding by the end of the year, the sources said.

Exact amounts to be contributed by the U.S., Japan and Canada are still being worked out, but will be backed by interest from frozen Russian sovereign assets, one of the sources said.

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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 backed by the earnings from frozen Russian sovereign assets – at least for non-military purposes.

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The assets were frozen shortly after Russia launched a full-scale invasion of Ukraine in February 2022.

Banga in May said 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 vote came a day after European Union 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, also backed by proceeds from the frozen Russian central bank assets, a statement from the Council of the EU said.

The new fund will allow non-European countries to participate in the broader loan.

The G7 and European Union announced in June they would provide a $50 billion loan to help Ukraine, serviced by profits generated by Russian assets immobilized in the West.

—Reporting by Andrea Shalal; editing by David Ljunggren and Leslie Adler