The European Commission and International Finance Corporation (IFC) have signed a guarantee agreement to support private sector investments in Ukraine.

Under the new agreement, the EU will provide up to €90m in financial guarantees to the IFC – a World Bank Group member – to support investments in Ukraine. According to the Commission, the move will help Ukraine, in turn, attract more than €500m to rebuild its economy and infrastructure, which have suffered a massive blow following Russia’s invasion in February 2022.

“Support from the European Commission has been and will continue to be instrumental in our efforts to extend and scale up crucial investments in Ukraine,” said Alfonso Garcia Mora, IFC vice-president for Europe, Latin America and the Caribbean. “With the EFSD+ guarantee, we are moving fast to implement innovative and impactful projects and back private sector companies, fulfilling our commitment to mobilise private capital to support Ukraine’s economy and reconstruction.”

Over the past few months, government officials in Kyiv have been grappling with lower levels of support from European and US allies as the war with Russia enters its third year.

Last week, on Thursday, the EU approved €50bn in aid to Ukraine after Hungary’s Prime Minister Viktor Orban ceased his resistance towards the support package, which will come from the EU budget. EU Commission President Ursula von der Leyen welcomed the overcoming of the impasse, noting that “today, Europe got stronger”.

“We all know that Ukraine is fighting for us. So we will support them with the necessary funding and provide them with the much-needed predictability they deserve,” she added.

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The €50bn proposal will provide Kyiv with financial support between 2024 and 2027.

Despite this, however, support across the ocean continues to stall as US officials in Washington struggle to reach a consensus over a Congress bill that links support for Ukraine to tighter border controls in the south.

On Sunday, the US Senate unveiled a $118bn bipartisan deal to tackle migration, as well as aid for Israel and Ukraine. Around $60bn would go to Ukraine, if the bill passes both Congress chambers, but there is no clear evidence of how the vote will play out in either of them.