World Bank president ready to manage G7 loan to Ukraine

World Bank President Ajay Banga has said that he is "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.

Banga told this to Reuters, Ukrinform reports.

Banga, attending a meeting of Group of Seven finance ministers who are hashing out the concept of such a loan, said the World Bank has 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.

Banga said he is not a party to the loan negotiations, nor had he been approached by U.S. Treasury Secretary Janet Yellen or other G7 finance ministers. "All I know is that if they do decide to give it to us, would I be ready? Yeah," Banga said. "I could manage a fund of that type. I would need safeguards, I would need to make sure our people understand how to use it."

The World Bank also has made extensive assessments of Ukraine's war damage, estimating in February that the country would need $486 billion to rebuild its infrastructure, housing and economy once the war ends, nearly three times its annual economic output.

Banga said that the number likely has increased with more recent missile attacks by Russia, but declined to make a new estimate of the damage.

"So what I'm trying to do in the meanwhile is work with the Ukrainian government on reforms that will make it easier for the private sector to invest when there is peace and stability. Banga said.

It will be very difficult for Ukraine to attract enough private investment to rebuild "if you don't do the prep work in advance," Banga said.

Reuters reported last week that U.S. Treasury Secretary Janet Yellen would push fellow G7 finance officials to agree to a plan to bring forward the interest earnings on frozen Russian assets to provide more money to Ukraine quickly.

The official said the G7 was "making progress" toward consensus on a plan to harness some $300 billion in Russian sovereign assets frozen since Moscow's February 2022 invasion of Ukraine.

The U.S. proposed a plan to pull forward the interest on the assets to back a bond or a loan that would provide Ukraine perhaps $50 billion in the near term.

On May 24-25, a meeting of finance ministers of the G7 countries is taking place in Italy. Ukrainian Finance Minister Sergii Marchenko will join the ministers on Saturday.

Photo: Bloomberg