The World Bank’s executive board has approved the establishment of a Financial Intermediary Fund (FIF) to support Ukraine, with contributions expected from the United States, Canada, and Japan, according to sources familiar with the decision. This new fund, which will be administered by the World Bank, aims to bolster Ukraine’s economic stability by tapping into up to $50 billion in pledged funding from Group of Seven (G7) countries. The United States, Japan, and Canada are expected to be the primary contributors to the fund, although the exact amounts are still being finalized.
The FIF will be partly backed by interest generated from frozen Russian sovereign assets, seized by Western nations following Russia’s invasion of Ukraine in February 2022. While Russia objected to the World Bank’s vote, all other board members were in favor of creating the fund. This marks a significant step in international efforts to support Ukraine as it faces ongoing economic and infrastructural challenges due to the war.
World Bank President Ajay Banga expressed openness earlier this year to managing such a fund, citing the bank’s experience in overseeing non-military donor funds, such as those set up for Afghanistan. He emphasized that this fund could be a vital tool for Ukraine’s recovery, especially since it will not be used for military purposes but to stabilize the nation’s economy and infrastructure.
In addition to the World Bank’s vote, the European Union has also committed to providing Ukraine with up to €35 billion as part of its share in the larger G7-backed loan, which will be serviced by profits generated from immobilized Russian central bank assets in the West. The FIF will allow non-European countries to contribute to the loan, ensuring broader global participation in Ukraine’s recovery.
The G7 and EU initially announced the $50 billion loan in June 2024, signaling a unified approach to supporting Ukraine in its fight for sovereignty and economic recovery. With this new fund in place, the international community aims to ensure that Ukraine receives the financial aid necessary to withstand the long-term impacts of the war.
