Sunak pledges £2.35bn in loan guarantees to rebuild Ukraine

British Prime Minister says he is 'proud' of the 'multiyear commitment to support Ukraine’s economy'

UK Prime Minister Rishi Sunak shakes hands with Ukrainian President Volodymyr Zelenskyy during a meeting in Kyiv. AP

Prime Minister Rishi Sunak has announced $3 billion (£2.35 billion) in bank loan guarantees to bolster the rebuilding of Ukraine, as he pledged to stand with the country for “as long as it takes”.

Mr Sunak will open a major conference in London focused on Ukraine’s recovery from Russia’s invasion, hailing Kyiv's “defiance” as Ukrainian President Volodymyr Zelenskyy’s troops use a counter-offensive to push back Moscow’s forces.

The financial package includes World Bank loan guarantees worth $3 billion over three years.

Downing Street said the guarantees amount to the first bilateral package of multiyear fiscal assistance to be set out by a G7 country.

The funding is expected to support public services, including the cost of running schools and hospitals.

To mark the two-day summit, hundreds of companies, including British venture Virgin and US bank Citi, have signed up to back Ukraine’s recovery and reconstruction.

In pre-briefed comments, Mr Sunak will tell the Ukraine Recovery Conference: “As we’ve seen in Bakhmut and Mariupol, what Russia cannot take it will seek to destroy. They want to do the same to Ukraine’s economy.

“The scale of the challenge is real. The war brought a 29 per cent fall in Ukraine’s GDP [gross domestic product] last year, but just look at the streets of Kyiv – despite the threat of attack, people are getting on with their lives and getting on with business.

“President Zelenskyy’s government is determined to drive reforms to become more open, more transparent and ready for investment.

“This is a vibrant, dynamic, creative, European country that refuses to be subdued.

“So, together with our allies, we will maintain our support for Ukraine’s defence and for the counter-offensive, and we’ll stand with Ukraine for as long as it takes as they continue to win this war.”

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Ajay Banga, president of the World Bank, said: “The UK government’s generous guarantees to the World Bank Group will support the people of Ukraine at a critical moment.

“The World Bank Group is designed to do hard things like helping people rebuild their lives after devastation. With this support, we will keep delivering on that mission and help Ukrainians imagine a life after the war.”

On top of the loan guarantees, Mr Sunak will also announce a commitment of up to £250 million of new capital for British International Investment, the UK’s development finance institution.

No 10 said the money will support private sector investment in major infrastructure projects, energy markets, financial services and agriculture across Ukraine.

World businesses are also involved in recovery efforts, with more than 400 companies from 38 countries, with a combined annual revenue said to be more than $1.6 trillion (£1.25 trillion), pledging to back Ukraine’s rebuild as part of the summit.

Major conglomerates, international corporations and retail chains are among those who have signed up to the Ukraine Business Compact, with Virgin, Sanofi, Philips, Hyundai Engineering and Citi among those involved.

The Prime Minister will also use the summit to announce the London Conference Framework for War Risk Insurance, which is set to receive G7 backing.

As part of its plan to deliver on the framework, the UK is releasing up to £20 million of funding for the Multilateral Investment Guarantees Agency to provide guarantees and insurance for reconstruction projects while the conflict is still going on.

Britain’s funding efforts are in addition to a £240 million boost in UK aid for Ukraine this year, No 10 said.

Addressing the conference, Mr Sunak is expected to add: “We’ll stand with Ukraine as they win the peace and harness all their ingenuity and defiance to build the future they deserve.

“The question for us today is what can we do to support this – to fast-track recovery and help Ukraine unleash its potential?

“We must bring to bear a partnership of governments, international financial institutions and business leaders, all of us here today, to make this happen.

“The British government will continue to play its full part.”

Mr Zelenskyy is scheduled to address the conference via video link on Tuesday, while Ukraine’s Prime Minister Denys Shmyhal will give the keynote speech.