By Divya Chowdhury and Lisa Pauline Mattackal

DAVOS, Switzerland (Reuters) – The European Bank for Reconstruction and Development (EBRD) said it was preparing to raise additional funds for Ukraine’s reconstruction after the Russian invasion, after pledging to spend 1 billion euros in the country in 2022.

The European Union has estimated that the overall cost of damage to Ukraine from what Moscow calls a “special military operation” could be between 500 billion euros ($530 billion) and 600 billion euros. euros.

“(We) expect to get funding from donors, especially for reconstruction, because what we are doing now is a kind of emergency funding to support the (Ukrainian) economy,” said EBRD President , Odile Renaud-Basso, at the Reuters Global Markets Forum.

Donors understand that additional funding is needed, Renaud-Basso said Tuesday on the sidelines of the World Economic Forum in the Swiss alpine resort of Davos.

Political cartoons about world leaders

Renaud-Basso said it was also important that at least some of the funding Ukraine needs, which for infrastructure alone could total between $70 billion and $90 billion, be provided in the form of grants rather than lending, to avoid burdening the country with additional debt, she added.

The EBRD is also increasing investment in the agricultural sector of various countries, focusing on financing to import more cereals, developing storage and production capacities and improving access to fertilizers as the Ukrainian crisis hits the global food supplies, said Renaud-Basso.

“We launched a kind of action plan with other development banks last week on what we will each do in this area,” she said.

War, inflation, monetary policy tightening and food shortages increase the risks of a global recession, Renaud-Basso said, although EBRD forecasts do not point to such an event.

“It will depend on how long the war lasts and if solutions are found to the food crisis, overall it’s a pretty grim environment,” she said.

Renaud-Basso also said that the EBRD hopes to invest around 50% of its funds, around 5 to 6 billion euros per year, in green investments.

(This interview was conducted as part of the Reuters Global Markets Forum. Join GMF on Refinitiv Messenger: https://refini.tv/33uoFoQ)

(Reporting by Divya Chowdhury in Davos, Lisa Mattackal, Sanjana Shivdas and Nishara Karuvalli Pathikkal in Bengaluru; Editing by Alexander Smith)

Copyright 2022 Thomson Reuters.