The World Bank will provide Ukraine with a loan of $750 million: what will the funds be used for?
8 November 09:22
The World Bank’s Board of Directors has approved a new systemic project in Ukraine, Supporting Recovery through Reasonable Fiscal Governance (SURGE). The planned total volume of the project is about USD 750 million for 2024-2027. This was reported by Komersant ukrainskyi with reference to the press service of the Ministry of Finance.
The financing will consist of a $450 million loan from the International Bank for Reconstruction and Development (IBRD) from the Trust Fund for Necessary Credit Support to Ukraine (ADVANCE Ukraine), supported by the Government of Japan, as well as a $300 million loan from the Special Program for Ukraine and Moldova (SPUR) of the Bank’s Crisis Fund.
The financing will be provided through the Program-for-results instrument, which provides for the disbursement of funds based on the achievement of certain indicators.
Thus, the loans will be transferred to the state budget of Ukraine after verification of the fulfillment of the targets set forth in international agreements.
The goal of the Project is to create the necessary environment and institutional framework for the effective and accountable implementation and financing of climate-responsive recovery.
As part of the IBRD loan agreement, Ukraine expects to attract the funds provided by the end of 2024.
The relevant international agreements with the World Bank are expected to be signed in the near future, the Ministry of Finance said.
What the funds will be used for
The main tasks of SURGE include:
- Rebuilding infrastructure – creating and maintaining an effective public investment management system for rapid recovery in the post-war period.
- Improvingfiscal management – improving revenue administration and the budget process at the local level, including medium-term and program budgeting.
- Support for institutional reforms – through the STRONG investment project, which received a $10 million grant from the URTF to strengthen the government’s capacity to implement fiscal reforms.
