The Board of Directors of the World Bank has approved a new systemic project in Ukraine titled "Support for Recovery through Sound Fiscal Management" (SURGE), with an anticipated total volume of approximately $750 million for the years 2024-2027 at the approval stage.
"The reforms under this project aim to enhance the efficiency of public investment management and government finance. If necessary, the funding may be increased," commented Prime Minister Denys Shmyhal on his Telegram channel.
The Bank noted that the SURGE project was developed using the financial instrument "Results-Based Financing Program," which will support government initiatives aimed at advancing critical reforms, improving budget revenue administration processes, and creating a closer link between the transfers allocated to local authorities and their service delivery needs and program implementation.
Additionally, to assist the government in implementing the SURGE program, on November 4, 2024, the project "Strengthening Government Capacity to Implement Fiscal Reform" (STRONG) was approved, which will be financed through a $10 million grant to address public management skill gaps in Ukraine and provide the Ukrainian government with the technical assistance necessary for developing and introducing institutional reforms aligned with the SURGE project.
"As the country moves forward, it will be essential to develop its capacity for long-term growth, prepare for accession to the European Union, effectively manage public infrastructure projects and finances, as well as improve budget revenue administration," commented Bob Som, the World Bank's regional director for Eastern European countries, regarding the new project.
The World Bank clarified that the funding for the SURGE program consists of $450 million from the government-supported ADVANCE Ukraine targeted fund and a $300 million loan from the Special Program (SPUR) of the International Development Association (IDA) for the recovery of Ukraine and Moldova. The program includes outcome-oriented financing that can be increased depending on the availability of additional funds.
The Ministry of Finance of Ukraine noted that under the loan agreement with the World Bank, it plans to attract the allocated funds by the end of 2024. The signing of the relevant agreements is expected soon.