The World Bank's Board of Executive Directors has approved a loan of $1.05 billion to support development policy in Ukraine, utilizing funds from the International Bank for Reconstruction and Development (IBRD) through the Targeted Fund for Providing Essential Credit Support to Ukraine (ADVANCE Ukraine), which is backed by Japan and the United Kingdom.
According to the bank's announcement on Wednesday evening, the loan is co-financed by a $1 billion grant from the Financial Intermediary Fund for Supporting Resource Mobilization for Investment in Strengthening Ukraine (F.O.R.T.I.S. Ukraine FIF), into which the United States recently deposited $20 billion from frozen Russian assets.
"The purpose of the loan is to assist the Ukrainian government in implementing reforms that will enhance the country's economic potential and improve macro-financial stability," the release states.
It is noted that this initiative will support efforts aimed at increasing Ukraine's gross domestic product (GDP) per capita to bring it closer to the EU level and strengthen the country's economic independence.
The World Bank reminds that the first such operation under the program was approved in March 2024.
The current second operation consists of two main components. The first component focuses on supporting measures aimed at enhancing Ukraine's growth potential and concentrates on policy initiatives designed to expand competitive opportunities in the railway transport market and improve governance in this area. It also aims to refine the state's involvement in the banking sector, promote the production and use of renewable energy sources, increase credit inflows to the agricultural sector, and enhance the skills of Ukrainian customs officials.
The second component is intended to support policy measures aimed at creating a macro-financial policy conducive to economic growth. This includes measures aimed at increasing budget revenues, particularly by aligning fuel excise tax rates with EU standards and conducting a comprehensive assessment of agricultural land. Additionally, initiatives are aimed at improving procurement transparency through the updating of procurement legislation.