World Bank approves $750 mln loan for Ukraine: How funds will be used
Photo: World Bank approves $750 mln loan for Ukraine (Getty Images)
The World Bank has approved a new systemic project in Ukraine called "Supporting Reconstruction through Smart Fiscal Governance" (SURGE). The total project budget is approximately $750 million for 2024-2027, informs the Ministry of Finance press service.
The funding will consist of a $450 million loan from the International Bank for Reconstruction and Development (IBRD) from the Advancing Needed Credit Enhancement for Ukraine Trust Fund (ADVANCE Ukraine), which is supported by the Japanese government, as well as a $300 million loan from the Special Program for Ukraine and Moldova Recovery (SPUR) of the World Bank’s Crisis Fund.
Under the IBRD loan agreement, Ukraine expects to receive the allocated funds by the end of 2024.
The Ministry of Finance noted that the relevant international agreements with the World Bank are expected to be signed soon.
How the funds will be used
The project aims to establish the necessary environment and institutional framework for the effective and accountable implementation and financing of climate-smart recovery.
According to the Ministry of Finance, the implementation of SURGE will use a "Program-for-Results" financial instrument. This instrument allocates loan amounts to the Ukrainian state budget's general fund based on the achievement of specific indicators verified as outlined in the international agreement.
The Ministry added that the project is intended to support the Ukrainian government's efforts to build an effective public investment management system for post-war recovery and reconstruction, improve local fiscal management, enhance medium-term and program budgeting at the local level, and improve revenue administration.
Earlier, the National Bank of Ukraine raised its forecast for international assistance to Ukraine, expecting total international financing to reach $41.5 billion this year and $38.4 billion next year.
