World Bank approves $1.5B loan to Ukraine under Japanese and UK guarantees

On Tuesday, the World Bank's Board of Directors approved a $1.5 billion Growth Foundations Development Policy Loan (DPL) for Ukraine to support its development policy.

This is said in an official statement by the Cabinet of Ministers of Ukraine, according to Ukrinform.

"The funds will be provided under the guarantee of the Government of Japan through the World Bank Trust Fund (ADVANCE Ukraine) in the amount of $984 million, as well as under the guarantee of the United Kingdom in the amount of $516 million," the statement says.

At the same time, in order to reduce the cost of servicing Ukraine's credit obligations under the DPL2024 loan in the coming years, the DPL loan agreement provides for the capitalization of interest in the amount of $99.54 million from Japanese funds.

As reported, the DPL project aims to support reforms in Ukraine, and the funds will be credited to the state budget's general fund in a single tranche based on the results of tasks completed before the agreement was signed. The reforms include improving corporate governance, promoting renewable energy and introducing agricultural bonds, a new instrument for financing farmers. In addition, the reforms aim to strengthen the financial sector by improving access to finance for businesses, transposing EU customs and tax practices into Ukrainian legislation, and improving fiscal policy and capital market regulation. Separate measures are envisaged to ensure transparency and accountability of procuring entities in the e-procurement system.

As Ukrinform reported, Ukraine may receive about $9 billion in aid from foreign partners in the near future.

Photo: minfin.com.ua