Ukraine’s state budget has received a $230 million loan from the Japanese government under the World Bank’s Emergency Project for Inclusive Support for the Recovery of Agriculture in Ukraine (ARISE), the Finance Ministry said on Friday evening.
“In the conditions of war, agriculture suffers significant losses, which, in turn, jeopardizes food security not only in Ukraine but also around the world. Raising funds under ARISE is an important contribution to providing access to financing for the agricultural business of Ukraine,” Finance Minister Sergii Marchenko said in a release.
It is specified that the funds were raised from the Trust Fund for the Promotion of the Necessary Expansion of Credit for Ukraine (ADVANCE Ukraine).
The Ministry of Finance recalled that the ARISE project aims to support farmers’ access to finance through concessional lending (compensation for costs under the 5-7-9 program) and improve small farms’ access to finance through grants.
The amount of project funding is currently $550 million, of which $500 million will be used to finance the state program “Affordable Loans 5-7-9%” in 2023-2024 with a focus on agricultural enterprises, and almost $50 million is provided for grants for small farmers.
As reported, on March 20, Ukraine received the first tranche of EUR4.5 billion from the EU under the Ukraine Facility program and $1.5 billion from Canada, while before that, all external revenues amounted to only $1.2 billion since the beginning of the year. In addition, on Friday night, the IMF Board of Directors approved the disbursement of the fourth tranche of the EFF Extended Fund Facility program to Ukraine, which should arrive in two to three days.
According to the National Bank, Ukraine may receive external financing worth $10 billion or even more from mid-March to the end of April, against the $37.3 billion required in the state budget for the entire year.
Ukraine has received $760 million in grant funds from Japan and Norway, Ukrainian Prime Minister Denys Shmyhal has announced.
“The funds were received through the World Bank’s PEACE in Ukraine mechanism. They will be used to cover the priority expenditures of the state budget,” Shmyhal wrote in a telegram on Wednesday.
According to him, in 2024, Ukraine expects tangible financial support from Japan. “We have held many talks on this issue in Tokyo and obtained significant results. I thank our partners for their unconditional support,” Shmyhal wrote.
Japanese partners have confirmed their interest in projects to support Ukraine’s agricultural sector and train veterans, and the respective teams of the two countries are working together to find ways to implement these intentions, said Vitaliy Koval, chairman of the State Property Fund, following the visit of a Ukrainian delegation led by Prime Minister Denys Shmyhal to the Conference on Economic Development and Reconstruction in Tokyo.
According to a release from the Fund, its head spoke about the key areas of the agency’s work, investment proposals for Japanese business, and new projects of the SPFU team – work with sanctioned property and the Land Bank, which is scheduled to be launched at the end of this year.
Regarding the latter project, the head of the Fund had a separate meeting with representatives of the Ministry of Agriculture, Forestry and Fisheries of Japan, as the SPFU manages 386 thousand hectares of agricultural land, which should work for the Ukrainian economy and bring profit to the state budget.
According to Koval, the meeting discussed attracting Japanese investors to the Ukrainian agricultural sector, in particular, the use of their equipment, as the need of Ukrainian farmers for mechanized machinery with a capacity of up to 200 hp is very high, and the world leaders in the production of such equipment are concentrated in Japan.
“Ukragroleasing can become their partner here. The company is managed by the SPFU and can help with leasing equipment,” said the head of the Fund.
He also called on foreign partners to pay attention to one of the most important areas of work for the whole country – retraining and training of veterans, which is the management and maintenance of agricultural machinery.
Koval said that the State Property Fund has the capabilities to assist in training: it can be conducted at the SPFU’s training centers, and such facilities will become training centers for operators and service engineers for Japanese agricultural machinery.
As reported, during the visit, the Ukrainian delegation signed 56 documents related to cooperation in many sectors of the economy of the two countries.
Prime Minister of Ukraine Denys Shmyhal says that Ukraine and Japan have signed 56 intergovernmental agreements, memorandums, and arrangements between businesses and local authorities at the Economic Development and Recovery Conference.
“56 documents were signed by representatives of Ukraine and Japan at the Economic Development and Recovery Conference in Tokyo! Among them are intergovernmental agreements, memoranda, and agreements between businesses and local authorities,” Shmyhal wrote on his Telegram channel.
In particular, an intergovernmental convention on the avoidance of double taxation was signed; more than a dozen agreements to support Ukraine’s recovery with powerful Japanese organizations (JICA, JETRO, the NEXI Export Credit Agency and the Japan Bank for International Cooperation); grant agreements for the implementation of recovery programs, as well as a number of documents between the Ministry of Agrarian Policy of Ukraine and Japanese companies providing Ukraine with various agricultural machinery and equipment; an intergovernmental memorandum on supporting Ukraine’s recovery with the
“Naftogaz agreed on a wind energy project; the Ukrainian gas transportation system operator signed a memorandum on preparations for the modernization of gas compressor stations. According to the Prime Minister, documents were also signed in the fields of energy, telecommunications, infrastructure construction, and ecology.
“Japan has already shown leadership in financial support for Ukraine. Now Japan should become one of the leaders of Ukraine’s recovery and investment in our economy,” Shmyhal summarized.
Japan plans to donate 15.8 billion yen (about $106 million) to Ukraine for the country’s post-war reconstruction, particularly in the areas of demining, agriculture, bio- and information technology, Kyodo News reports.
“Japan will pledge 15.8 billion yen ($106 million) to help rebuild Ukraine after war damage in seven areas, such as infrastructure reconstruction and demining,” the agency wrote on Sunday, citing sources familiar with the situation.
It is expected that “at the Japan-Ukraine Conference on Promoting Economic Reconstruction to be held on February 19 in Tokyo, the two governments will agree on Japan’s participation in the post-war reconstruction of Ukraine and sign more than 10 memorandums of cooperation.”
The conference will be attended by the prime ministers of the two countries, Fumio Kishida and Denys Shmyhal, as well as representatives of industry and business.
According to the agency, the aid “will be used to provide demining equipment and temporary bridges, as well as other resources urgently needed to help rebuild the war-torn country… The seven areas of cooperation also include agriculture, humanitarian relief, biotechnology and industrial development, information technology, as well as governance and anti-corruption measures.”
Ukraine’s state budget has received about $390 million from Japan as part of World Bank projects aimed at social protection and agricultural recovery, the Ministry of Finance said in a statement on Wednesday evening.
According to the report, Japan’s financial assistance in January consists of a $89.8 million grant under the Emergency Project for Inclusive Support for Ukraine’s Agricultural Recovery (ARISE) and a $300 million loan under the Investing in Social Protection to Improve Coverage, Resilience, and Efficiency (INSPIRE) project.
“I am grateful to the World Bank and the Government of Japan for their strong financial support for Ukraine. The funds raised will be used to reimburse the expenditures of the state budget of Ukraine for priority needs, in particular in the field of recovery and social assistance,” Finance Minister Sergii Marchenko said in a release.
The Ministry of Finance reminded that the INSPIRE project is funded by a $1.2 billion loan from the World Bank from the Trust Fund for the Provision of Necessary Credit Support to Ukraine (ADVANCE Ukraine) with the support of the Government of Japan and aims to ensure social protection of vulnerable populations during and after the war, as well as to strengthen the adaptability of the social support system to effectively respond to current and future challenges.
The ARISE project aims to support agricultural producers’ access to finance through concessional lending and grants.
