Preparation of new framework projects “Lifting up Education And Results in Times of Need” (LEARN) and “Investing in Social Protection for Inclusion, Sustainability and Efficiency” (INSPIRE) was discussed by the Ministry of Finance of Ukraine and representatives of the World Bank on August 29.
According to the Ministry of Finance on its website on Wednesday, the estimated cost of these projects is $500 million and $1.2 billion, respectively.
It is specified that also in the center of attention was a new project “Strengthening the health care system and preservation of life” (Heal Ukraine), announced earlier this year in the amount of EUR 368 million.
The Ministry of Finance reminded that the projects “Improvement of Higher Education in Ukraine for Results” in the amount of $200 million and “Modernization of the System of Social Support of the Population of Ukraine” in the amount of $750 million are currently being implemented.
It is indicated that at the meeting Deputy Minister of Finance Roman Yermolichev noted the importance for Ukraine to implement measures aimed at the formation of human capital, in particular the development of health care, education and social protection.
“For us now one of the main challenges is to work out effective measures and incentives for our citizens to return to Ukraine and invest their capital in the development and restoration of the state. In addition, we also have to work out the necessary solutions to make school education qualitative and effective for children,” he said.
In his opinion, the new joint LEARN project will provide the urgent needs for the reconstruction of the education sector in Ukraine.
The deputy minister added that special attention was paid to the continuation of the New Ukrainian School reform.
NEC Ukrenergo, the Ministry of Energy and the Ministry of Finance have signed two agreements with the World Bank to provide the company with $240 million in grant aid to improve the reliability of the energy system, Ukrenergo Chairman of the Board Volodymyr Kudrytskyy said.
“Almost $240 million is another significant contribution from our international partners to ensure the sustainability of our connection to the European energy system and the restoration of high-voltage substations,” he wrote on his Facebook on Tuesday evening.
According to his message, the first agreement provides Ukrenergo with grant funds from the German government, which will be used for the purchase and installation of STATCOM – special devices that increase the stable operation of the power grid.
“Ukrenergo fulfills an important technical condition of ENTSO-E to strengthen our connection to the European grid. STATCOM devices will not only increase the stability of the Ukrainian energy system, but will also have a positive impact on the balance of the entire interconnected European continental grid,” Kudrytskyi explained.
Another document determines the transfer of assistance to the NEC for the purchase of special equipment, autotransformers and other high-voltage equipment damaged by Russian missile and drone strikes.
At the same time, the head of Ukrenergo thanked the Ukrainian government, WB Vice President for Europe and Central Asia Antonella Bassani and WB Regional Director for Eastern Europe Arup Banerjee “for the fruitful joint cooperation and strengthening of Ukraine’s energy security”.
Part of the donor funds for Ukraine’s quick recovery is being channeled through the new Ukraine Recovery, Rehabilitation and Reforms Trust Fund (URTF) created by the World Bank late last year, whose size the bank intends to increase to $2 billion, WB Governor David Malpass said.
“We intend to increase this fund to $2 billion and to mobilize an additional $1 billion to $2 billion from private partners,” he said Wednesday at the third ministerial roundtable in support of Ukraine, which took place at the WB and IMF spring meeting in Washington.
Malpass specified that the mechanism was created to mobilize additional support from the International Finance Corporation (IFC) of the World Bank Group, which works with the private sector and has already allocated about $150 million to Ukraine’s private sector with support from donor partners across Europe.
“We have pledged to share risks with the IFC,” the WB chief noted.
He added that the Multilateral Investment Guarantee Agency (MIGA), part of the WB Group, would also help with this task and had already provided more than $116 million in guarantees for Ukraine since the war began.
“It is critical to support the country’s long-term growth through projects in sectors such as energy infrastructure, transportation, agriculture and human capital. Our investments will be accompanied by policy and reform advice and the structuring of viable projects that can mobilize private capital,” Malpass stressed.
As World Bank Regional Director for Eastern Europe Arup Banerjee told Interfax-Ukraine in late February of this year, $295 million had been accumulated in the URTF at the time.
The World Bank (WB) has set up a multilateral trust fund to support the Ukrainian government, the WB said in a statement.
The fund has attracted $250 million in seed financing.
“The Ukraine Recovery, Rehabilitation and Reform Trust Fund (URTF), which will be managed by the WB, will provide a coordinated mechanism for financing and supporting government activities,” the WB said in a press release.
According to the Swiss government’s commitments to the founding contribution and contributions from the governments of Austria, Iceland, Lithuania, the Netherlands, Norway and Sweden, the initial total amount of the fund is $250 million.
Canada and Japan have also pledged to support the URTF. Other partners are expected to join, the report said.
As the bank notes, due to the uncertainty of the situation in Ukraine, Kiev’s partners have to take a long-term approach to supporting the government’s efforts. Therefore, the fund has the structure of a flexible platform, which will provide the ability to respond quickly to changing circumstances and the needs of the country in the first 10 years of its operation.
The URTF will operate within the overall Multidonor Fund for Ukrainian Institutions and Infrastructure, which is part of the broader international support for the country and is coordinated by the World Bank group.
The WB recalls that to date it has mobilized $18 billion in emergency financing for Ukraine, taking into account donor commitments, of which more than $13 billion has already been disbursed. The largest donor is the United States.
The World Bank predicts the growth of the economy of Uzbekistan in 2022 by 5.3%, according to the updated WB economic review for the Europe and Central Asia region.
Earlier in April, the World Bank expected the country’s GDP to grow by 3.6% this year.
“According to forecasts, Uzbekistan’s GDP growth will slow to 5.3% in 2022 (in 2021 the economy grew by 7%) and will be 4.9% in 2023. Increasing difficulties in the field of logistics (supplies) associated with sanctions against Russia, will slow down the growth of private consumption,” the document says.
At the same time, according to the WB, private investment and exports are expected to grow steadily, and the current account balance of payments will improve, as Uzbekistan continues to benefit from high world commodity prices (gold, copper, natural gas) and increased remittances from labor migrants. .
“Foreign direct investment is not expected to increase in 2022, and the trade deficit will be covered primarily by government borrowing,” the review said.
According to the World Bank, higher commodity export revenues and “slow” government investment spending will reduce the budget deficit from 6.2% of GDP in 2021 to 4.4% in 2022. However, the deficit will be higher than planned (at 3%) due to higher government spending on social protection, health care, education and infrastructure development.
The government is expected to continue to adhere to its own borrowing restrictions. Thus, public debt and total external debt will gradually decrease to 32% and 55% of GDP, respectively, by the end of 2024.
The state budget of Uzbekistan for 2022 included GDP growth at the level of 5.9%, the inflation rate was planned to be reduced to 9%.
Earlier, the EBRD raised its growth forecast for the economy of Uzbekistan from 4% to 5.5%. The ADB forecast for the growth rate of the economy of Uzbekistan for the current year has not changed – 4%. According to the State Statistics Committee of Uzbekistan, in the first half of the year, the country’s GDP increased by 5.4%.
The World Bank has already begun work on fundraising and plans to create new trust funds at the request of Ukraine for $17 billion needed for urgent recovery, Roman Kachur, Alternate Executive Director for Ukraine at the World Bank, has said.
“To date, the government has prioritized the $17 billion needed for an urgent recovery, for the most necessary things until the end of 2023. To operate these funds, we are completing the registration of the trust funds,” Kachur said during an online conference of the Center for Economic Strategy on Tuesday .
According to him, the symbolic name of this fund will be MRIya – Multi-donor trust fund for recovery and institution and infrastructure.
Kachur recalled that on September 9, the World Bank and the European Commission presented a report prepared jointly with the UN and the government of Ukraine, according to which direct losses inflicted by Russia from the beginning of the war to June 1 amount to about $100 billion, economic losses – $250 billion, and funds to restore the destroyed until June 1 – about $350 billion.
Of these, the World Bank has set $105 billion as funds needed over the next 18-36 months, but given that “this is an unsustainable amount for either donors or the government,” the government has prioritized $17 billion.
The representative of Ukraine in the World Bank said that trust funds would have to act as a multiplier so that Ukraine could receive two or three dollars from one dollar of funds provided by donors.
“In fact, since Friday, September 9, the fundraising has already begun. We plan to hold a roundtable at the same level during the annual meeting of the IMF and World Bank in October as it was in April – at the level of finance ministers and heads of central banks of our donor partners – and in fact explain the situation and obtain certain commitments to provide funds,” Kachur said.
He said that since the beginning of the war, the World Bank has already transferred $9.4 billion from its own account and from the accounts of trust funds (including U.S. grants, UK guarantees), or 54 cents from every dollar of external support during this period.
