KYIV. Aug 26 (Interfax-Ukraine) – The World Bank’s Board of Executive Directors on August 25 approved a $500 million IBRD loan to finance the Second Multi-Sector Development Policy Operation in Ukraine, the World Bank has said on its website.
“The package of reforms supported by this operation will help address the deep-rooted structural problems that have contributed to Ukraine’s current economic crisis,” Qimiao Fan, World Bank Country Director for Belarus, Moldova, and Ukraine, said.
World Bank said that this new financing (Development Policy Loan, DPL) supports a number of high-priority structural and macroeconomic reforms to improve the country’s public sector governance, business environment, energy and social assistance.
In particular, reform measures supported by this loan – the second in a series of two – will promote good governance, transparency, and accountability in the public sector. The loan ensures that scarce public resources will be used effectively to provide quality public services at a crucial time.
At the same time, the operation will support efforts to strengthen the regulatory framework and reduce the cost of doing business. This should help unleash the private enterprise and help create sustainable and good quality jobs for Ukrainians.
Finally, this operation will assist the authorities to continue reforming inefficient and inequitable utility subsidies while protecting the poor from tariff increases by strengthening social assistance, World Bank said.
This operation is part of the World Bank Group’s broader financial support package announced in February this year, which aims to provide Ukraine with up to $2 billion in 2015. The $750 million First Multi-Sector Development Policy Loan was disbursed in May 2014.
Earlier, deputy head of the presidential administration of Ukraine Dmitry Shymkiv and government officials clarified that the World Bank’s issue of a $500 million DPL-2 will enable Ukraine to receive $300 million from the government of Japan under a bilateral intergovernmental agreement on the promotion and protection of investment (an investment agreement between Japan and Ukraine).
The Verkhovna Rada adopted the necessary laws for this new funding in the spring and summer of this year along with other laws that have allowed Kyiv to get a $1.7 billion second tranche from the International Monetary Fund within the EFF program in early August.
The World Bank is a major development partner of Ukraine. With this new investment, the Bank’s active lending portfolio will amount to over $5 billion. The bank’s current investments go into improving basic public services that directly benefit people of the country, such as water, sanitation, heating, power, roads, social safety net programs and health services.
Since Ukraine joined the World Bank in 1992, the Bank’s commitments to the country have totaled over $9 billion for 45 projects and programs.
