World Bank approves $1.05 bln loan for Ukraine

MOSCOW. Dec 19 (Interfax) - The World Bank's Board of Executive Directors has approved a $1.05 billion Development Policy Operation (DPO) loan for Ukraine using International Bank for Reconstruction and Development resources through the Advancing Needed Credit Enhancement (ADVANCE) Ukraine Trust Fund, supported by Japan and the United Kingdom.

The operation is also co-financed by a $1 billion grant from the Facilitation of Resources to Invest in Strengthening Ukraine Financial Intermediary Fund (F.O.R.T.I.S. Ukraine FIF), Ukrainian media said, citing a statement on the World Bank website.

"The DPO [...] aims to support the government of Ukraine in implementing reforms that will strengthen the country's economic potential and improve macro-financial stability," it said.

This initiative supports the authorities' efforts to increase Ukraine's GDP per capita to converge with EU levels and strengthen the country's economic self-reliance, the statement said.

The first operation in the programmatic series was approved in March 2024, it said.

The operation is organized into two main pillars. The first pillar supports efforts to increase Ukraine's growth potential and focuses on policy measures to enhance competitive entry opportunities in the railway sector and improve its governance. It also seeks to streamline the state's involvement in the banking sector, promote renewable energy generation and production, increase agricultural sector credit flow, and enhance Ukrainian custom's staff competency.

The second pillar supports policy measures aimed at creating a growth-conducive macro-financial policy framework. This includes efforts to strengthen domestic revenue generation, including by aligning excise tax rates on motor fuels with EU standards and conducting a comprehensive valuation of agricultural land. Additionally, it aims to improve procurement integrity by updating procurement legislation.