29 Mar 2024 15:51

Ukraine receives $1.5 bln DPL loan from Japan, UK via WB - Finance Ministry

MOSCOW. March 29 (Interfax) - Ukraine has received $1.5 billion in the Growth Foundations Development Policy Loan (DPL) from Japan and the United Kingdom through a World Bank mechanism, the Ukrainian Finance Ministry reported on Friday.

"The general fund of the State Budget received $1.4 billion. In order to reduce the cost of servicing Ukraine's loan obligations, the Program provides for the capitalization of interest on Japanese funds in the amount of $99.54 million," Ukrainian media reported with reference to the ministry's statement.

The financing includes a $984 million guarantee from the Japanese government through the World Bank's ADVANCE Ukraine Trust Fund and a $516 million guarantee from the UK, it said.

The financing would be used to support key budget priorities, the statement quoted Finance Minister Sergei Marchenko as saying.

To receive the tranche, Ukraine had to meet eight requirements under the program, among them harmonizing its customs and tax legislation with EU standards, improving its fiscal policy and capital market regulation, and ensuring transparency and accountability in the e-procurement system, the ministry said.

As reported, National Bank of Ukraine (NBU) officials said at a press conference on March 14 that, while Ukraine had received only $1.2 billion since the start of 2024, it should receive another $10 billion or more in foreign financing by the end of April, which would enable it to replenish its reserves. The NBU said that this uneven foreign financing flow should not cause any shocks on Ukraine's foreign currency market.

Earlier this week, Ukraine received a first 4.5-billion-euro tranche under the Ukraine Facility program from the EU, $1.5 billion from Canada, and $230 million from Japan via the World Bank. On March 26, Ukraine also received $880 million from the International Monetary Fund (IMF) in a fourth tranche under an Extended Fund Facility (EFF) and 100 million euros from the Council of Europe Development Bank. Hence, March saw the largest amount of foreign financing received by Ukraine since the start of the crisis, i.e. over $9 billion out of the $37.3 billion to be provided to the country over the whole of 2024.