Ukraine, World Bank, Japan, Canada sign agreement on $690.8-mln grant

MOSCOW. Feb 9 (Interfax) - Ukrainian Finance Minister Sergei Marchenko and World Bank Regional Country Director for Eastern Europe Bob Saum have signed an agreement on a $690.8-million grant, Ukrainian media said, citing a Finance Ministry said.

Japanese Ambassador Masashi Nakagome and deputy head of mission at the Canadian embassy Chrystiane Roy attended the signing ceremony, the media said.

The funds are drawn under the Public Expenditures for Administrative Capacity Endurance (PEACE in Ukraine) project. The funding is part of the G7 Extraordinary Revenue Acceleration for Ukraine (ERA) arrangement totaling $50 billion.

It includes the last tranche from Canada within the arrangement framework, and the first tranche from Japan. The grant has the following structure: $544 million contributed by the Japanese government, $146 million contributed by Canada, and $0.8 million from the PEACE Multi-Donor Fund.

The funds will be transferred to the state budget's general fund in the near future, the Finance Ministry said, adding they be used to reimburse key social expenditures, specifically pensions, and the implementation of state social assistance programs, including housing and utility subsidies.

"The money will increase the state budget's general fund revenues and reduce the need for external borrowing. It will help strengthen macro-financial stability and reduce the debt, ensuring timely payment of social benefits and smooth operation of state institutions," the statement quoted Marchenko as saying.

The overall funding of Ukraine drawn via PEACE since June 2022, including this grant, is $51.7 billion.