Ukraine to receive Eur88,5-mln grant from World Bank fund

KYIV. April 22 (Interfax-Ukraine) - Ukraine will receive a Eur88.5-million grant from the World Bank fund for the economic recovery development policy.

Ukrainian Finance Minister Serhiy Marchenko and Arup Banerji, World Bank Regional Country Director for Eastern Europe (Belarus, Moldova and Ukraine), signed the respective agreement in Washington DC on Thursday night, the Ukrainian Finance Ministry said on Friday.

According to the ministry, Ukraine will receive the grant from the fund, as part of the Second Economic Recovery Development Policy Loan for Ukraine.

The funding will help Ukraine maintain macroeconomic stability, Marchenko said. "The grant is our priority, as we need to start thinking about the future and the country's recovery," he said.

The fund established by World Bank Group has received donations from Denmark (about Eur20.5 million), Iceland (about Eur0.46 million), Latvia (about Eur5.0 million), Lithuania (about Eur5.0 million) and the UK (about EUR60,0 million).

Marchenko also said on social media after a meeting with British Chancellor of the Exchequer Rishi Sunak that the UK would provide $500-million credit guarantees as financial assistance to Ukraine to mitigate the economic impact.

"Rishi Sunak has backed my earlier call for the urgent provision of Ukraine with some of the funds allotted by partners to accommodate the Ukrainian budget needs. That would allow the government to continue the secured expenses and social programs," he said.

Marchenko said he had been assured of the British readiness to join the effort towards drawing other countries and financial institutions into the two new mechanisms of financial support to Ukraine, namely the World Bank's trust fund and the IMF's administered account for distribution of SDRs allotted by the Fund earlier.

Meanwhile, World Bank Group has tentatively estimated the physical damage done to buildings and infrastructure in Ukraine at about $60 billion, World Bank President David Malpass said.

He said at a ministerial roundtable in support of Ukraine, which took place at the Spring Meetings of the World Bank and the International Monetary Fund, that the estimate did not include the costs incurred by the Ukrainian economy, which were still growing.

In the words of Malpass, World Bank Group had mobilized over $3 billion for Ukraine, so that it could continue to provide principal state services. He thanked the United States, the United Kingdom, Norway, Denmark, Austria, Latvia, Lithuania and Iceland for the grants provided via the Multi-Donor Trust Fund (MDTF), the United Kingdom, the Netherlands and Sweden for the provided guarantees, and Japan for the parallel financing.

Malpass said they should prioritize current Ukrainian needs for financing, which will minimize its future debts. He underlined the importance of grants and pledged to bolster confidence in financial, monetary and financial institutions of Ukraine by contributing to currency stability as they move forward.

Besides the MDTF, he lauded the additional instruments, such as the IMF's administered account, the European Union's Solidarity Fund, and the European Bank for Reconstruction and Development's Resilience Package, and urged all partners to continue coordinated support to meet Ukrainian budget needs.