8 Jun 2022 13:01

World Bank approves $1.5 bln for Ukraine

MOSCOW. June 8 (Interfax) - The World Bank Board of Executive Directors approved $1.49 billion of additional financing for Ukraine on Tuesday under the Public Expenditures for Administrative Capacity Endurance in Ukraine Project, the bank said in a press release.

"Funding from this latest project will be used to pay for wages for government and social workers. The project has benefited from financing guarantees from the United Kingdom, the Netherlands, Lithuania, and Latvia; parallel financing from Italy and expected future guarantees, including from Denmark," Ukrainian media outlets quoted the bank as saying.

The project has also been co-financed by contributions to a new Multi-Donor Trust Fund (MDTF) from several countries, including Switzerland.\

This new financing is part of the total support package of over $4 billion that the World Bank is mobilizing, which is up from the earlier estimated $3 billion. Nearly $2 billion of this funding has been disbursed, the bank said.

The World Bank Group is providing continuing support for Ukraine and its people, World Bank Group President David Malpass said in the press release. "We are working with donor countries to mobilize financial support and leveraging the flexibility of our various financing instruments to help provide Ukrainians with access to health services, education and social protection," he said.

Maintaining these core services and the ability of the government to deliver them is essential to preventing further deterioration in living conditions and poverty in Ukraine, World Bank Country Director for Eastern Europe Arup Banerji said. "In addition, keeping government capabilities functioning will be the bedrock of any recovery and reconstruction going forward," he said.

Banerji said in an interview with Ukrainian journalists that the new loan is intended to help finance the country's key expenditures in order to enable the government to keep functioning and to provide services to the population of Ukraine.

As part of this financing option, the World Bank pledges to refund the Ukrainian government for all the money it spends on paying wages to the main categories of public servants and educational sector employees every month, starting from March and at least until the end of the year, if the wages are paid in full, he said.

The loan was approved as part of the PEACE in Ukraine project, aimed to help finance state expenditures to ensure sustainable state governance in Ukraine, and is not a loan to finance development policy, he said.  

Thus, following the disbursement of the initial large grant for the March-May period, the remaining amount will be paid every month on the basis of real expenditure verification, he said.

This move will help Ukraine maintain and safeguard the government's potential both in the present situation and in the future in order to rebuild the country's economy, Banerji said.   

According to Banerji, the World Bank will soon issue a $100 million loan to Ukraine as part of steps to help internally displaced persons.

"Given the urgent need for central budget financing, the World Bank is currently focusing on providing quick and immediate assistance, which, in turn, can help the population, especially the most vulnerable groups of the population. First, very soon we will allocate another $100 million to help internally displaced persons," he told Ukrainian journalists.

Banerji said that the World Bank continues to provide assistance in the healthcare, infrastructure and the energy sector within ongoing projects.

\"We are also exploring opportunities for cooperation with other bilateral development partners (for example, Italy, Japan and the U.S.) who are very interested in attracting loan as part of the Public Expenditure Support project to ensure sustainable public administration in Ukraine and financing other types of verifiable budget expenditures," he said.

Specific expenditure items are yet to be agreed, but they will certainly include additional payments to internally displaced persons and other vulnerable groups of Ukraine's population, Banerji said.

Since Ukraine joined the World Bank in 1992, the bank's commitments to the country have totaled almost $16 billion in about 90 projects and programs, including the project approved on Tuesday.