Ukraine counting on IDA's $2 bln SPURR facility, interest compensation - finance minister

MOSCOW. April 27 (Interfax) - The International Development Association (IDA) is broadening support for Ukraine by establishing a separate facility, the Special Program for Ukraine's Recovery and Crisis Response (SPURR), to multiply contributions and potentially provide Ukraine with $6 billion assistance, Ukrainian Finance Minister Sergei Marchenko said.

"It [the facility] will soon be announced. It is called the SPURR and totals $2 billion. This is a multiplicative facility: so to say, it will have triple multiplicity, and Ukraine may potentially get $6 billion assistance if $2 billion is raised," Marchenko said in an interview with the Ukrainian media.

It is loan from the World Bank, Marchenko said, adding that the multiplicative effect is very important.

Compensation of the interest on soft loans to Ukraine, including recovery loans, is being discussed, he said.

"Importantly, the new money should have no effect on our interest obligations. This is also important for the IMF program, for the provision of debt sustainability. So we ask our partners for compensating the interest if the loan is provided via the World Bank," Marchenko said.

The Ukraine Relief, Recovery, Reconstruction and Reform Trust Fund (URTF), formed by the World Bank earlier to provide grants to Ukraine, could be used for that purpose, he said.

"We indicate what instruments are available: the URTF for grants and the SPURR for loans with a multiplicative effect. The URTF could be used for compensating the interest on SPURR loans. This is how we see their synergy," Marchenko said, as he described the proposals Ukraine is discussing with potential recovery donors.

An interest compensation mechanism has been applied to the EU macro-financial assistance of 18 billion euros approved for this year, Marchenko said.