The World Bank has approved $3.39 billion for Ukraine: where the funds will be allocated
23 June 22:59
The World Bank’s Board of Executive Directors has approved a new financial support program for Ukraine totaling $3.39 billion. The funds are intended to help the Ukrainian government continue economic reforms, attract private investment, create new jobs, and deepen the country’s integration with the European Union market. This was reported by the World Bank’s press service, according to "Komersant Ukrainian"
This is the first Development Policy Operation (DPO), titled “Jobs in Ukraine and Private Sector Growth.” It will be the first of two planned operations within this series.
What Does the $3.39 Billion Package Include?
The total funding amounts to $3.39 billion. The package includes:
- a $1.04 billion loan from the World Bank;
- $2.35 billion in grant financing from the F.O.R.T.I.S. Ukraine Financial Intermediation Fund.
The $1.04 billion World Bank loan is backed by two additional international support mechanisms:
- a $540 million credit enhancement from the ADVANCE Ukraine Trust Fund, supported by the Government of Japan;
- $500 million in guarantees from the Government of the United Kingdom.
Thus, Japan’s support and the British guarantees are part of the loan structure, not separate payments in addition to the total amount of $3.39 billion.
How Ukraine Will Allocate the Funding
The program is aimed at revitalizing the Ukrainian economy with the active participation of the private sector. The reforms are intended to make it easier for businesses to operate, expand companies’ access to financing, and create more favorable conditions for domestic and foreign investors.
The funding is intended to support changes in three key areas:
- creating conditions for private investment;
- addressing the labor shortage;
- integrating the Ukrainian economy with the European Union market.
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Support for Business and Private Investment
One of the program’s main priorities is improving the business environment in Ukraine. The planned reforms are intended to attract private capital to the country’s reconstruction and economic development.
Specifically, the plan calls for improving legislation on public-private partnerships, expanding financial support for small and medium-sized businesses, and continuing the privatization of state-owned enterprises.
These changes are expected to help reduce administrative barriers, improve entrepreneurs’ access to financing, and stimulate the creation of new companies.
New Jobs and Addressing the Labor Shortage
The program will pay special attention to the Ukrainian labor market. Due to the war, forced migration, and demographic challenges, businesses are increasingly facing labor shortages.
The World Bank will support reforms aimed at:
- training professionals in line with the economy’s needs;
- increasing women’s participation in the labor market;
- supporting entrepreneurship among veterans;
- modernizing housing policy;
- creating conditions for the employment and return of Ukrainians.
The reform of housing policy should make housing more affordable for workers and internally displaced persons, as well as promote labor mobility between regions.
Ukraine’s Integration with the EU Market
Another focus of the program is aligning Ukrainian legislation with European Union standards.
Further integration of the Ukrainian electricity market with the European energy market is envisaged. There are also plans to increase the transparency of state support for the agricultural sector and improve the environmental monitoring system in line with EU standards.
These steps are intended to facilitate Ukrainian companies’ access to European markets, strengthen competition, and help Ukraine meet the conditions for future EU membership.
What Is the F.O.R.T.I.S. Ukraine Fund?
The F.O.R.T.I.S. Ukraine Financial Intermediary Fund was established to attract international resources in support of Ukraine. It finances non-military programs related to economic stability, reforms, recovery, and reconstruction.
As part of the new package, the fund will provide Ukraine with a grant of $2.35 billion. Unlike a loan, grant funding does not need to be repaid.
The fund’s support is intended to help Ukraine maintain macrofinancial stability and continue reforms amid a full-scale war.
The program will be part of a large-scale support effort for Ukraine
The World Bank emphasized that the new funding is part of broader international assistance to Ukraine. It is intended not only to support the country’s current budgetary needs but also to lay the foundation for long-term economic growth.
Implementation of the program is expected to help Ukraine attract more private investment, create jobs, strengthen business competitiveness, and accelerate integration into the European economic space.
Following the first tranche, the World Bank and the Ukrainian government plan to prepare the second phase of the development policy program.
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