KYIV, March 26, 2024-The World Bank's Board of Executive Directors today approved a new Development Policy Operation (DPO) for Ukraine in the amount of $1.5 billion. The Growth Foundations operation is credit enhanced through the ADVANCE Ukraine Trust Fund ($984 million), supported by the Ministry of Finance of Japan, and guaranteed by the Government of the United Kingdom ($516 million).
The operation, the first in a proposed series of two, is designed to support the Government of Ukraine's reforms needed to strengthen the country's economic policy framework and enhance its macro-financial stability. Focusing on boosting critical competition, enhancing the financial sector, energy markets, trade, and fiscal reforms, the operation aims to support Ukraine's growth potential by increasing both private investment and productivity.
"Despite enormous challenges, Ukraine is undertaking challenging reforms, with an eye to cementing Ukraine's future in the European Union and ensuring the long-term prosperity of the country," said Antonella Bassani, World Bank Regional Vice President for Europe and Central Asia. "We commend and continue to support the Ukrainian authorities for these efforts, which has allowed Ukraine to maintain macroeconomic stability and provide essential services to its citizens. The World Bank and international partners will continue our support to help the Ukrainian people recover and rebuild their country and economy."
The operation is structured into two pillars. The first pillar aims to strengthen the economic policy framework to facilitate a structural shift towards sustainable growth. It supports policy actions to strengthen the corporate governance of state-owned enterprises, enable a fiscally sustainable and effective green energy transition, facilitate credit provision to the private sector, especially agriculture, and align Ukraine's customs regulations with the European Union.
The second pillar aims to enhance macro-financial stability to create a growth-conducive environment. This pillar supports policy actions to strengthen domestic revenue potential, improve capital market supervision, and safeguard against corruption risks in public procurement.
The First Growth Foundations DPO is an integral part of the international support package for Ukraine to meet its financing needs in 2024. Other ongoing projects include emergency operations for health, transport, energy, housing, and agriculture that have mobilized partner resources through a flexible design to disburse funds quickly and can be scaled as necessary when additional financing becomes available.
