Ukraine has received US$1.34 billion as the sixth additional financing under the World Bank project

Ukraine has recently secured a substantial financial boost of US$1.34 billion through the sixth additional financing under the World Bank project known as "Public Expenditure Support to Ensure Sustainable Public Administration in Ukraine" (PEACE in Ukraine).

This financing package is multifaceted, comprising a substantial loan of USD 1.086 billion from the World Bank. Notably, this loan is facilitated through a trust fund, named ADVANCE Ukraine, which is supported by the Government of Japan. The involvement of the Japanese government serves as a crucial guarantee, adding a layer of confidence to the financial support extended to Ukraine.

Multinational Support: Contributions from the United States, Japan, Norway, and Switzerland

In a diverse funding structure, the sixth additional financing for the PEACE project in Ukraine also encompasses a grant component. Norway is a significant contributor, providing a generous grant of US$190 million through the Ukraine Support, Reconstruction, and Reform Trust Fund (URTF).

Additionally, the United States government is contributing US$50 million, further fortifying the financial assistance framework. The Swiss government is also playing a role in this collective effort, contributing US$20 million to support Ukraine's financial stability.

“The financing consists of a loan from the World Bank in the amount of USD 1.086 billion, which was granted through a trust fund to provide Ukraine with the necessary credit support (ADVANCE Ukraine) under the guarantee of the Government of Japan”
the statement says.

The allocated funds serve a pivotal purpose, earmarked for the partial compensation of expenditures within the state budget of Ukraine. Importantly, these expenditures are unrelated to the sphere of security and defense. Specifically, the funds will be directed towards critical areas such as the payment of pensions and benefits to employees of the State Emergency Service (ESES), underlining a commitment to sustaining essential public services during challenging times.

Serhiy Marchenko, the Minister of Finance of Ukraine, expressed gratitude for the international financial assistance, emphasizing its significant contribution to Ukraine's financial and economic stability. He highlighted the role of this support in ensuring priority social spending, particularly in the backdrop of the ongoing conflict. The governments of Japan, the United States, Norway, and Switzerland have consistently demonstrated unwavering support and solidarity with Ukraine, showcasing a collective commitment to aiding the nation in a crucial moment.

European Union's parallel assistance: EUR 1.5 billion tranche boosts fiscal health

This recent financial injection follows closely on the heels of another significant development for Ukraine's fiscal health. On December 21, the Ministry of Finance successfully secured EUR 1.5 billion from the European Union, constituting the final tranche of a comprehensive macro-financial assistance program (MFD+) amounting to EUR 18 billion for the year 2023.

In conclusion, these financial initiatives underscore the collaborative efforts of the international community to bolster Ukraine's economic resilience and mitigate the impact of the ongoing conflict. The multifaceted support from the World Bank, European Union, and individual countries such as Japan, the United States, Norway, and Switzerland plays a crucial role in helping Ukraine navigate through these challenging times and maintain essential public services.