World Bank approves USD 350 mln loan for reforms support in Ukraine

The World Bank’s Board of Executive Directors approved a USD 350 mln First Economic Recovery Development Policy Loan (DPL) for Ukraine in support of reforms that are critical to economic recovery and to help mitigate the impact of the COVID-19 pandemic.

Pursuant to the Bank's report, the key reforms supported by the DPL include: (i) strengthening land and credit markets by creating a transparent and efficient market for agricultural land and resolving non-performing loans in state-owned banks; (ii) fostering de-monopolization and anti-corruption institutions including by restructuring the gas sector; and (iii) bolstering the social safety net for the vulnerable elderly population to cushion the impact of the COVID-19 pandemic.

"The COVID-19 pandemic is resulting in a sharp economic downturn that is hurting the incomes of ordinary Ukrainians and small businesses, and straining the government’s budget," said Arup Banerji, incoming World Bank Country Director for Belarus, Moldova, and Ukraine.

It is also noted that gas sector restructuring by creating an independent gas transmission system operator is already helping safeguard Ukraine’s gas transit revenues.

This DPL is the first of two planned operations, with the second DPL expected to support the additional important land reform legislation.

As a reminder, Ukraine started the implementation of the Program on Accelerating Private Investment in Agriculture. The USD 200 mln loan was approved by the International Bank for Reconstruction and Development (IBRD) in August 2019. On May 20 of the current year, it came into force after the internal state procedures.