The World Bank approved the allocation of Ukraine $ 500 million to support policy development.
The Board of Directors of the World Bank on on 25 August approved the allocation of Ukraine the second multi-sector development policy loan (DPL-2) in the amount of $ 500 million, according to a statement on the website of WB.
“The package of reforms supported under this operation will help to solve the deep-rooted structural problems that contributed to the current crisis in the economy of Ukraine”, – commented the decision of the World Bank Director for Belarus, Moldova and Ukraine Qimiao Fan.
WB said that loans to support development policies (DPL) – is the direct budget support provided directly to the government of Ukraine to promote the implementation of its reform program. Funding for the new loan supports the implementation of several priority structural and macroeconomic reform, namely designed to improve management in the public sector, business environment, the situation in the energy sector and the provision of social assistance.
In particular, the reforms, which provided support for this loan should promote better governance, transparency and accountability in the public sector. DPL-2 is supposed to ensure efficient use of available public resources to provide quality public services in these difficult times.
Simultaneously, within the framework of this operation will be supported by efforts aimed at strengthening the regulatory framework and reducing the cost of doing business. They are designed to help release the potential of private enterprise and the creation of stable and quality jobs for the citizens of Ukraine.
Finally, this operation will help the Ukrainian authorities to continue the reform of inefficient and unjust system of subsidies for utilities while protecting low-income groups from the impact of higher tariffs for gas and heat supply by strengthening social assistance, says the World Bank.
The Bank reiterates that this operation is part of a broader package of financial support from the World Bank Group, announced in February of this year, providing for the allocation of Ukraine, funds of up to $ 2 billion over 2015. DPL-1 in the amount of $ 750 million was provided in May 2014.
Earlier, the deputy head of the Presidential Administration of Ukraine Dmytro Shimkiv and government officials clarified that the allocation of DPL-2 will enable Ukraine also received $ 300 million from the Government of Japan under a bilateral intergovernmental agreement on promotion and protection of investments (investment agreement between Japan and Ukraine).
Necessary laws for this new funding Verkhovna Rada adopted in the spring and summer of this year, along with other laws that are already allowed to Kiev in early August to get $ 1.7 billion second tranche of the International Monetary Fund to finance the expansion program EFF.
As reported, DPL-1 by $ 750 million, Ukraine received in May last year. The loan was granted for 16 years with a 7-year grace period with a variable interest rate – 6 months. Libor + a variable spread (the date of signing – 0.59%, one-time commission – 0.25%) and can be used to finance the budget.
The World Bank is the main partner of Ukraine in the field of development. With this new loan, the current loan portfolio of projects included in its group of the International Bank for Reconstruction and Development will exceed $ 5 billion. Its investment in Ukraine, the bank aims at improving the quality of basic public services available to all Ukrainian: water supply, drainage, heating, electricity, reconstruction of roads, modernization of systems of social support and public health.
