New EUR 300 Million World Bank Loan to Support Reforms in Ukraine Amid COVID-19 Pandemic
WASHINGTON – The World Bank’s Board of Executive Directors approved today a EUR 300 million Second Economic Recovery Development Policy Loan (DPL) for Ukraine in support of reforms critical to the country’s economic recovery and growth, and to help mitigate the impacts of the COVID-19 pandemic.
The key reforms supported by the DPL include: (i) fostering de-monopolization of the economy and strengthening anti-corruption institutions; (ii) strengthening land and credit markets, including access to finance for small farmers; and (iii) bolstering the social safety net for the vulnerable elderly population to cushion the impact of the COVID-19 pandemic.
“Amid high levels of economic vulnerability, a slow and uneven recovery from the COVD-19 shock is underway in Ukraine, and we hope this loan will provide the necessary support to reforms aimed at fostering a stronger, more inclusive recovery,” said Arup Banerji, World Bank Regional Country Director for Eastern Europe. “The World Bank welcomes the significant steps the Government has undertaken to advance historic land reforms, including strengthening the transparent functioning of land markets and increasing access to affordable credit for small farmers. We expect these reforms will help increase living standards by allowing some 4.6 million small landowners in Ukraine to get a fair return on, and invest in, their most valuable asset.”
This DPL is the second of two operations, with the first DPL, totaling $350 million equivalent, approved in June 2020 to support the launch of land reform and help the Government of Ukraine boost growth and investments in this sector, while protecting the most vulnerable from the economic shocks caused by the pandemic.
The development policy loan is part of the World Bank’s stepped-up support to Ukraine aimed at addressing the impacts of COVID-19 and complements the approval of additional financing of $150 million for the Emergency COVID-19 Response and Vaccination Project approved on December 10, 2021. Since the beginning of the pandemic, the World Bank has provided Ukraine with a total of $2.3 billion in budget support and investment projects.
The World Bank’s overall portfolio of projects supports improvements in basic public services that directly benefit ordinary people, in areas such as water supply, sanitation, heating, power, energy efficiency, roads, social protection, education and healthcare, as well as private sector development. Since Ukraine joined the World Bank in 1992, the Bank’s commitments to the country have totaled more than $14 billion in about 80 projects and programs.