The loan, known as the Ukraine Relief and Recovery Development Policy Loan (DPL), has been guaranteed by the Government of Japan under the Advancing Needed Credit Enhancement for Ukraine Trust Fund (ADVANCE Ukraine). It forms a crucial part of the international support package intended to address Ukraine's financing needs for the year 2023.

The primary focus of the loan is to support three key areas of government reforms aimed at mitigating the impacts of the ongoing conflict. Firstly, it aims to provide relief to households affected by the war, particularly those who have been displaced or have fallen into poverty. Secondly, it will assist in implementing reforms that enhance the transparency and accountability of public resource expenditures. Lastly, the loan aims to improve the functioning of markets during and after the conflict.

“Since February 2022, the World Bank has worked relentlessly with the international donor community to provide emergency financing that is helping the Government of Ukraine keep kids in school, hospitals open, and ensure basic government functions,” said Antonella Bassani, World Bank Regional Vice President for Europe and Central Asia. “Ukraine, in turn, has shown immense resilience in the face of Russia’s invasion. We commend the government for taking on difficult reforms during a war, with an eye to its future and the long-term development gains of the country. The World Bank will continue its unwavering support to help Ukraine recover and rebuild an even stronger economy.”

The loan will be utilized to strengthen Ukraine's social protection system, enabling relief measures for the most vulnerable and impoverished individuals. Reforms will be implemented to remove potential exclusions for internally displaced persons (IDPs) in the Housing and Utility Subsidy program. Additionally, the loan will facilitate the establishment of a register for damaged or destroyed properties, enabling compensation payments and guiding the reconstruction of housing in Ukraine. It will also contribute to the improvement of the public procurement system and the country's tax reporting framework to combat tax evasion and avoidance.

Furthermore, the loan will enhance market functionality during the conflict and ultimately contribute to economic recovery. Reforms will focus on land, energy, and financial markets, including measures to improve reporting of land transaction prices, mitigate corruption risks in public land privatization processes, enhance cost recovery in wholesale electricity markets, and strengthen financial sector stability.

Since Russia's invasion of Ukraine, the World Bank has provided substantial support, enabling the Government of Ukraine to offer essential services to more than 13 million Ukrainians. With this recent approval, the World Bank Group has facilitated over $37.5 billion in emergency financing to support the people of Ukraine. The funding includes commitments and pledges from various donors, such as the United States, Japan, the United Kingdom, Norway, the Netherlands, Spain, Germany, Canada, Switzerland, Sweden, Denmark, Austria, Finland, Ireland, Lithuania, Latvia, Iceland, and Belgium.

In the upcoming fiscal year 2023-2024, the World Bank and the Government of Ukraine plan to implement framework projects targeting priority sectors, including energy, health, social protection, education, housing, and agriculture. These projects aim to bolster Ukraine's long-term development and facilitate its path towards a stronger economy. (ILKHA)