World Bank to Provide $500 Million (USD) Loan to Ukraine to Support Economic Reforms

The Ukraine has been embattled in both a military sense and economically for the past year. On August 25, 2015, the World Bank’s Board of Executive Directors approved a $500 million (USD) loan designed to finance a multi-sector reform and development policy enacted by the Ukraine. The reforms and financing should support a number of important reforms designed to improve the public sector as well as the business environment, energy sector, and social assistance programs.

The Ukraine has been embattled in both a military sense and economically for the past year. On August 25, 2015, the World Bank’s Board of Executive Directors approved a $500 million (USD) loan designed to finance a multi-sector reform and development policy enacted by the Ukraine. The reforms and financing should support a number of important reforms designed to improve the public sector as well as the business environment, energy sector, and social assistance programs.

According to Qimiao Fan, the World Bank’s Country Director for Belarus, Moldova, and Ukraine, “The package of reforms supported by this operation will help address the deep-rooted structural problems that have contributed to Ukraine’s current economic crisis.” He went on to say, “We are helping Ukraine to implement an urgent set of measures, which will be essential to stabilize the economy, provide quality services to all Ukrainians and return the country to a sustainable growth path.”

The World Bank serves as one of the world’s largest sources of financial assistance, funding, and knowledge for developing nations. This loan represents the second round of assistance provided by the World Bank to the Ukraine. In particular, this loan supports programs to promote a better government, improved transparency, and better accountability in the public sector.

The World Bank hopes this loan will ensure better use of the government’s resources to provide improved public services during this time of economic crisis. Simultaneously, the loan will support structural reforms to strengthen the regulatory framework and reduce the cost of doing business in the former Soviet state. This, in turn, should cause private business to improve, leading to sustainable, high quality jobs for Ukrainians. Ultimately, this should continue to trickle down to reforms designed to combat inefficient and inequitable utility subsidies, protect the poor, and strengthen social assistance.

According to the World Bank, the current round of lending is part of a larger financial support package that it announced in February 2015. The package aims to provide Ukraine with up to $2 billion (USD) in 2015. The World Bank already provided Ukraine with $750 million (USD) in financing in May 2014.

With the latest round of financing, the World Bank becomes a major development partner for the embattled former Soviet nation. The current loan brings the World Bank’s total investment in Ukraine up to $5 billion (USD). All of the bank’s current investment focuses on improving public services directly benefitting the general populace of the nation. These services include water, sanitation, heating, power, roads, social welfare programs, and health services.

Since joining the World Bank in 1992, the Ukraine has received over $9 billion (USD) in financing for more than 45 different projects and programs, mostly designed to improve social services and enhance economic stability and independence.