Ukraine receives $1.5 B loan from Japan, UK through World Bank mechanism

Ukraine has received a $1.5 billion Growth Foundations Development Policy Loan (DPL) from Japan and the United Kingdom through the World Bank mechanism.

That's according to the Ukrainian Finance Ministry's press service, Ukrinform reports.

The financing consists of a $984 million guarantee from the Government of Japan through the World Bank's ADVANCE Ukraine Trust Fund and a $516 million guarantee from the United Kingdom.

"The effective work of the Government, together with timely support from our partners, allows us to maintain financial system stability, despite the full-scale aggression and daily Russian terror. I am grateful to Japan, the United Kingdom and the World Bank team, who have been standing with Ukraine since February 2022. The raised financing will be used to support the key priorities of the State Budget," said Minister of Finance of Ukraine Sergii Marchenko.

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The general fund of the state budget received $1.4 billion. In order to reduce the cost of servicing Ukraine's loan obligations, the program provides for the capitalization of interest on Japanese funds in the amount of $99.54 million.

The ministry said that Ukraine had to fulfil eight requirements under the program, including the harmonization of Ukraine's customs and tax legislation with EU standards, improvement of fiscal policy and capital market regulation, and ensuring transparency and accountability in the e-procurement system.

On March 26, the World Bank's Board of Directors approved the DPL Loan, after which Marchenko and World Bank Regional Director for Ukraine, Belarus and Moldova, Europe and East Asia Arup Banerji signed the Loan Agreement.