The International Finance Corporation (IFC) and the Ministry of Agrarian Policy and Food of Ukraine have signed a Memorandum of Understanding to modernize and develop the irrigation and drainage sector in Ukraine.
According to the ministry’s press service, the Memorandum aims to increase private sector private sector participation in an inclusive and climate-resilient agricultural sector. Investment and expertise of the private sector will contribute to the modernization and development of the irrigation and drainage infrastructure so that the potential of Ukraine's agricultural sector be better unleashed in the global market.
According to the World Bank, irrigating 1 million hectares of land in southern Ukraine, the country's driest region, would require $2 billion in investment. As the state budget is limited, the participation of the private sector in this issue is very important.
Therefore, IFC will cooperate with the government of Ukraine to reform this sector, in particular, to help the government develop a plan for the organization and functioning of a national operator of main irrigation canals, which will be responsible for the maintenance of irrigation systems.
IFC will also support the government in developing a public-private partnership (PPP) model that could effectively meet the sector's large-scale financial needs and attract private investment in irrigation equipment.
“The Memorandum defines fundamental principles of structuring the national water operator with corporate governance to the highest international standards. It also creates vital preconditions for attracting billions of investments from private investors, development banks and foreign state financial institutions into rehabilitation and modernization of Ukraine’s irrigation infrastructure,” said Roman Leshchenko, Minister of Agrarian Policy and Food.
The International Finance Corporation (IFC) is one of the five institutions of the World Bank Group. It advances economic development and improves the lives of people by encouraging the growth of the private sector in developing countries.