Ukraine, World Bank discussing loan guarantee program

The World Bank is continuing talks with Ukraine’s
Finance Ministry about the initiation of a new loan guarantee program, which it
expects by the year end, the Interfax-Ukraine news agency reported on Feb. 22,
citing Satu Kahkonen, the World Bank country director for Belarus, Moldova and
Ukraine. The Policy-Based Guarantee (PBG) loan program aims to support reforms
in the country and assist in attracting up to USD 1 bln in the process.

The progress in talks will depend on the
implementation of reforms currently and the World Bank will be ready to discuss
the program with a new government in case the necessary reforms are not
implemented during the tenure of the current cabinet, Kahkonen said.

Recall, the World Bank executive board approved USD 750 mln in financial guarantees
for the Ukrainian government on Dec. 18. On Dec. 27, Ukraine’s Finance Ministry
received a EUR 349.3 mln loan
(about USD 400 mln) from Deutsche Bank, which was provided under the guarantee
of the World Bank.

Evgeniya Akhtyrko: It’s
positive that an international financial institution is formulating a policy
that will be in place despite a possible change in leadership after the
presidential and parliamentary elections scheduled for this year. It’s also
positive that the World Bank is committed to an active financial position in
Ukraine so long as its government is engaging in reforms.

Given Ukraine’s high economic and political risks
this year, the assistance of international financial institutions is important
for getting affordable lending at the international markets.