World Bank approves USD 1.5 bln loan for Ukraine
23 May 2014
The World Bank’s Board of Executive Directors approved on May 22 three new projects for Ukraine amounting to USD 1.48 bln. This new financing will be reinforced by technical assistance and policy dialogue to help drive forward essential structural and macroeconomic reforms. The projects approved by the Board are part of the World Bank Group’s overall assistance to Ukraine announced in March this year, which aims to provide up to USD 3.5 bln by the end of 2014.
USD 750 mln from the loan will be allocated on high-priority reform measures, addressing key structural roots of the current economic crisis in Ukraine. USD 382 mln will be spent on energy efficiency projects and USD 350 mln will be allocated on infrastructure projects.
Alexander Paraschiy: We have further evidence that capital flow to the country will be improving over the upcoming months. Spending of the funds will be somewhat complicated due to tightened procurement procedures and for this reason will be stretched out over time. Still unlike the IMF funds, which have been reserved for external redemptions, World Bank money is to be spent at the local market which will have a direct effect on the hryvnia exchange rate. Against this backdrop we confirm again our exchange rate forecast for end 2014 at 10.5 hryvnia per USD.
