WASHINGTON, December 18, 2018 - The World Bank’s Board of Executive Directors today approved a $750 million Policy-Based Guarantee (PBG) for Ukraine to support important reforms in banking, anti-corruption, agricultural land, pensions, utility subsidies, and healthcare.
The reforms are intended to strengthen the foundations for economic growth and macroeconomic stability in Ukraine. The $750 million guarantee is expected to help Ukraine raise about $1 billion from international markets to finance the country’s budget.
“The World Bank welcomes the Government’s commitment to these historic reforms to bolster economic growth, safeguard fiscal sustainability, and improve the effectiveness of social services,” said Cyril Muller, World Bank Vice President for Europe and Central Asia. “These reforms aim to create greater opportunities and improve living standards for the people of Ukraine.”
Strengthening corporate governance of state-owned banks, enhancing transparency of agricultural land records, and creating an anti-corruption court will help strengthen key markets and institutions critical for investment and growth. Reforms of pensions, energy subsidies, and healthcare will help address fiscal pressures, while improving the effectiveness of these important public services and social benefits.
“Overall, the reform program supported by the PBG addresses structural bottlenecks and sends a signal to investors about Ukraine’s ability to sustain reforms and address macroeconomic vulnerabilities ahead of the 2019 elections,” said Satu Kahkonen, World Bank Country Director for Ukraine. “This is particularly important for raising adequate budget financing in an environment where financial conditions have tightened for emerging markets.”
Since May 2014, the World Bank has provided a total of $5.5 billion to Ukraine (including 4 development policy loans and 7 investment operations), as well as a $500 million gas guarantee. The World Bank’s investment projects support improving basic public services that directly benefit ordinary people by improving water supply, sanitation, heating, power, roads, social protection and healthcare, as well as private sector development.