The World Bank's Board of Executive Directors has approved a Development Policy Operation (DPO) for Ukraine, aiming to enhance the country's economic policy framework and financial stability. The initiative involves financing of $1.05 billion from IBRD resources, credit-enhanced through the Advancing Needed Credit Enhancement (ADVANCE) Ukraine Trust Fund, supported by Japan and the United Kingdom. Additionally, it is co-financed by a $1 billion grant from the Facilitation of Resources to Invest in Strengthening Ukraine Financial Intermediary Fund (F.O.R.T.I.S. Ukraine FIF).
This DPO is the second in a series designed to aid the Ukrainian government in implementing reforms that will bolster economic potential and macro-financial stability. The first operation was approved in March 2024.
"Despite significant challenges, the Government of Ukraine has stabilized the economy and remains focused on its development goals, particularly its ambition to join the European Union," stated Bob Saum, World Bank Regional Country Director for Eastern Europe. "There have been significant achievements, and Ukraine continues to advance in its efforts to implement reforms to establish a vibrant market economy. The World Bank Group and our international partners will continue to support the Ukrainian people in realizing their EU aspirations."
The operation focuses on two main pillars: enhancing growth potential and creating a supportive macro-financial policy framework. The first pillar aims at increasing competitive entry opportunities in the railway sector, improving governance, streamlining state involvement in banking, promoting renewable energy production, boosting agricultural credit flow, and enhancing customs staff competency.
The second pillar targets strengthening domestic revenue generation by aligning excise tax rates on motor fuels with EU standards and conducting comprehensive agricultural land valuation. It also seeks to improve procurement integrity through updated legislation.
This DPO forms part of an international support package addressing Ukraine's financing needs alongside other projects focusing on health, education, transport, energy, housing, agriculture, private sector programs, and public administration.