The loan is part of the World Bank’s general aid for overcoming the crisis in Ukraine. This aid will amount to USD 3.5 Bl by year end. On September 8, Ukraine received a USD 500 Ml loan from the World Bank for supporting reforms in the financial sectors, the press service of the Finance Ministry of Ukraine reported. “Today the Finance Ministry received the first loan of USD 500 Ml for a development policy in the financial sector under the agreement between Ukraine and the International Bank for Reconstruction and Development signed on August 8, 2014,” reads the report. As a reminder, the loan is part of general aid to overcome the crisis in Ukraine.

The aid was announced by the World Bank Group in March 2014 and will total USD 3.5 Bl by the end of 2014. According to the Ministry, the loan was taken for 16 years with a seven-year grace period on a floating interest rate (0.63% on the signing date) plus a one-time fee of 0.25%. Finance Ministry officials noted that the loan will be used to support reform of the banking sector and introduce a comprehensive program of anti-crisis management in Ukraine’s financial sector. In particular, this is to include enhancement of operating, financial and regulatory potential of the Depositors Insurance Fund, improvement of the solvency of the banking system, and strengthening of the legal and institutional framework for increasing long-term sustainability and performance of the banking system. As reported before, the World Bank will consider the possibility of increasing financial aid to the Ukrainian banking sector by USD 500 Ml, up to USD 1 Bl. The World Bank is Ukraine’s main partner in the development area.

Since Ukraine joined the World Bank in 1992, the total amount of the Bank’s liabilities in the country has exceeded USD 9 Bl under 45 projects and programs. On September 4, Ukraine received the second tranche of the International Monetary Fund’s loan amounting to USD 1.39 Bl within a two-year standby credit facility.

UkrAgroConsult