Ukraine Secures $1.5 Billion Loan from Japan and Great Britain through World Bank

by Cheplyk Roman
Friday, March 29, 2024
Ukraine Secures $1.5 Billion Loan from Japan and Great Britain through World Bank

Ukraine has successfully received a $1.5 billion loan aimed at supporting the “Fundamentals of Growth” development policy, facilitated by Japan and Great Britain through the World Bank’s mechanism

This financial aid is designed to bolster Ukraine's efforts in various reform areas crucial for its growth and alignment with international standards.

The loan is structured with a $984 million guarantee from the Government of Japan, channeled through the World Bank's Trust Fund, and a $516 million guarantee from the Government of Great Britain. As a result, the general fund of Ukraine's state budget has been augmented by $1.4 billion. Additionally, to alleviate the burden of credit service costs for Ukraine, the program includes the capitalization of interest amounting to $99.54 million from the Japanese funds.

Ukraine's eligibility for this tranche was contingent upon meeting eight specific requirements of the program. These included aligning Ukraine's customs and tax legislation with EU norms, enhancing fiscal policy, regulating capital markets, and promoting transparency and accountability in the electronic procurement system.

This financial support comes against the backdrop of continued international solidarity with Ukraine. Notably, the Japanese government has extended the resolution to strip Russia of its "most favored nation" trade status for another year as part of its economic sanctions response to the invasion of Ukraine.

Additionally, Ukraine has recently received 320 out of an anticipated 1,800 gabions from Japan. These are intended for the physical protection of critical infrastructure, highlighting Japan's tangible support in enhancing Ukraine's resilience.

Further deepening bilateral relations, Ukraine and Japan have agreed to initiate negotiations on a bilateral agreement regarding security guarantees, demonstrating a strong commitment to Ukraine's sovereignty and security amidst ongoing challenges.

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