Kyiv, November 14, 2008 - The World Bank is preparing a package of financial assistance to Ukraine in response to the global financial crisis impacting the country, the World Bank office in Kyiv announced today. In the immediate future, the World Bank is accelerating the preparation of the Development Policy Loan III, which provides funding to the Ukrainian government budget in support of critical structural reforms to mitigate the effects of the crisis and lay the foundations for a rapid return to economic growth.
"DPL III will help the government with funding for the budget at a time when other sources have become scarce and expensive", - said Martin Raiser, Country Director for Ukraine, Belarus and Moldova. - "Despite political instability, Ukraine has steadily advanced key reforms and DPL III will provide a signal that the country's commitment to open and competitive markets remains strong."
Among the key reform measures supported by DPL III are increases in utility tariffs to put these services on a sustainable footing by reducing financial losses, improved transparency in the financial and corporate sectors including through the new Joint Stock Company Law, and a revised framework for public procurement.
The World Bank has also started work on a banking sector rehabilitation loan, which would assist the government in putting in place a strong bank recapitalization framework and provide funding to the budget to support specific bank resolution or recapitalization cases. A significant technical assistance effort, coordinated with other multilateral and bilateral donors is envisaged to ensure the program's effective implementation.
"This is a new facility, which we are preparing at the request of the authorities to respond to the urgent needs in the banking sector", - said Fernando Montes-Negret, Director of the Private and Financial Sector Development unit of the World Bank's Europe and Central Asia Region. - "The World Bank Group, namely the World Bank, the International Finance Corporation and the Multilateral Investment Guarantee Agency, is working closely with the IMF, the EBRD, and with bilateral partners to ensure Ukraine benefits from the best international experience in addressing this challenge."
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