World Bank has officially presented a financing package of $3.39 billion to revive the economic scene of Ukraine. This development policy operation – called the First Ukraine Jobs and Private Sector Growth Development Policy Operation – is the first in a two-part series of development programs for a sustainable recovery.

The overall funding mechanism is institutional loans, grants and international guarantees. It is accompanied by a $1.04 billion loan, backed by the ADVANCE Ukraine Trust Fund (with Japanese funding) for a credit enhancement of $540 million. Furthermore, the UK Government is offering a £500m guarantee and a huge £2.35bn funding is being offered via the F.O.R.T.I.S. fund.

Implementing Strategic Reforms for Market Integration and Labor Growth

The key goal of this capital injection is to help the Ministry of Finance of Ukraine to create a robust private investment climate. To accomplish this, the program will revise the Public-Private Partnerships regulatory framework, enhance the financial options for small and medium-sized business and further the current state privatization process in the country.

Stabilization of the domestic labor market is equally important, since it has been badly upset during the war. The agreed structure facilitates targeted reforms aimed at encouraging attractive sectors of the economy, such as the modernisation of housing policies, the promotion of veteran entrepreneurship, enhancing the participation of women in the active workforce and addressing the common mismatches in skills.

Last but not least, the funding is heavily geared towards enhancing Ukraine’s ties to cross-border markets, namely deepening the process of aligning with the European Union. This involves linking national electricity market institutions to European ones, improving transparency of agricultural support payments and improving the environmental monitoring to international standards.