The Board of Directors of the World Bank approved a new systemic project in Ukraine “Supporting recovery through prudent fiscal management” (SURGE), the planned total amount of which at the approval stage is about $750 million for 2024-2027.
“Reforms within the framework of the project are aimed at improving the efficiency of management of public investments and state finances. If necessary, funding can be increased,” – commented Prime Minister Denys Shmyhal in the Telegram channel.
The bank noted that the SURGE project was developed with the use of the financial instrument “Financing for Results Program”, which will support government initiatives aimed at promoting important reforms, improving budget revenue administration processes and creating a closer connection between transfers allocated to local authorities , and their needs for service provision and recovery.
In addition, to support the government in the implementation of the SURGE program, on November 4, 2024, the project “Strengthening the Government’s Capacity to Implement Fiscal Reform” (STRONG) was approved, which will be financed within the framework of a grant in the amount of $10 million to overcome gaps in public management skills in Ukraine and providing the government of Ukraine with technical assistance necessary for the development and implementation of institutional reforms agreed with the SURGE project.
“As the country moves forward, it will be necessary to develop its capacity for long-term development, preparation for accession to the European Union, effective management of state infrastructure projects and public finances, as well as improvement in the administration of budget revenues” – the regional director of the World Bank commented on the new project in of Eastern European Affairs Bob Som.
The SB specified that the financing of the SURGE program consists of $450 million from the ADVANCE Ukraine trust fund, which is supported by the Japanese government, and a $300 million loan from the Special Program (SPUR) of the International Development Association (IDA) for the reconstruction of Ukraine and Moldova. The program provides result-oriented funding, which can be increased depending on the receipt of additional funds.
The Ministry of Finance of Ukraine noted that within the framework of the loan agreement with MBB, it plans to attract the provided funds by the end of 2024. The relevant agreements are expected to be signed in the near future.
