The Washington-based World Bank says it has approved a plan to grant the pro-Western Ukrainian government a $500-million loan package.
In a Tuesday statement, the World Bank’s Board of Executive Directors said the new financing supports a number of structural and macroeconomic reforms in Ukraine to enhance the country’s business environment and public sector governance.
“The package of reforms supported by this operation will help address the deep-rooted structural problems that have contributed to Ukraine’s current economic crisis,” said Qimiao Fan, World Bank Country Director for Belarus, Moldova, and Ukraine.
“We are helping Ukraine to implement an urgent set of measures, which will be essential to stabilize the economy, provide quality services to all Ukrainians and return the country to a sustainable growth path,” Fan added.
The loan is part of the World Bank’s financial support package announced in February, which is set to provide Kiev with up to $2 billion in the current year. In May 2014, the organization disbursed a $750 million loan to Kiev.
Earlier this month, the International Monetary Fund (IMF) approved a new $1.7 billion loan for Ukraine, a tenth of the $17.5-billion financial aid program adopted by the organization in March. Ukraine has accepted to implement economic reforms in exchange for the bailout.
Kiev’s debt will rise to 95 percent of its gross domestic product (GDP) by the end of 2015, according to the National Bank of Ukraine’s July statement.
The country’s economy has been damaged by clashes in its eastern regions with pro-Russians.
Ukrainian servicemen stand on an armored personnel carrier on their way to the village of Staroignativka in the eastern Donetsk region, August 12, 2015. (© AFP)
The two mainly Russian-speaking regions of Donetsk and Luhansk in eastern Ukraine have been the scene of deadly clashes between pro-Russia forces and the Ukrainian army since Kiev launched military operations to silence protests there in mid-April 2014.
Violence intensified in May last year after the two flashpoint regions held local referendums in which their residents voted overwhelmingly in favor of independence from Ukraine and joining the Russian Federation.
The fighting has reportedly left almost 7,000 people dead, and more than 17,000 others injured.