WASHINGTON: The World Bank said Thursday it is prepared to provide up to $2 billion in financial assistance to conflict-torn Ukraine this year, part of an international package of support.
“Today I am announcing that the World Bank is ready to commit up to $2 billion in 2015, supporting the people of Ukraine in the face of current economic, financial, and geopolitical challenges,” said World Bank President Jim Yong Kim in a statement.
The World Bank pledge came hours after a cease-fire agreement between Ukraine and pro-Russian separatists was announced in Minsk.
Earlier Thursday, International Monetary Fund Managing Director Christine Lagarde announced a preliminary deal on a new, four-year bailout for Ukraine worth $17.5 billion.
Lagarde said that, in total, Ukraine would receive $40 billion in assistance over four years, including loans from other sources like the World Bank.
“The Bank is working closely with the IMF,” the development lender said.
Both the IMF and World Bank financial aid offers require approval by their respective boards.
The Bank said the fresh aid would include budget support for reforms, especially in the gas and banking sectors, and investment projects to improve health services and public infrastructure, as well as focus on protecting the poor and fighting corruption.
“We hope that today’s agreement in Minsk and the IMF’s agreement with Ukraine will pave the way for a more stable economic and development environment to benefit the people of Ukraine,” Kim said.
After marathon talks in the Belarussian capital Minsk, Russian President Vladimir Putin agreed with the leaders of Ukraine, France and Germany to a cease-fire in the 10-month war between Ukraine and pro-Russian rebels, beginning on Sunday.
At least 5,300 people have died and one million have been driven from their homes in the fighting.
Beset by war and corruption, Ukraine’s pro-Western government is struggling to enact legal and economic reforms that would help steer the former Soviet republic out of Russia’s sphere of influence and into Western institutions.
In 2014, the World Bank, a long-term development partner to Ukraine since it joined the institution in 1992, approved $2.9 billion in aid, including $1.25 billion in direct budget assistance.
Ukraine’s currency, the hryvnia, lost 50 percent of its value last year and the economy shrank about 7.5 percent, with a further contraction of 5.0 percent expected this year.