Ukraine reaches $550 million deal with IBRD to boost agricultural development, Investing.com reports

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Ukraine and the International Bank for Reconstruction and Development (IBRD) have signed a $550 million agreement to support the country’s agricultural sector, which has been severely affected by the ongoing conflict with Russia. The grant is part of the ARISE project, which was launched in October 2023 and aims to provide financial support to more than 90,000 farmers.

The World Bank predicts that Ukraine’s economy will grow by 3.5% in 2022 after a sharp contraction due to the war. This new agreement is designed to minimize financial stress and ensure continued financing for agricultural businesses despite the severe agricultural losses caused by aggressive wars.

The financing package includes a $230 million loan from the Japan-backed ADVANCE Ukraine Trust Fund and a $320 million grant from the URTF. It also includes $500 million in funding for a 5%-7%-9% affordable loan program in 2023-2024. The program aims to reduce borrowing costs for agricultural businesses.

In addition to the loans, these businesses will have access to a $50 million grant reserve. The funds are expected to increase access to finance for agricultural producers through concessional loans and grants.

Finance Minister Sergei Marchenko stressed the importance of the funding in light of the devastating impact of the war on agriculture and subsequent concerns about food and nutritional security. Since Russia launched a full-scale attack in February 2022, Ukrainian entities have had to deal with significant financial pressure.

In response to these challenges, Ukrposhta entered into a mortgage loan agreement with the Ministry of Finance to fulfill its guarantee obligations of €30 million. Since the outbreak of the war, the World Bank has mobilized more than $38 billion in financing for Ukraine, with more than $29 billion disbursed as of October 30, 2023.

This article was created and translated with the help of artificial intelligence and reviewed by an editor. For more information, please see our terms and conditions.

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