Ukraine and the International Bank for Reconstruction and Development (IBRD) solidified a $550 million agreement to support the nation's agricultural sector, which has been significantly impacted by the ongoing conflict with Russia. The funding is part of the ARISE project, initiated in October 2023, and aims to provide financial aid to over 90,000 farmers.
The World Bank forecasts a 3.5% economic growth for Ukraine following a severe slump in 2022 due to the war. This new accord aims to mitigate the financial strain and ensure continuous financing for agricultural enterprises despite the aggressive war that caused significant agricultural losses.
The finance package consists of a $230 million loan from the ADVANCE Ukraine Trust Fund, backed by Japan, and a $320 million grant from URTF. It also includes a provision of $500 million earmarked for the Affordable Loans 5%-7%-9% Program for the years 2023-2024. This program is designed to lower borrowing costs for agricultural businesses.
In addition to loans, a $50 million provision is available for grants that these enterprises can access. These funds are expected to enhance financing access for agricultural producers through concessional loans and grants.
Finance Minister Sergii Marchenko underscored the critical importance of this funding due to the war's devastating impact on agriculture and ensuing food nutrition security concerns. Since Russia's full-scale invasion in February 2022, Ukrainian entities have dealt with immense financial strain.
In response to these challenges, Ukrposhta secured a mortgage agreement with the Ministry of Finance to meet €30 million guarantee obligations. Since the onset of hostilities, the World Bank has mobilized over $38 billion for Ukraine, disbursing more than $29 billion by October 30, 2023.
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