On 7 November, the World Bank’s Board of Directors approved a new systemic project in Ukraine “Supporting Reconstruction through Smart Fiscal Governance”(SURGE). At the stage of approval, the planned total project volume reaches about USD 750 million for 2024-2027.

Financing under the Project will consist of a USD 450 million loan from the International Bank for Reconstruction and Development (IBRD) from the Advancing Needed Credit Enhancement for Ukraine Trust Fund (ADVANCE Ukraine), supported by the Government of Japan, and a USD 300 million loan from the Bank’s Special Program for Ukraine and Moldova Recovery (SPUR) under the Crisis Fund.

Under the IBRD Loan Agreement, Ukraine expects to raise the envisaged funds by the end of 2024.

The goal of the Project is to create the necessary environment and institutional framework for the effective and accountable implementation and financing of climate-smart recovery.

SURGE will be implemented using the financial instrument “Programme-for-results”, which provides for the achievement of indicators, based on the results of verification of which the general fund of the State Budget of Ukraine will receive a loan defined for each indicator in the international agreement.

The project aims to support the Government of Ukraine’s efforts to establish an effective public investment management system in the context of post-war recovery and reconstruction, improve fiscal management at the local level, and enhance medium-term and programme budgeting at the local level and revenue administration.

In addition, to support the implementation of the institutional reforms supported by SURGE, an investment project “Strengthening Government Capacity for Fiscal Reform Implementation” (STRONG) has been approved. It will be financed with a USD 10 million grant from the World Bank’s Ukraine Relief, Recovery, Reconstruction, and Reform Trust Fund (URTF).

The relevant international agreements with the World Bank are expected to be signed in the near future.