World Bank approved $100 mln project to support economic recovery of Eastern Ukraine

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The FINANCIAL — The World Bank’s Board of Executive Directors approved a $100 million project to support the Government of Ukraine’s efforts to promote socioeconomic recovery and development of Eastern Ukraine, where the continuing conflict has impacted the lives and livelihoods of over five million Ukrainians. The Eastern Ukraine: Reconnect, Recover, Revitalize (3R) project will focus on Government-Controlled Areas (GCAs) of Luhansk Oblast, which have experienced the most severe economic downturn due to conflict, bringing in much-needed investments to improve transport connectivity and promote agricultural sector recovery.

Working in rural areas of Luhansk Oblast GCAs, the 3R project will improve road infrastructure and connectivity to markets and services, and help promote agricultural development and economic growth in rural areas. The project also includes community participatory approaches to ensure that conflict-affected and vulnerable populations, such as women, veterans, and internally displaced persons (IDPs), participate in project decision-making processes and monitoring.

“This is the first loan in the World Bank’s portfolio, targeted to help the Government of Ukraine deliver on its commitment to outreach and development support for conflict-affected populations. The 3R project builds on the World Bank’s national portfolio of investments and sector knowledge in transport, agriculture, and land reform, extending this support to Eastern Ukraine. Thousands of people in conflict-affected communities will benefit from 3R project investments,” said Arup Banerji, World Bank Regional Country Director for Eastern Europe (Belarus, Moldova, and Ukraine).

The project will develop an implementation support platform, including national-regional-local government collaboration in delivering on 3R project investments, and strong engagement of local communities. The project will also support public-private investment forums to raise awareness and promote investment opportunities in the region. These activities promote sustainability and possible future scale-up and expansion of World Bank investments to additional sectors and geographic areas in Eastern Ukraine.

Since 2014, the World Bank has been a partner to the Government of Ukraine in addressing the development impacts of the conflict. Along with the UN and the EU, the World Bank initiated its engagement as the co-author of the Recovery and Peacebuilding Assessment for Eastern Ukraine (RPBA) that was adopted by the Government of Ukraine in August 2015.

Based on RPBA results, the Bank launched the Conflict Response and Recovery Pilot and Capacity Building project ($3.6 million), financed by the Fragile, Conflict and Violence group’s State- and Peace-building Fund and designed a World-Bank Administered Multi-Partner Trust Fund on Peacebuilding and Recovery ($2.07 million) in partnership with the Government of Ukraine, the United Nations, and the Governments of Sweden and Canada. The financing has supported analytics, technical assistance and capacity building support to a new national Ministry focused on reintegration and recovery efforts, and pilot programming in Eastern Ukraine to address the needs of Internally Displaced Persons (IDPs), veterans, and host communities. These prior activities provided a foundation for advancing the 3R Project.

The World Bank’s current investment project portfolio in Ukraine amounts to about $2.8 billion in nine ongoing investment projects. The investments support improving basic public services that directly benefit ordinary people in areas such as water supply, sanitation, heating, power, energy efficiency, roads, social protection and healthcare, as well as private sector development. Since Ukraine joined the World Bank in 1992, the Bank’s commitments to the country have totaled approximately $13 billion in about 70 projects and programs.

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