Ukraine’s Capacity for Reconstruction to Advance with World Bank Support

WASHINGTON, November 7, 2024-The World Bank announced today a new $750 million support package for Supporting Reconstruction through Smart Fiscal Governance (SURGE) that aims to assist the Government of Ukraine in improving its public investment management system at the central level and enhancing public financial management and fiscal governance at local and regional levels.

SURGE was developed using the World Bank's Program for Results financing instrument that will support government initiatives to promote essential reforms, modernize revenue administration, and focus on creating a stronger connection between the transfers allocated to local governments and their needs for service delivery and reconstruction. The Ministry of Finance of Ukraine will be responsible for executing the program.

Additionally, to support the Government of Ukraine in implementing the SURGE program, a $10 million grant project, the Strengthening Government Capacity for Fiscal Reform Implementation (STRONG), was approved on November 4, 2024 that will help bridge skills gaps within the Ukrainian public administration, ensuring that Ukrainian authorities receive the technical assistance needed to design and execute institutional reforms aligned with the SURGE operation.

"It is remarkable to see that despite the devastating damage that Ukraine is experiencing during the third year of the war, all state institutions operate without disruptions, and key state services are provided to citizens in full capacity," said Bob Saum, World Bank Country Director for Eastern Europe. "As the country moves forward, it will be necessary to develop its capacity for long term development, prepare for European Union accession, manage public infrastructure projects and public finances effectively, and enhance revenue administration."

Financing for SURGE includes $450 million from the Japan-supported ADVANCE Ukraine trust fund, and a $300 million credit from the International Development Association (IDA) Special Program for Ukraine and Moldova Recovery. The program is results-based financing that can be scaled-up as additional funds become available.

The SURGE program is an integral part of the international support package for Ukraine to meet its financing needs through 2024. Other ongoing projects include emergency operations for health, education, transport, energy, housing, agriculture, and government programs for the private sector, which have mobilized partner resources through a flexible design to disburse funds quickly and can be scaled as necessary when additional financing becomes available.

Since Russia's invasion of Ukraine, World Bank Group-mobilized support has enabled the Government of Ukraine to promote reforms and provide essential services that are reaching more than 15 million Ukrainians. The World Bank Group has facilitated more than $50 billion in financing to support Ukraine, including commitments and pledges from donors including: the United States, Japan, the United Kingdom, Norway, the Netherlands, Spain, Germany, Canada, the Republic of Korea, Switzerland, Sweden, Denmark, Austria, Finland, Iceland, Ireland, Indonesia, Lithuania, Latvia, New Zealand, and Belgium.