Finland to support Ukraine with €50m loan through WB

Finland’s Ministry for Foreign Affairs will grant a EUR 50 million development policy loan to the International Development Association (IDA) of the World Bank Group for Ukraine, said the ministry in a press release on Thursday.

The loan will be provided for the Special Program for Ukraine Recovery 2.0 (SPUR 2.0), a new financing programme established by IDA to respond to Ukraine's substantial reconstruction and recovery needs.

Established to support Ukraine, SPUR 2.0 is part of the new IDA Crisis Facility, enabling the mobilisation of additional funding through IDA to support Ukraine's reconstruction and economic recovery.

According to the World Bank’s latest estimate, the cost of Ukraine's reconstruction and recovery will amount to almost USD 588 billion over the next decade.

“Supporting Ukraine is both a matter of values for Finland and an investment in European security and stability. Russia's war of aggression has caused immense damage, and the international community must therefore continue its determined support to ensure the resilience of Ukrainian society and to rebuild the country,” said Minister for Foreign Trade and Development Ville Tavio.

Financing provided through the programme can mobilise substantially more funding for Ukraine on more favourable terms than usual, owing to IDA’s strong balance sheet and AAA credit rating. The EUR 50 million loan granted by Finland will consequently enable the World Bank to channel significantly more funding to Ukraine.

By participating in the SPUR 2.0 programme, Finland can promote its key objectives in supporting Ukraine: maintaining the functioning and resilience of society, securing essential public services and promoting economic recovery and sustainable reconstruction. At the same time, the programme creates conditions for private sector investments, jobs and economic growth.

The loan decision requires the consent of Parliament.