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World Bank Says Preparing $650 Million Loan Guarantee For Ukraine

Satu Kahkonen, the World Bank's country director for Belarus, Moldova, and Ukraine

The World Bank says it is preparing a $650 million guarantee to help Ukraine obtain funding in global-debt markets, but Kyiv must first comply with economic reforms demanded by the International Monetary Fund.

The World Bank's Country Office for Ukraine said in a Facebook posting on August 16 that, at the request of Ukrainian authorities, it will provide Kyiv with an International Bank for Reconstruction and Development guarantee so it can raise about $800 million in funding, once the IMF's demands are met.

"Once appraised and approved, the proposed operation would provide a $650 million IBRD guarantee that is expected to help Ukraine raise about $800 million through a private transaction in the lending market," the global development lender said.

For Ukraine to obtain the guarantee, the IMF must first "confirm the completion of all reform actions and the adequacy of the macroeconomic framework" established by Kyiv, it said.

Especially "critical" will be the enactment of banking and credit-reform laws passed in July by Ukraine's legislature, the Verkhovna Rada, the World Bank said.

Ukrainian authorities must also reach agreement with the IMF on a fourth review of its program in Ukraine, "without which the proposed operation will be unable to proceed," the bank said.

Satu Kahkonen, the World Bank's country director for Belarus, Moldova, and Ukraine, recently said that the bank has invested about $5.5 billion in Ukraine since 2014, including $2.5 billion allocated for various investment projects, $2 billion to support regional budgets and pursue reforms, and $500 million for purchases of natural gas.

An IMF mission is planning to visit Ukraine from September 6-19.

Based on reporting by UMIAN, Ukrinform, and TASS