Ukraine and the International Bank for Reconstruction and Development (IBRD) have signed a $550m agreement to support agricultural producers’ access to finance through concessional loans and grants.

According to a statement released by Ukraine’s Minister of Finance, the funding was secured under the World Bank’s project called the Agriculture Recovery Inclusive Support Emergency (ARISE). ARISE was launched at the end of October 2023 to support more than 90,000 farmers in Ukraine financially by offering about $1.5bn in working capital and grants to farmers and small farms for agricultural production.

The new funding comprises a $230m loan from the World Bank’s Advancing Needed Credit Enhancement for Ukraine (ADVANCE Ukraine) Trust Fund – supported by the Japanese government – and a $320m grant from the Ukraine Relief, Recovery, Reconstruction and Reform Multi-Donor Trust Fund (URRF).

Around $500m of the total amount will finance the Affordable Loans 5-7-9% Programme in 2023-2024, with most of the money earmarked to go into agricultural enterprises. The funding is meant to ease the cost of borrowing for farmers despite Ukraine’s war with Russia.

“Agriculture is suffering significant losses from the aggressive war of Russia, which has negative consequences for food nutrition security both in Ukraine and around the world,” said Sergii Marchenko, Ukraine’s Minister of Finance. “The signing of the agreements between Ukraine and the World Bank is extremely timely and necessary to ensure uninterrupted access to financing for Ukrainian agricultural business. The ARISE project will help thousands of Ukrainian farmers to continue their production in the face of war.”

Ukraine’s state and private companies have gone through significant financial pressure to stay operational ever since Russia launched a full-scale invasion against its smaller neighbour in February 2022. In October, Ukraine’s national postal service Ukrposhta signed a mortgage agreement with the Ministry of Finance to secure the delivery of guarantee obligations reaching €30m.

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Since February 2022, the World Bank has mobilised over $38bn in financial support to Ukraine. Over $29bn of them have been disbursed as of 30 October 2023.