On Tuesday, the 4th of April, Latvian government supported the allocation of 10 million euros from the state budget towards contributions to international organisations to support Ukraine.
Funding was provided in accordance with Law on Assistance to Ukrainian Civilians in order to pay grants to the International Development Association’s Crisis Support Programme for Ukraine and Moldova (8 million euros) and to pay a grant to the World Bank’s Ukraine Relief, Recovery, Reconstruction and Reform Trust Fund (2 million euros).
Minister of Finance Arvils Ašeradens is ordered to inform the Saeima Budget and Finance Committee about appropriate legislative changes and, if the committee voices no objections in the five-day term for discussions, perform necessary changes to appropriations.
The Ministry of Finance reports that, based on the assessment of losses and needs from Ukraine, European Commission, World Bank and International Monetary Fund, Ukraine’s direct losses reach 135 billion US dollars as of February 2023. Additionally, approximately 14 billion US dollars will be needed for immediate reconstruction needs.
Losses have increased by 38% and needs have increased by 18% since the previous estimate.
At the end of 2022 the evaluation of immediate financial needs suggested the funding amount necessary for 2023 will reach three to four billion US dollars a month. The priorities set by the Ukrainian government for 2023 cover energy infrastructure, territorial marking, housing, critical and social infrastructure, as well as the private sector. To afford priorities listed for 2023, another 11 billion US dollars will be necessary every month – six billion to support the state budget and five billion to support state capital associations and the private sector.
The World Bank has provided and mobilised notable economic support to Ukraine. The bank also managed to secure significant support from donor countries, including Nordic and Baltic States.
Latvia was one of the first countries to support coverage of Ukrainian government’s needs through the mediation of the World Bank with a grant of five million euros and a guarantee of ten million euros, as reported by the ministry.
To continue providing support to Ukraine and Moldova, as well as the world’s poorest countries affected by the Russian-Ukrainian war, the World Bank has developed a new Crisis Support programme.
Additionally, in 2022 the World Bank created Ukraine Relief, Recovery, Reconstruction and Reform Trust Fund (URTF) in order to provide grants to support the country’s restoration and sustainable reconstruction.
The government’s supported support for Ukraine of 10 million euros includes an eight million euros grant to the Crisis Support programme and two million euros grant to URTF.
The ministry explains the grant to the Crisis Support programme will provide the highest returns for the loan to Ukraine, whereas the grant to URTF will provide diversified support from Latvia to Ukraine using all available instruments from the World Bank.
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