Sweden planning additional support to Ukraine through World Bank
Minister for Finance Mikael Damberg has informed the World Bank that Sweden plans to issue a guarantee of USD 50 million for the World Bank’s loan to Ukraine. This will be added to the USD 350 million loan that the World Bank is already preparing.
– The Government’s priorities are to keep pushing for sanctions against Russia, to support Ukraine and to strengthen Sweden. Ukraine is in a situation of acute crisis and its financial and economic stability is expected to weaken further as a result of Russia’s aggression. By issuing this guarantee, Sweden is contributing approximately half a billion kronor in support to Ukraine, in addition to the loan that the World Bank is already preparing, says Minister for Finance Mikael Damberg.
Ukraine’s economy was affected by the deteriorating security situation in the region even before Russia’s aggression. An outflow of capital has drained the country’s foreign currency reserves, the currency has weakened substantially and the country’s Government has lost access to the international capital markets.
Due to Russia’s aggression against Ukraine, the Swedish Government has increased its humanitarian aid by SEK 500 million to support Ukraine and respond to the growing humanitarian needs. Through a committee initiative in the Riksdag last Monday, the Riksdag decided that Sweden will make a financial contribution of SEK 500 million to the Ukrainian central bank's special fundraising account to support the country’s armed forces, and provide defence materiel with a maximum total value of SEK 400 million.
The extraordinary situation requires substantial measures. This is why the Government intends to further increase its support to Ukraine by issuing a guarantee of USD 50 million for the World Bank’s loan to Ukraine. The World Bank is readying a USD 350 million loan to respond to Ukraine’s acute liquidity crisis. As the planned loan is a follow-up to a loan and reform programme that Ukraine received in 2021, the World Bank can begin the disbursement without delay. If Ukraine is unable to repay back the loan, Sweden’s guarantee will be financed through the aid budget.
– Apart from the immediate human suffering that the war is causing, Ukraine’s economic development is being seriously harmed. By giving a guarantee to the World Bank, Sweden is helping to support Ukraine financially in this very difficult economic situation, says Minister for International Development Cooperation Matilda Ernkrans.