The Ministry of Finance and the World Bank are preparing a new agreement of at least $1 billion Development Policy Operation

On June 2, a World Bank mission on Economic Policy and Poverty began its work in Kyiv.

From June 2 to 6, a team of the World Bank, together with representatives of the Ministry of Finance and the Government of Ukraine, are working to coordinate the key parameters of a new Development Policy Operation (DPO) agreement.

The agreement envisions attracting a loan from the International Bank for Reconstruction and Development (IBRD) in 2025 in the amount of at least USD 1 billion.

On the first day of the mission, representatives of the Ministry of Finance of Ukraine — Deputy Minister of Finance Olga Zykova, Deputy Minister of Finance Roman Yermolychev, and Government Commissioner for Public Debt Management Yuriy Butsa – held productive discussions with the World Bank team, led by the Bank’s Leading Economist and Economic Policy Program Manager for Eastern Europe Yue Man Lee, and Senior Economist Florian Blum.

“The World Bank is one of Ukraine’s key strategic partners in advancing systemic reforms. We are continuing joint work on the new Development Policy Operation (DPO) agreement, which will not only help attract necessary resources to support the State Budget, but also stimulate economic recovery and development. Last year, around USD 3.5 billion was disbursed to the State Budget under this mechanism through three project agreements. These funds helped cover priority expenditures, support financial stability, and implement important reforms, particularly in customs and tax policy, state-owned enterprises, the energy sector, the banking sector, and private sector development,” noted Deputy Minister Olga Zykova.

The DPO is a systemic project aimed at supporting reforms in Ukraine. Funds provided under the project will be directed to the general fund of the State Budget upon fulfillment of agreed conditions.

Key reforms focus on strengthening the foundations of economic policy to ensure sustainable growth.

In particular, the parties discussed reform initiatives in the social sector to be included in the new DPO.

“Starting from July 1, 2025, Ukraine will launch a pilot project to introduce basic social assistance. This is a new form of support that will consolidate several existing social benefits into one. The basic assistance will be provided to citizens who meet eligibility criteria, with a base amount of UAH 4,500. Recipients will be able to decide independently whether to switch to the new basic social assistance system,” stated Roman Yermolychev during the meeting.

He also informed the mission about the Ministry of Finance’s approval of a draft law to support families and encourage childbirth, scheduled for implementation next year:

“We plan not only to revise benefit amounts but also to change the approaches to supporting parents after childbirth, aiming to improve the demographic situation, raise birth rates in Ukraine, and encourage parents to actively participate in the country’s economic development.”

Ukraine is expected to receive at least USD 1 billion under the project by the end of 2025. The parties agreed to continue the necessary work to implement the DPO program.

Next steps include finalizing the conditions by the end of June, Ukraine’s fulfillment of these conditions by the end of October, and approval of the financing by the World Bank’s Board of Executive Directors in November.