UK sets out new multi-million dollar economic package of support for Ukraine
The UK government has announced a new economic package that is designed to support Ukraine’s continued stability.
UK Foreign Secretary Liz Truss with Minister of Foreign Affairs of Ukraine Dmytro Kuleba on February 17, 2022
Foreign Secretary Liz Truss reiterates the UK’s commitment in standing ready to guarantee up to $500 million in loans to support Ukraine and mitigate the economic effects of Russian aggression.
Following the Prime Minister’s announcement yesterday, the UK stands ready to offer guarantees of Multilateral Development Bank (MDB) lending for projects that will support economic stability and vital reforms such as tackling anti-corruption.
This support will help mitigate economic impacts on Ukraine’s economy due to Russia’s aggression.
Foreign Secretary Liz Truss said:
We are putting our money where our mouth is and using Britain’s economic expertise and strength to support the people of Ukraine. These guarantees can help inject vital capital into Ukraine and help its economy weather the storm of Russian aggression.
Britain stands four-square behind Ukraine and its people. We stand ready to offer direct economic support, providing defensive weapons, and exposing Russian attempts to engineer fake pretexts for invasion.
In December, the UK also increased the amount of financial support available to Ukraine from UK Export Finance (UKEF) – to £3.5 billion – and signed a new treaty that will help Ukraine access the world-class UK supply chain to enhance its naval capabilities.
This economic support comes on top of increased support for military equipment from the Ministry of Defence and enhanced support to the humanitarian system in Ukraine.
Background
- Multilateral Development Banks (MDBs) are international financial institutions that provide financial assistance to developing countries and are owned by shareholding governments (eg The World Bank)
- the International Monetary Fund (IMF) is not an MDB
- in addition, a £100 million 3-year package of Official Development Assistance was announced on 17 February 2022, designed to bolster the most vulnerable parts of the Ukrainian economy and reduce Ukraine’s reliance on gas imports. Ukraine is heavily reliant on energy imports such as coal and gas, a fact which Russia has long exploited
- this funding will be used to co-finance a new World Bank energy efficiency programme, which will help Ukraine cut its emissions in line with its COP26 commitments. The UK is the first donor country financing this project and we hope to mobilise with partners to coordinate further support
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