Japan has transferred about $950 million to Ukraine as part of the World Bank's recovery and social protection projects.
Source. This was reported by the Ukrainian Ministry of Finance.
The aid package consists of a $52.4 million grant from Japan under the Housing Opportunities for People's Empowerment (HOPE) project and a $900 million loan from the Japanese government under the Social Protection Investment for Enhanced Coverage, Resilience and Efficiency (INSPIRE) project.
Ukraine is using these funds to reimburse budget expenditures for "urgent and priority needs, in particular in the areas of recovery and social assistance."
The goal of the HOPE project is to rebuild infrastructure in the combat-affected areas, de-occupied and affected regions of Ukraine. Funds will also be provided to homeowners for repairs in multi-apartment and private buildings that have sustained moderate damage and do not require major repairs. The project will support policy reforms at the national level to improve recovery outcomes and alignment with Ukraine's European integration goals.
On December 4, Ukraine's Social Policy Minister Oksana Zholnovych and the World Bank's Country Director for Belarus, Moldova, and Ukraine, Arup Banajeri, signed an agreement to establish INSPIRE.
The project is funded by a $1.2 billion loan from the World Bank's Ukraine Credit Assistance Trust Fund, with support from Japan.
On December 15, Ukrainian Prime Minister Denys Shmyhal announced that the World Bank would provide Ukraine with an additional $1.3 billion. This money will be used to pay pensions, support refugees, pay teachers' salaries, and other state budget expenditures. The bulk of the package was financed by Japan.
The Ministry of Finance of Ukraine reported that without additional support, the state budget for 2024 would have a $29 billion hole.
On December 17, the head of the International Monetary Fund, Kristalina Georgieva, said that without Western funding, Ukraine would be able to resist Russia for no more than two months, after which it would be forced to resort to "destabilizing policies," including additional money issuance, as it did last year within a few months after the war began. This would be an unfavorable development for Ukraine, given its current budget deficit.