The UK government has announced a new economic package that is
designed to support Ukraine’s continued stability.
Foreign Secretary 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 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
