Multi-Donor Trust Fund for Co-financing of the Ukraine Second Economic Recovery Development Policy Program (FREE)

Description What is done in the programme or project and why, what results are pursued, who benefits from the activities and who are involved in the implementation.

The Russian invasion in Ukraine on 24 February 2022 has led to considerable economic and humanitarian losses in Ukraine. Finland supports Ukraine’s resilience by participating in the Multi-Donor Trust Fund (MDTF) established by the World Bank in March 2022 to provide critical financing for Ukraine following the outbreak of war. In the current situation it is important to provide support for Ukraine’s acute needs and for future rebuilding efforts after the war. Ukraine’s economy has suffered from the ongoing war and the country struggles to raise finance in international financial markets for urgent financial needs. The decline of Ukraine’s economy threatens the already achieved development results and raises poverty among the population. Finland's support to Ukraine is channeled through the MDTF that is managed by the World Bank and monitored by MFA together with other donors in accordance with standard administrative procedures. The MDTF is not a traditional budget support operation but it provides co-financing for the Ukraine Second Economic Recovery Development Policy Program and is part of the World Bank's planned USD3 billion support to Ukraine over the next months. The Fund aims to provide broad support to the resilience of Ukraine’s public sector in the current situation. It will contribute to provide liquidity and strengthen public sector's capacity to maintain continued spending to critical public and basic services. The MDTF is a critical instrument for the international community in support of Ukraine in the crisis. The changing nature of the situation highlights the need for a flexible and adaptive approach. Finland supports Ukraine’s resilience and long term reforms. The objectives of Finland’s country strategy in Ukraine include protecting Ukraine’s territorial integrity and sovereignty and safeguarding the respect of international law in the conflict. Further objectives are strengthening of bilateral relations and cooperation, improving livelihoods of Ukrainians and the resilience of the society as well as supporting the deepening of the relations between Ukraine and the European Union. The provided support contributes to Finland's development policy priorities on promoting peaceful and democratic societies and sustainable economy in accordance with the Government's Report on Development Policy Across Parliamentary Terms.