Norway to provide NOK 200 million to support Ukrainian government administration

Norway has decided to allocate NOK 200 million (20 million euros) in funding to help the Ukrainian government to continue to provide critical services. The funding will be used to pay salaries for health care personnel, teachers and public sector employees, as well as pensions and social benefits.

‘Russia’s attack on Ukraine is having a dramatic impact on the Ukrainian economy. Norway will now use NOK 200 million of the support we have set aside for this conflict to provide direct help to the Ukrainian authorities. These funds will be of great benefit,’ said Minister of Foreign Affairs Anniken Huitfeldt.

The funds will be channelled through the World Bank emergency financing package for Ukraine. In early March the IMF estimated that Ukraine’s GDP could fall by 10­–35 % this year as a result of the war. The accuracy of these estimates and the scale of the war’s destruction remain very uncertain. The situation continues to be unpredictable.

FILE PHOTO: Jonas Gahr Store, Prime Minister of Norway, speaks during the UN Climate Change Conference (COP26) in Glasgow, Scotland, Britain, November 2, 2021. REUTERS/Hannah McKay/Pool

In addition to its purely humanitarian needs, Ukraine is in urgent need of support to maintain critical government services and infrastructure. On 7 March, the World Bank Board of Executive Directors approved an emergency support package for Ukraine amounting to over USD 700 million. The package consists of a supplemental loan of USD 350 million from the International Bank of Reconstruction and Development (IBRD), accompanied by guarantees and grant financing provided through a newly established multi-donor trust fund for Ukraine.

The support channelled through the multi-donor trust fund will be used to pay pensions, social benefits (cash benefits) and salaries for health care personnel, teachers and public sector employees. These payments are widely needed and the Ukrainian authorities will disburse the funds immediately.

The World Bank has stated that there will be a great need for further financial support to the Ukrainian authorities in the time ahead. The multi-donor trust fund now established in connection with the Bank’s emergency package will be crucial in this context, and the World Bank Board of Executive Directors is urging donors to provide additional funding. 

Norway has set aside NOK 2 billion for humanitarian efforts and aid to refugees in connection with the Ukraine crisis. Roughly half of this amount has been disbursed so far.