USD 100 MILLION WILL BE ALLOCATED INTO INFRASTRUCTURE DEVELOPMENT OF LUHANSK OBLAST TILL 2025
Till the year 2025, USD 100 million will be invested for implementation of the “Eastern Ukraine: Recover, Reconnect, Revitalize” project (3R), which is aimed at increase of economic opportunity, connectivity, and inclusion of conflict-affected communities through local infrastructure investments at Lugansk Region government-controlled territories.
On September 22, official negotiations between the Ukrainian governmental delegation and representatives of the International Bank for Reconstruction and Development (the World Bank) took place on attraction of funds for implementation of the 3R project. The meeting resulted in the consensus reached on the wording of the Agreement and finalization of the negotiations. The next step will be signing the Loan Agreement by Vice Prime Minister of Ukraine – Minister for Reintegration of Temporarily Occupied Territories of Ukraine Oleksii Reznikov.
The Ukrainian governmental delegation was headed by Ministry for Reintegration represented by Rostyslav Zamlynskyy, First Deputy Minister for Temporarily Occupied Territories of Ukraine. The delegation included representatives of Ministry for Reintegration, Ministry of Justice, Ministry of Economy, the State Consumer Protection Service, Ukravtodor, and Lugansk Region State Administration.
Head of the governmental delegation Rostyslav Zamlynskyy congratulated everyone present with commencement of the official part of the negotiations on the 3R project and stated, “It is highly important for us that this project be prepared jointly with representatives of the World Bank and Lugansk Region State Administration. I would also like to thank our colleagues from Ministry of Finance, Ministry of Foreign Affairs, Ministry of Economy, Ministry of Justice, Ukravtodor, and the State Consumer Protection Service, present here. I wish everyone fruitful cooperation.”
World Bank Program Leader for sustainable development in infrastructure in Ukraine Bahir al-Hifnawi stressed the importance of the work over this project, “The team of the Ministry’s and World Bank’s representatives have cooperated very actively in preparation of this project. The project combines the World Bank’s strong points: agriculture, road construction, and conflict resolution. In its essence, this is an example of the best cooperation between the World Bank and the Government of Ukraine.”
The project envisages rehabilitation of approximately 183 km of roads in Lugansk Region, which constitute key transportation corridors in the region, and attraction of investments for recovery of the agriculture through implementation of separate agricultural sub-projects focused on response to the armed aggression of the Russian Federation for the agricultural sector in the Lugansk Region government-controlled areas.
The 3R project consists of 4 components: reconnect (1), recover (2), revitalize (3) contingent emergency response (4). Under Component 1, attraction of USD 65 million is planned for roads repair and construction, with Ukravtodor being the responsible executor. In total, USD 35 million is allocated for Components 2, 3, 4, with Ministry for Reintegration of Temporarily Occupied Territories being responsible for their implementation.
COMPONENT 1 “RECONNECT”. Investment into roads, with a focus on linking rural communities to processing, market, and services centers.
Rehabilitation of the selected sections of roads for integration of agricultural areas on the Project areas into the main national network of the Borrower’s motorways and into the expanded EU Trans-European Transportation Network, to include the following, among other things:
(a) works performance on associated road infrastructure objects, such as bridges, interchanges, and railway crossings; security measures, local supervision over construction works performance;
(b) acquisition of equipment;
(c) installation of weigh-in-motion complexes and video cameras for traffic speed measurement.
COMPONENT 2 “RECOVER”. Investments into agriculture for facilitation of recovery and upgrade of the sector.
(a) Provision of support in the course of design and construction of the Agricultural Logistic and Services Hub, including provision of technical assistance and training for support its operation and management.
(b) Provision of support on creation of the regional laboratory for testing agricultural products and food safety in Lugansk Region Government-Controlled Areas (further – the GCA).
(c) Provision of support for development of Lugansk Region GCA agricultural areas, including through holding pilot activities to facilitate agriculture development clusters on the community level.
COMPONENT 3 “REVITALIZE”. Creation of a platform for project implementation support.
Creation of a general project implementation platform within Ministry for Reintegration in relation to the Project Components 2 and 3 investments, including, among other things:
(a) creation and functioning of the Project Implementation Group (PIG) at Ministry for Reintegration;
(b) creation of an automated management system with regard to Project Component 2 investments, including management of procurement and finances, implementation of the Environmental and Social Management Plan (ESMP), as well as monitoring and evaluation activities.
COMPONENT 4. Contingent emergency response. Provision of support in case of approach of emergency situations, in accordance with the criteria, if required.
At the session on September 02, 2020, the Cabinet of Ministers approved attraction of the loan in the amount of USD 100 million from the International Bank for Reconstruction and Development (IBRD) for implementation of the “Eastern Ukraine: Reconnect, Recover, Revitalize” Project (3R) and determined the composition of the Ukrainian delegation for participation in the negotiations with the Bank.
The Cabinet of Ministers also authorized Vice Prime Minister of Ukraine – Minister for Reintegration of Temporarily Occupied Territories of Ukraine Oleksii Reznikov to sign the relevant Loan Agreement with the IBRD.
In frames of preparation of the Project, Ministry for Reintegration developed framework documents on environmental and social management, the procedure of labor resources management, as well as the procedure of alienation of land plots and other immovable property located on them, to be applied during implementation of the Project.
The loan is provided for 27 years at 0.25%, with the first 12 years being privileged.