Ukraine - First Ukraine Jobs and Private Sector Growth Development Policy Operation

Overview & Synopsis

The development objective of the First Ukraine Jobs and Private Sector Growth Development Policy Operation for Ukraine is to enable private sector financing and investment, attract skilled labor to jobs, and advance cross-border market integration. The operation supports policy and institutional reforms across three areas of work. Under enabling private sector financing and investment, it modernizes the public-private partnership and concession framework to accelerate preparation and allow viability gap funding; expands access to finance for firms by establishing a modern legal regime for factoring and strengthening the governance and independence of the National Development Institution to scale market-based support for MSMEs; and reduces the state footprint and corruption risks by mandating corporatization of state-owned enterprises, advancing the privatization of state-owned banks through the selection of sales advisors, and improving SOE oversight. Expected results include approval of five PPP and concession projects, registration of two thousand factoring receivables assignments, increased loan financing facilitated through the National Development Institution, lower average costs of small-value cross-border transfers, the sale of shares in at least one state-owned bank, and two thousand small-scale privatization auctions announced. To attract skilled labor to jobs, the operation establishes a modern housing policy that promotes a market-oriented, energy-efficient, and resilient housing system with a national digital housing information platform; removes barriers for veteran entrepreneurship through legal status, registries, and a service portal; expands cost-effective, inclusive early childcare supply; and reforms vocational education financing and governance by introducing independent supervisory boards and aligning training with employer needs. Expected results include recording housing needs for at least ten percent of communities in the single government system, registration of three thousand veteran entrepreneurship entities, a five percentage point increase in the share of women with children ages zero to three who are actively employed, and one hundred vocational institutions with supervisory boards. To advance cross-border market integration, the operation establishes an agricultural paying agency with EU-aligned digital administration and control systems for transparent and auditable support; harmonizes electricity market mechanisms with EU rules to enable market coupling, strengthen flexibility through access to EU balancing platforms, and enhance resilience and consumer protection; and restores a modern monitoring, reporting, and verification system for greenhouse gas emissions with standardized procedures and a public digital registry that can underpin a future emissions trading system and support CBAM compliance. Expected results include tracking sixty percent of agricultural support through the Area Monitoring System, a fifteen percent increase in cross-border energy trade, and annual greenhouse gas reporting by sixty percent of production sites covered by the national MRV system. Collectively, these reforms reinforce macro-structural resilience, align with EU accession requirements and Paris Agreement objectives, and are designed to crowd in private capital, create jobs, and improve transparency and service delivery in a high-risk environment.