Kiev, Aug 26 (IANS): The World Bank's Board of Executive Directors has approved a loan of 500 million US dollars to help with Ukraine's structural and macroeconomic reforms, the bank's press service said in a statement on Wednesday.

The funds will be used to improve Ukraine's public sector governance, business environment, energy sphere and social assistance, said the statement, Xinhua reported.

Commenting on the new financing, Fan Qimiao, the bank's country director for Belarus, Moldova and Ukraine, said that the loan is designed to help Kiev to address the structural challenges that contributed to Ukraine's current economic crisis.

"We are helping Ukraine to implement an urgent set of measures, which will be essential to stabilize the economy, provide quality services to all Ukrainians and return the country to a sustainable growth path," Fan was quoted as saying by the World Bank's press service.

The World Bank would allocate the funds as part of its broader programme designed to support recovery of Ukraine's cash-strapped economy.

In February, the bank promised to loan two billion dollars to the war-torn country in support of its banking, governance, business reform and investment.

The Ukrainian economy, which dropped 6.8 percent last year, is expected to plunge deeper into recession, with government forecasting a contraction of 9.5 percent in 2015.