USA will provide Ukraine with the third tranche of credit guarantees of up to USD 1 billion

Ukraine economy: USA to provide Ukraine with the third tranche

This article discusses provision of the #third tranche of credit guarantees by the #government of #the United States of America to #Ukraine following appointment of the new #Cabinet of Ministers of Ukraine.

Visit our website if you are interested in the #Ukrainian economy or #doing business in Ukraine.

The vice president of the USA Mr. Joe Biden announced that Ukraine will receive the third tranche of credit guarantees of up to USD 1 billion from the government of the United States of America. This was made possible following resignation of the Prime Minister of Ukraine and appointment of the new government, which was the precondition of provision of funds.

In addition, Mr. Joe Biden stated that the USA will continue to give its support, including financial, to Ukraine.

We note that earlier Nippon Export and Investment Insurance, which is an incorporated administrative agency of the Japanese government, agreed to open a credit line for Ukraine in the amount of USD 269 million. These funds will be provided for the purposes of economic stabilization in Ukraine. Previously Japanese government provided a number of preferential loans to Ukraine in support of various projects in relation to implementation of deregulation reforms (approx. USD 300 million), reconstruction of damaged social infrastructure in Donetsk and Luhansk regions (approx. USD 4.2 million), purchase of medication and medical devices by Ukrainian hospitals (approx. USD 8 million), support for charities providing help to people in the zone of Anti-Terrorist Operation (approx. USD 810,000), etc.

In 2015 Ukraine obtained almost USD 11 billion from various lenders. The Cabinet of Ministers announced that in 2016 they expect to attract USD 10 billion under loan agreements with international lenders. The Prime Minister of Ukraine stated that the large portion of such funds will be provided by the International Monetary Fund, World Bank and G7 countries.

We note that the third tranche from the International Monetary Fund was expected in December 2015, but it was postponed for unspecified time. The decision of the Board of Directors of the International Monetary Fund as to whether to continue to provide funding for Ukraine is crucial for other lenders. It is expected that following the positive decision of the International Monetary Fund Ukraine will receive up to USD 2.3 billion from various other lenders.

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