Germany will provide a loan of EUR 300 million to Ukraine

Ukraine economy: Germany to loan EUR 300 million to Ukraine

This article discusses allocation of a #loan to #Ukraine by the #Federal Republic of Germany through its #state financial institutions and plans of the #Ukrainian Government on how to use this loan.

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Following the meeting with the German Minister for Economic Cooperation and Development, the Prime Minister of Ukraine announced that Germany is going to issue a loan of up to EUR 300 million to Ukraine. The funds will be distributed for modernization and repair of the energy sector, infrastructure objects and railway, including in Donbas region.

The Minister of Regional Development, Construction, Housing and Utilities of Ukraine stated that EUR 150 million will be dedicated to the energy sector, EUR 80.67 million will be spent on infrastructure projects and EUR 60 million shall be used for modernization of locomotives.

The Minister said the delegation of Kreditanstalt für Wiederaufbau (KfW), a German state bank for development, will arrive to Ukraine on 4 July 2016 in order to settle down all formalities in relation to provision of the loan.

We note that the memorandum on joint intentions of the Government of Ukraine and the Government of Germany in relation to provision of a loan of EUR 500 million to Ukraine was signed in late 2015. KfW executed a framework agreement on allocation of individual loans to Ukraine under the Untied Loan Guarantees of the Federal Republic of Germany.

We note that on 16 March 2016 the Verkhovna Rada of Ukraine ratified the Agreement between the Government of Ukraine and the Government of the Federal Republic of Germany on establishment of the German-Ukrainian Chamber of Commerce and Industry. The Agreement was approved on 23 October 2015 at the Ukrainian-German business forum in Berlin. The main intentions of the parties upon signing of this Agreement were creation of means for development of trade and economic relations between German and Ukrainian entities with mutual protection of business interests in both countries.

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