Minister of Finance Oleksandr Danyliuk signs a loan agreement amounting 150 million Euro for the development of the energy supply infrastructure

10/10/16

Minister of Finance Oleksandr Danyliuk and General Manager of the German State Development Bank KfW Eva Witt have signed a loan agreement amounting 150 million Euro for the development of the energy supply infrastructure.

What does it give?

The loan will be spent for the overhaul of 4 transformer substations supplying electricity to 5 regions with approx. 14 million residents. It means that citizens in Kharkiv, Zaporizhya, Dnipropetrovsk, Lugansk and Donetsk regions will have a better electricity supply.\

Why is it important?

This loan is very important for the recovery of cooperation with Germany. These 150 million Euro are a part of the loan package totaling 500 million Euro which was agreed with Germany in the beginning of 2015. In the course of two years Ukraine only received 200 million Euro from this package.

Today’s agreement became possible due to the active participation of the Ministry of Finance. Minister of Finance Oleksandr Danyliuk discussed the agreement with the management of the KfW as well as with Federal Minister of Finance Wolfgang Schäuble on August 30 in Berlin and on October 6 in Washington.

“This is our systemic approach to cooperation with international partners – we are tackling overdue problems and removing their defects to make the most of the funding which we receive”, the Minister of Finance said.

Additional information:

• the agreement was signed during the meeting of the Ukrainian-German High-Level Group for Economic Cooperation;
• the loan will be used for a commercial investment project;
• the loan shall be returned by the state company “Ukrenergo” which is directly responsible for the overhaul works;
• the costs for the re-payment of the loan will be included in the rate for the transfer of electricity via power transmission lines including international power transmission networks;
• maturity period of the loan – 15 years (including 5 years of the grace period);
• interest rate – 3.97%.

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