The Agreement between the Cabinet of Ministers of Ukraine and the Government of the Federal Republic of Germany on financial cooperation was solemnly signed today.
This is a Framework Agreement that defines a list of projects having agreed to be financed by the Government of Germany during the Ukrainian-German negotiations throughout 2011-2019.
The Agreement provides for the provision of preferential credit resources * in the amount of up to EUR 214.6 million to be used to implement investment projects, including to support municipalities, in particular:
- in the energy sector (modernization of substations and integration of the Ukrainian energy system into the European integrated energy system);
- support for small and medium-sized enterprises;
- implementation of energy efficiency measures in public buildings (schools and kindergartens);
- reconstruction of communal infrastructure in the regions.
In addition, the Agreement envisages the provision of up to EUR 40 million on a gratuitous and non-refundable basis - in the form of grants, of which EUR 30.5 million will be directed to improve the vocational education system and strengthen local self-government in Ukraine.
The Minister of Finance of Ukraine Serhii Marchenko thanked the Government of Germany, the Embassy of Germany in Ukraine, the Credit Institute for Reconstruction (KfW), and personally the Ambassador Extraordinary and Plenipotentiary of Germany to Ukraine Ms. Anka Feldhuzen for the support on Ukraine's path towards economic development and for the long-term cooperation.
"The Agreement on Financial Cooperation signed today between the Governments of Ukraine and Germany will create legal preconditions for accelerated preparation of projects and transition to their implementation," Serhii Marchenko stressed.
He also expressed confidence that the new model of preparation of Ukraine's development projects proposed by the German side, basing on which agreements had been reached back in 2011-2019, would help simplify the procedure for concluding separate loan and grant agreements.
At the signing ceremony, Ms. Anka Feldhuzen emphasized: "This Agreement lays a solid international legal basis for our further cooperation in the field of finance and development policy. In this way, Germany continues to support major reforms in the areas of decentralization, vocational training and energy efficiency."
For his part, Serhii Marchenko noted that the Government of Ukraine, despite the spread of the COVID-19 pandemic and the economic recession in Ukraine, is fulfilling all international obligations, ensuring the stability of the fixed course of reforms, and taking measures to minimize the negative impact of the pandemic on economic stability and the well-being of citizens.
"Despite the fact that joint work on the Agreement has been active for almost 10 months amid quarantine restrictions and in online format, we are moving forward and demonstrate a real result. And signing a general agreement today is only our first step," Serhii Marchenko stressed.
The Minister assured that the team of the Ministry of Finance will maintain this pace during the preparation of the Agreement for ratification by the Verkhovna Rada of Ukraine.
* Terms of loans provided by the Government of Germany: term - 30 years, including 10 years grace period; interest rate - 2% per annum, liability commission - 0.25% per annum.