Ministry of Finance welcomes ratification of agreement with German Government related to project "Municipal climate protection programme ІІ"

1/28/16


The Ministry of Finance welcomes the adoption of the draft Law of Ukraine "On the ratification of the Agreement between the Cabinet of Ministers of Ukraine and the Federal Government of Germany on financial cooperation (funding of 2010 and 2011) under the Municipal climate protection programme ІІ (project "Municipal water supply in Chernivzi, stage 1")”. This Law enables the implementation of the project on municipal water supply in Chernivzi aimed to improve the reliability, efficiency and quality of drinking water production and processing for the residents of this city. The Ministry of Finance is actively working to attract long-term preferential investment loans for the Ukrainian economy, in order to improve the quality of infrastructure and thus the quality of life of our citizens.

The adoption of the above law allows to finalize the internal procedure in Ukraine needed to put into effect the Agreement on financial cooperation with Germany signed on February 6, 2015, and to launch the project on the modernization of the water supply network in Chernivzi.

The project shall help reduce the total water losses in the network to 22% (compared to the current losses of 50-60%) and, accordingly, significantly reduce the water supply costs by reducing electricity consumption, reagents consumption and other operational costs.

Key project data:
• Total value of the Project – EUR 20.5 m;
• Including the loan from the German Government amounting up to EUR 17 m;
• Funding provided by the Ukrainian partners (municipal company "Chernivzivodokanal") – EUR 3.5 m;
• Funding from the Neighborhood Investment Fund (NІF) – EUR 3 m, to be used for the advisory support of the project.

Terms of the loan provided by the German Government:

• Grace period - 10 years;
• Total maturity period - 30 years including 10 years when the preferential interest rate is applied; interest rate per year – 2%;
• Obligation fee – 0.25% p.a. on the non-claimed part of the loan;
• Interest rate for the warranty provided to the Government of Ukraine – 2%.

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