On March 4, Minister of Finance of Ukraine Natalie Jaresko and Extraordinary and Plenipotentiary Ambassador of Japan to Ukraine Shigeki Sume attended a joint press briefingt to report abouta new long-term loan from Japan to Ukraine amounting USD 300 mln.
This loan became possible due to the enactment of the Agreement on the second loan for economic reforms under the joint project with the World Bank «Development Policy Loan». Thus the financial aid from Japan to Ukraine will total USD 1.85 bln including approx. USD 1 bln assigned for the overhaul of the aeration station in Bortnychi.
«We have ongoing debates in Ukraine on the progress of reforms. Financial aid for Ukraine from ist partners is a clear answer to this question: governments of other countries would not support us, if they did not see any reforms going on», Minister of Finance Natalie Jaresko said.
One of the conditions for Ukraine to receive this loan was to finalize 10 structure reforms including the liquidation of taxation gaps by implementing electronic VAT administration, reform of the gas market, establishment of effective control mechanisms for budget revenues as well as for budget expenses. To implement those reforms, the powers of the General Accounting Office were expanded etc.
«I wanted to conduct this press conference to tell you that the Government of Japan is convinces that the people and the Government of Ukraine are making real efforts to implement successful reform», Ambassador of Japan to Ukraine Shigeki Sumi said.
USD 300 mln which Ukraine is expecting to receive as a signle tranche after the enactment of the Loan Agreement in the end of March will be transferred to the state budget of Ukraine to finance key areas including social welfare and the most important reforms.
Key facts about the loan:
• duration – 20 years with a 6-year grace period, during which Ukraine won’t have to make loan re-payments;
• the interest rate is equal to Libor + 0.05%, which is less than 1% p.a.