Ukraine has received a long-term loan at preferential terms from Japan amounting $331 million. The loan is part of the joint project with the World Bank “Development Policy Loan-II” (DPL-II) and comes from the Japanese Agency for International Cooperation.
This loan provided at preferential terms is a proof that Ukraine is actively implementing important structural reforms for its economy. Receiving of such a loan became possible due to implementation of 10 structural reforms including the liquidation of “loopholes” in the tax system by introducing electronic VAT administration, reform of the gas market as well as establishing efficient control mechanisms not only for the expenses, but also for the revenues of the state budget (with this purpose, the powers of the Court of Audit were expanded) etc.
The loan from Japan will be transferred to the general fund of the state budget and will be used for financing the key needs of Ukraine including social expenditures and implementation of reforms.
Key facts on the loan:
∙ duration – 20 years with a six-year grace period when Ukraine will not be making any payments to the creditor;
∙ interest rate – Libor + 0.05%, which is less than 1% p.a.;
∙ payments to the creditor are to be effected twice a year.