REUTERS

Ukrainian President Volodymyr Zelensky says the European Union has provided Ukraine with EUR 600 million in macro-financial assistance.

"I'm grateful to our European partners and personally to the President of the European Commission Ursula von der Leyen and Vice-President of the European Commission Valdis Dombrovskis for the disbursement of EUR 600 million in macro-financial assistance to Ukraine," he wrote on Twitter on December 9.

Read alsoUkraine plans to get US$300 mln loan from World Bank to tackle pandemic falloutIt's a strong signal of the European Union's support for economic stability and the further course of reforms in Ukraine, he added.

"Ukraine received the first tranche under a new EU macro-financial assistance program from the European Commission with a nominal amount of EUR 600 million in the form of a long-term loan with a repayment period in June 2035 and at a yield rate of 0.125% per annum. To provide the tranche, the European Commission issued bonds with a negative yield of -0.143%, due to which, after deducting the issuance commissions, Ukraine received EUR 623.5 million," the Finance Ministry's press service said on its website on December 9.

"We are grateful to the European Commission for its support, which is certainly another reflection of the friendly and strategic partnership between Ukraine and the European Union. The funds received will be used to finance state budget expenditures, which will help to maintain financial stability in Ukraine," the press service quoted Finance Minister Serhiy Marchenko as saying.

These funds have been received by Ukraine in the framework of the Fifth Program, implemented under the Memorandum of Understanding and the Loan Agreement with the EU (for receiving EU Macro-Financial Assistance to Ukraine of up to EUR 1.2 billion ), concluded by the parties in Brussels on July 23, 2020.

"All of these funds, in accordance with the terms of the relevant memorandums with the European Union, were used to reduce external financial pressure on Ukraine, improve its balance of payments and meet budgetary requirements," the report said.

Ukraine is currently in the process of fulfilling the implementation of the relevant obligations defined in the Memorandum in order to receive the 2nd tranche worth EUR 600 million through the implementation of structural reforms in the following spheres: public finance management; good governance and the rule of law; improving the business climate; and sectoral reforms and state-owned enterprises.

Background

  • Earlier, Ukraine's Infrastructure Ministry said it plans to raise US$65 million in loan from the International Bank for Reconstruction and Development and EUR 100 million from the European Investment Bank (EIB) to repair 183 kilometers of roads in the country's Luhansk region as part of a new project, titled "Eastern Ukraine: Reconnect, Recover, Revitalize."
  • On July 23, 2020, Prime Minister Denys Shmyhal, during his visit to Brussels, signed a Memorandum and a Loan Agreement on the allocation of macro-financial assistance worth EUR 1.2 billion to Ukraine from the European Union.
  • On December 8, 2020, Ukrainian Finance Minister Serhiy Marchenko said the ministry would like to reduce the country's dependence on external credit resources.
  • On the same day, the Cabinet of Ministers recognized it expedient to attract EUR 340 million in loan from the European Investment Bank for the implementation of the project "Ukraine recovery program."
  • On December 9, the EIB and the Ukrainian government signed three loan agreements, totaling EUR 640 million, to implement priority projects in the country's transport and infrastructure sectors.