Germany would provide a loan of up to EUR 32.5 million to Ukraine for the period of up to 30 years and the grace period of 10 years under the second phase of the project on increase of energy efficiency in power transmission (modernization of transformer substations) by the end of this year, the Economic Development and Trade Ministry of Ukraine reported on Tuesday.

"The project is intended to increase quality of power supply thanks to restoration of transformer substations and strengthening power lines," the ministry said.

The ministry said that the agreements were reached during a visit of a ministry's delegation to Berlin on November 3 and November 4 and negotiations with representatives of Germany's Federal Ministry for Economic Cooperation and Development, KfW Bankengruppe and GIZ.

The total volume of the financial assistance from Germany to be provided by the end of 2016 would be EUR 72 million, the head of the Ukrainian delegation and Deputy Economic Development and Trade Minister Maksym Nefyodov said.

Some EUR 16 million is provided for developing democracy, civil society, public administration, regional development and decentralization, EUR 36 million for energy efficiency and EUR 20 million to build and reconstruct houses for internally displaced persons (IDPs).

Along with this loan, up to EUR 24.5 of financial assistance million would be provided as grants for support of the implementation of projects aimed at strengthening Ukrainian local self-government, construction and reconstruction of houses for IDPs, and the rest of the funds is technical assistance for decentralization, public administration reforms and local energy efficiency projects.

The ministry said that since 2002, Germany has provided EUR 500 million of assistance to Ukraine.