Ukraine raises EUR200 mln from KfW to support Deposit Guarantee Fund
Ukraine has raised a loan of EUR 200 million from Germany's KfW Development Bank to support the Individuals' Deposit Guarantee Fund.
Ukrainian Finance Minister Natalie Jaresko and a member of the Management Committee at KfW Roland Siller signed the agreement on Thursday morning, an Interfax-Ukraine correspondent has reported.
"The agreement will give an opportunity millions of ordinary citizens to receive their deposits from troubled banks within the state guaranteed limit and will also contribute to the recovery of the banking system of our country," Jaresko said during the signing of the agreement.
She said that KfW would provide three more parts of the loan within the total sum of EUR 500 million, which will be sent to the energy sector, infrastructure projects and purchase of goods for these two directions.
Siller said that the major part of the sum (EUR 210-220 million) will be provided by the end of this year.
The Finance Ministry said that the credit rate is less than 2.6% per annum, while according to cabinet resolution No. 640 of August 12 on the conditions of the loan published earlier, the effective rate will be slightly higher as the amount of a one-time payment for loan management will come to EUR1 million, while payment for funds issue will be 0.25% of the non-issued loan amount.
The credit rates will be paid every six months, the payment of the loan principal begins after five years after the funds are raised, and it is to be completed no later than in 15 years after its issue.
As reported, the Verkhovna Rada in mid-July ratified a memorandum on joint intentions between the government of Ukraine and the government of Germany for an unrelated financial loan totaling EUR500 million, which was signed in Berlin on April 1, 2015.
According to the memorandum, the German government intends to provide necessary guarantees for an unrelated financial credit from KfW in the amount of EUR500 million. The funds will be attracted, in particular, for investment in the restoration of part of Ukraine.
KfW was founded in 1948 and it is a government-owned development bank. The bank is one of the largest development banks in the world.
