The Ministry of Finance Welcomes the Ratification of the Framework Agreement between the Governments of Ukraine and the Kingdom of Denmark
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On June 16, 2020, the Parliament of Ukraine ratified the Framework Agreement between the Governments of Ukraine and the Kingdom of Denmark on the implementation of the Danida Business Finance Program in Ukraine (DBF). 334 Members of Parliament voted for the decision.
The DBF Program is implemented by the Danish government within the development cooperation and provides interest-free loans to finance projects in the areas of renewable energy and energy efficiency, water supply and wastewater treatment.
The Program provides for funding for the government agencies, utility companies and other businesses operating in the following areas:
• heat supply;
• wind energy;
• improving the network and increasing its capacity;
• drinking water supply;
• water treatment facilities;
• technologies for providing free water supply.
Under the Danida Business Finance Program, interest-free loans will be provided on the following terms: maturity of up to 10 years after the end of the project, the currency of the loan is Euros or US dollars, covering is up to 100% of the project's cost.
"Ratification of the Agreement opens Ukraine access to concessional loans. We expect that the Danida Business Finance Program will allow us to implement long-term infrastructure projects, improve public infrastructure and create new jobs," - said Vasyl Shkurakov, Deputy Minister of Finance.
Only commercially unprofitable projects are eligible for funding under the DBF. Projects must comply with the development strategies and sectoral plans of the beneficiary country, be aimed at ensuring sustainable development and employment assistance, especially investment in municipal infrastructure.
The implementation of the Program will alleviate the terms of credit through a subsidy from the Government of the Kingdom of Denmark to reimburse interest payments for the entire period of credit, export credit premium and banking commission. Also, the DBF Program provides for the opening grants and technical assistance to help with the preparation of projects, as well as the facilitation of intergovernmental cooperation to transfer knowledge to relevant sectors.
Financing will be provided by a commercial bank or financial institution with a representative office in Denmark lending to the government of Ukraine or Ukrainian businesses under state guarantees.