The Government of Ukraine and the Government of Germany have signed a Framework on Financial Cooperation

On December 17, 2020, an official signing of an agreement on financial cooperation between the Cabinet of Ministers of Ukraine and the Government of the Federal Republic of Germany took place.

This is a framework agreement that defines a list of projects, the financing agreements of which were reached by the German government during the Ukrainian-German negotiations in 2011-2019.

The agreement provides for the allocation of a EUR 214.6 million concessional loan*, which will be used for the implementation of investment projects, including support of municipalities, in particular:

- in the energy sector (modernization of substations and the integration of a Ukrainian energy system into the European unified energy system);

- support for small and medium-sized businesses;

- the introduction of energy-efficient measures in public buildings (schools and kindergartens);

- the reconstruction of communal infrastructure in the regions.

In addition, the agreement envisages the provision of grants worth up to EUR 40 million on a gratuitous and non-refundable basis, of which EUR 30.5 million will be used to improve the vocational education system and strengthen local self-government in Ukraine.

The Minister of Finance of Ukraine Sergii Marchenko expressed gratitude to the Government of Germany, the Embassy of Germany in Ukraine, the Credit Institute for Reconstruction (KfW), and personally the Ambassador Extraordinary and Plenipotentiary of the Federal Republic of Germany to Ukraine Anka Feldhuse for the support on Ukraine's path towards economic development and for the long-term cooperation.

"The Agreement on Financial Cooperation signed today between the Governments of Ukraine and Germany will create legal preconditions for the accelerated preparation of projects and transition to their implementation," Sergii Marchenko noted.

He also expressed confidence that the new model for the preparation of Ukrainian development projects, on which agreements had been reached in 2011-2019, proposed by the German side, would contribute to simplifying the procedure for concluding certain loan and grant agreements.

At the signing ceremony, Anka Feldhusen emphasized: "This Agreement provides a solid international legal basis for our further cooperation in the field of finance and development policy. Thus, Germany continues to support major reforms in the areas of decentralization, vocational training and energy efficiency."

Sergii Marchenko noted that the Government of Ukraine, despite the spread of the COVID-19 pandemic and the economic recession in Ukraine, fulfills all international obligations, ensures the stability of the fixed course of reforms, as well as takes measures to minimize the negative impact of the pandemic on economic stability and the lives of citizens.

"Even though joint work on the Agreement has been active for almost 10 months under quarantine and in the online format, we are moving forward and demonstrate a real result. And signing a general Agreement today is only our first step," Sergii Marchenko stressed.

The Minister assured that the team of the Ministry of Finance will maintain this pace during the preparation of the Agreement for ratification by the Parliament of Ukraine.

* Terms of loans by the Government of Germany: term - 30 years, including 10 years grace period at a yield rate of 2% per annum, liability commission - 0.25% per annum.