The Government Ensures the Implementation of the Agreement with Denmark on Financing Projects in the Areas of Renewable Energy and Energy Efficiency, Water Supply and Wastewater Treatment

On November 11, the Cabinet of Ministers adopted a draft resolution "Some issues of implementation of the Framework Agreement between the Government of Ukraine and the Government of the Kingdom of Denmark regarding the general conditions and procedures, organization measures and financial conditions of the implementation of the Danida Business Finance Program in Ukraine” developed by the Ministry of Finance.

The Government's decision will ensure the implementation of provisions of the Framework Agreement in terms of defining responsible bodies, procedures for selecting and implementing projects under the Danida Business Finance (DBF) Program in Ukraine, which will allow raising funds for investment projects aimed at sustainable development and economic growth of Ukraine.

It should be noted, that on June 16, 2020 the Parliament of Ukraine has adopted the Law of Ukraine ”On the ratification of the Framework Agreement between the Government of Ukraine and the Government of the Kingdom of Denmark regarding the general conditions and procedures, organization measures and financial conditions of the implementation of the Danida Business Finance Program in Ukraine”.

The DBF Program is implemented by the Danish government within the development cooperation and provides interest-free loans. Assistance is provided to developing countries to finance projects in the areas of renewable energy and energy efficiency, water supply and wastewater treatment.

Financing is 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.

DBF will ease the terms of a loan by providing assistance, which includes a subsidy in the form of interest payments for the entire lending period, export credit premium and bank margin.

According to Article 7 of the Framework Agreement, the Government of Ukraine should determine the procedure for selecting projects to be financed. The responsible central executive authority of Ukraine (Ministry), which may be determined by the Government of Ukraine, will submit to the DBF projects proposed for financing in each individual case. The Ministry jointly with DBF will select projects from the submitted.