The World Bank’s Board of Executive Directors today approved a $350 million First Economic Recovery Development Policy Loan (DPL) for Ukraine in support of reforms that are critical to economic recovery. According to the press service of the World Bank, the key reforms supported by the DPL include: strengthening land and credit markets by creating a transparent and efficient market for agricultural land and resolving non-performing loans in state owned banks; fostering de-monopolization and anti-corruption institutions including by restructuring the gas sector; bolstering the social safety net for the vulnerable elderly population to cushion the impact of the COVID-19 pandemic.
“The COVID-19 pandemic is resulting in a sharp economic downturn that is hurting the incomes of ordinary Ukrainians and small businesses, and straining the government’s budget. This development policy loan provides $350 million to support budget expenditures at a difficult time. The World Bank welcomes the Government’s commitment to these reforms to prepare the economy for recovery, including the significant steps taken to end the moratorium on agricultural land sales, and to bolster benefits for the vulnerable elderly population,” Arup Banerji, incoming World Bank Country Director for Belarus, Moldova, and Ukraine, said.
This DPL is the first of two planned operations, with the second DPL expected to support the additional important land reform legislation and further strengthen pension benefits for the elderly population.
The development policy loan is part of the World Bank’s stepped-up support to Ukraine to address the impacts of COVID-19 and complements the approval of additional financing of $135 million for the Serving People, Improving Health Project and $150 million for the Social Safety Nets Modernization Project.
Additional support to directly cushion the most vulnerable population from the impact of the pandemic is also under preparation.
Since Ukraine joined the World Bank in 1992, the Bank’s commitments to the country have totaled about $14 billion for more than 80 projects and programs.
PrivatBank (Kyiv) has issued the first refinancing loan under the Affordable Loans 5-7-9% program at 0% per annum until the end of March 2021, the Ministry of Economic Development, Trade and Agriculture said on its website on Tuesday, June 9.
“Under the Affordable loans 5-7-9% updated program, state-owned PrivatBank refinanced a loan to an entrepreneur in the amount of UAH 1.1 million at 0% until the end of March 2021. Partner banks continue to accept applications for new program tools, which were introduced by the government during lockdown measures,” the ministry said in the press release.
However, the demand for loans under such conditions amounted to about UAH 390 million over a week, the Economy Ministry said.
Applications for participation in the program from Credit Agricole Bank and Agroprosperis Bank are being considered, the ministry said.
The European Investment Bank (EIB) will provide a loan for the UNIT.City innovation campus development. The bank said on its website that its Board made the decision at the end of April 2020.
The details about the amount of the loan and the borrower are not disclosed.
Earlier the Ukrainian government said that this concerns a EUR 50 million loan to Unit Holdings LLC.
The EIB said that the project is part of an urban development and comprises the design, renovation and construction of carefully selected sub-projects that are part of the innovation campus. The project includes the extension of a private non-profit IT training facility, multifunctional flexible floor space offering a variety of office accommodation, fablabs, communal and interaction spaces as well as seminar and meeting room spaces for events plus other supporting facilities and infrastructures.
In November 2019, EIB Vice President Vazil Hudak said that a loan for development of UNIT.City could be provided.
UNIT.City Innovation Park officially opened in April 2017 on the territory of the former Kyiv Motorcycle Plant.
Unit Holdings LLC was established in November 2017. The main activity is the development of construction projects. According to the unified public register, participant in LLC is CJSC Dinpero Investments Limited (Cyprus). The ultimate beneficiary is the founder of UFuture holding Vasyl Khmelnytsky.
The Epicenter K company (Kyiv), which is developing a network of shopping centers of the same name and agricultural direction in Ukraine, has received a loan in the Austrian Raiffeisen Bank International AG in the amount of EUR 5.3 million for the development of e-commerce, in particular, the opening of a fulfillment center, the press service of the company said.
“The Austrian bank Raiffeisen Bank International AG will finance the purchase of equipment for the Epicenter K fulfillment center from the Dutch manufacturer Vanderlande Industries B.V.,” the statement reads.
The opening of an innovative fulfillment center will provide a high level of service to online buyers, according to the company.
According to it, the credit line in the amount of EUR 5.309 million is open for five years, the interest rate is set at the six-month rate of EURIBOR plus margin. Insurance coverage is provided by the Dutch government guarantee issued by Atradius Dutch State Business N.V.
The authorized capital of Epicenter K LLC is UAH 158.6 million.
Epicenter K LLC was established in 2003. According to the unified public register of legal entities and private entrepreneurs, the participants in Epicenter K LLC are Oleksandr Hereha (51.3%), Halyna Hereha (47.9%) and Tetiana Surzhyk (0.73%).
The European Investment Bank (EIB) could provide a loan in the amount of EUR 50 million to Unit Holdings LLC for the development of the UNIT.City innovative campus.
According to an explanatory note to the draft Cabinet of Ministers resolution on approval of the letter of the government of Ukraine to the European Investment Bank on the Innovative Campus for Ukraine project, the bank on December 12, 2019 received a request for support from Unit Holdings in the amount of EUR 50 million to finance the development of project documentation and building individual components of the innovative campus.
The government, in turn, plans to approve and send a letter to the bank on the belonging of the financing proposal to the scope of the framework agreement Between Ukraine and the EIB.
The Innovative Campus for Ukraine project is implemented by Unit Holdings within the framework of the goals of the state policy, approved by the Cabinet of Ministers activity program adopted by the parliament in October 2019.
UNIT.City Innovation Park officially opened in April 2017 in the territory of the former Kyiv Motorcycle Plant.
Unit Holdings LLC was established in November 2017. Its core business is the development of construction projects. According to the unified state register, the ultimate beneficiary is the founder of UFuture holding, Vasyl Khmelnytsky.
UFuture is a holding company that combines Khmelnytsky’s business and social projects. It has a diversified portfolio of assets in real estate, infrastructure, industry, renewable energy, pharmaceuticals and IT. The value of UFuture’s assets is estimated at $550 million. The total capitalization of the businesses in which it invested exceeds $1 billion.
The Ukrainian government will propose to the Verkhovna Rada that a EUR 100 million 30-year loan provided by Poland at 0.15% per annum is unlocked. The respective bill was approved at the government meeting on Wednesday. “The loan agreement between the governments of Ukraine and the Republic of Poland entered into force in April 2016. However, due to difficulties with the performance of contracts by Polish enterprises, where Ukravtodor, road services in Lviv and Volyn regions, the State Fiscal Service (the assignee is the State Customs Service) act as customers, in particular with the import and purchase of necessary goods on the territory of Ukraine, the loan takedown amounted to only EUR 5.8 million,” the Finance Ministry said on its website.
The proposed changes clarify the list of operations, goods exempted from taxation, and the settlement of customs payments in Ukraine as part of the implementation of the relevant agreement between the governments of the two countries.
“Under the agreement, Ukravtodor will receive EUR 68 million (for the development of road infrastructure on the approaches to six checkpoints on the Ukrainian-Polish state border), the State Customs Service will get EUR 25 million (for the construction of checkpoints Shehyni, Krakovets, Rava-Ruska), the administration of the State Border Guard Service will receive EUR 7 million (for the reconstruction of seven departments of the border guard service),” the Finance Ministry said.
