The Government of Canada has offered to provide a loan of up to CAD 120 million to support the economic stability and development of Ukraine.
“Today, the Honourable Harjit S. Sajjan, Minister of International Development and Minister responsible for the Pacific Economic Development Agency of Canada, and the Honourable Mélanie Joly, Minister of Foreign Affairs, announced that Canada has offered to provide a loan of up to CAD 120 million to the Government of Ukraine to support the country’s economic resilience and governance reforms,” the Government of Canada said in a statement on Friday.
In addition, Canada has also offered to provide a technical assistance grant of up to CAD 6 million to support the implementation of the loan. Canadian and Ukrainian officials are already meeting to discuss the potential terms of the loan and a timeline for its implementation.
“Ukrainians can always count on Canada to be there for them when needed. By working together, we can strengthen the economy and help advance governance reforms. I authorized this proposed loan to support Ukraine’s ability to respond to its population’s needs amid Russia’s aggressive actions. This is just one step in helping build a secure future for Ukrainians, and I will continue to look at ways to support Ukraine,” Sajjan said.
The Government of Canada also said that in 2014 and 2015, the country provided a CAD 400 million (CAD 200 million per year) loan to Ukraine to the then new government to support its economic recovery and development goals, and this loan was fully repaid with interest as scheduled in 2020.
The new assistance is provided under the CAD 620 million sovereign loan program approved in 2018. According to it, the maximum loan term is up to ten years. Principal and interest payments must be made at least once a year, with a possible grace period in certain circumstances, and a fixed rate of interest equal to the cost of the Canadian government loan.
The total amount of loans to the country under this program cannot exceed CAD 120 million.
On January 20, the National Bank of Ukraine said that due to the military threat from Russia, Ukraine’s eurobond rates rose to double-digit stress levels, and the country temporarily lost access to the market for external commercial loans. According to the NBU, in such conditions, the role of financing from international financial organizations such as the IMF and the World Bank, as well as partner countries, increases.
