The agreement, under which the International Bank for Reconstruction and Development (IBRD) will provide $200 million for the Program-for-Results on Accelerating Private Investment in Agriculture, was signed on Tuesday by Ukrainian Finance Minister Oksana Markarovva and World Bank Country Director for Belarus, Ukraine and Moldova Satu Kahkonen.
The Finance Ministry said on its website that the attraction of the loan would allow creating a public agricultural register and open access to it, conduct stocktaking for state-owned land and place information about it in the public land cadastre, create methods for developing land utilization plans for amalgamated territorial communities and produce topographic maps of Ukraine via satellite mapping.
In addition, the loan would allow creating the unified automated system for notifying all the sides regarding changes in the public land cadastre, and strengthening the public control system on the state border of Ukraine, taking into account EU requirements.
The project will be implemented as part of the government strategy and action plan for leveraging private investment in agriculture until 2023.
Ukraine has attracted a loan of EUR 349.3 million from Deutsche Bank under the guarantee of the International Bank for Reconstruction and Development (the IBRD, the World Bank structure), according to the website of the Ministry of Finance.
According to the ministry, the funds were received in two tranches: an A tranche in the amount of EUR 53.2 million with a maturity of four years and a B tranche in the amount of EUR 296.1 million with a maturity of ten years (four years and six months after the funds are raised, the loan is subject to gradual repayment in certain amounts every six months).
Part of the guarantee of $375 million in euro equivalent of the World Bank’s total guarantee in the amount of $750 million was used for the loan.
The Ministry of Finance also said that attracting another loan under the unused part of the World Bank guarantee is expected in the first quarter of 2019.
As reported, the World Bank Board of Executive Directors on December 18, 2018 approved the provision of guarantees to Ukraine in the amount of $750 million in support of state policy.
According to a press release from the World Bank, this guarantee will help Ukraine attract about $1 billion in international markets to the national budget.
Ukrainian President Petro Poroshenko has signed a bill on the ratification of the Guarantee Agreement (a draft access to long term finance project) between Ukraine and the International Bank for Reconstruction and Development (IBRD) passed by the Verkhovna Rada on April 5. “The agreement creates a legal framework for the development of cooperation between the parties, involving long-term investment resources in the economy of Ukraine in the amount of $150 million under state guarantees. The document calls for Ukreximbank to receive loans from the International Bank for Reconstruction and Development to provide Ukrainian small and medium-sized enterprises (SME) with medium and long-term financing for production needs: investment lending and working capital financing,” the press service of the President of Ukraine said last week.
The implementation of the access to long term finance project will have a positive impact on the development of SME, expansion of production capacities of the real sector, preservation of existing and creation of new jobs.