You're reading: Ukraine will raise up to 200 million euros from KfW to support Deposit Guarantee Fund

Ukraine will raise a loan of up to 200 million euros from KfW to support the Individuals' Deposit Guarantee Fund.


According to Cabinet decree No. 640 of Aug. 12, the interest rate of the loan will be 4.5 percent per annum, however the effective rate will be slightly higher as the amount of a one-time payment for loan management will come to 1 million euros, while payment for funds issue will be 0.25 percent of the non-issued loan amount.

According to the document, interest income will be paid every six months, the payment of the loan principal begins after 5 years after the funds are raised, and it is to be completed no later than in 15 years after its issue, according to the approved conditions.

The Cabinet authorized Minister of Finance Natalie Jaresko to draw the loan.

The Finance Ministry clarified that a loan agreement is to be signed in the morning on September 3 in Kyiv in the presence of German Ambassador to Ukraine Christof Weil.

As reported, the Verkhovna Rada in mid-July ratified a memorandum on joint intentions between the government of Ukraine and the government of Germany for an unrelated financial loan totaling 500 million euros, which was signed in Berlin on Apr. 1, 2015.

According to the memorandum, the German government intends to provide necessary guarantees for an unrelated financial credit from KfW in the amount of 500 million euros. The funds will be attracted, in particular, for investment in the restoration of part of Ukraine.