Brussels – Ukraine and the European Union have signed an agreement on the provision of €610 million in macro-financial assistance to Kyiv.
A memorandum of understanding between Ukraine, as a borrower, and the EU, as a creditor, and a loan agreement between Ukraine, as a borrower, the National Bank of Ukraine (NBU), as an agent of the borrower, and the European Union, as a creditor, were signed during the EU-Ukraine summit in Brussels on Monday.
Ukrainian Finance Minister Yuriy Kolobov, NBU Governor Ihor Sorkin and Vice President of the European Commission Olli Rehn signed the documents.
The memorandum of understanding envisages the allocation of tranches of €100 million, €10 million, €250 million and €250 million.
The document also lays down the conditions for the allocation of the funds. The first tranche will be provided after the entry of the memorandum and the loan agreement into force and the European Commission’s conclusion about the satisfactory implementation of the arrangement with the IMF by Ukraine.
Subsequent installments will be allocated depending on whether the Ukrainian government meets the criteria set out in the memorandum in the areas of public finance management, trade, energy, and the implementation of the tax policy and fiscal policy.
The assistance program is designed for two years from the moment of the memorandum’s entry into force.
The loan agreement gives the technical aspects of the provision and repayment of the loan. In particular, the repayment period is 15 years. The loan agreement will enter into force upon the receipt by the European Commission of an official report by the minister of justice of Ukraine on the fulfillment of the constitutional and legal conditions for its entry into force. At the same time, the document shall take effect not later than twelve months from the date of its signing.
