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COVID-19 pandemic,” the Bank’s Board of Executive Directors reported from Washington. The loan is designed to get “fast cash transfers to individuals and households who have lost their jobs or income sources because of the pandemic,” the Bank said. “According to World Bank estimates, 60% of the Ukrainians who may fall into poverty because of the COVID-19 outbreak do not currently benefit from any existing social protection program.” The money follows a similar $150mn loan approved last April under the Bank’s Covid-19 ‘Social Safety Nets’ project.
Ukraine received the first tranche under a new EU macro-financial assistance program from the European Commission with a nominal amount of €600mn in the form of a long-term loan with a repayment period in June 2035 and at a yield rate of 0.125% per annum, the Ukrainian Ministry of Finance announced on its website on December 9.
The European Commission issued bonds with a negative yield of -0.143% to fund the loan, due to which, after deducting the issuance commissions, Ukraine received €623.5mn.
"We are grateful to the European Commission for its support, which is certainly another reflection of the friendly and strategic partnership between Ukraine and the European Union. The funds received will be used to finance state budget expenditures, which will help to maintain financial stability in Ukraine," said Sergii Marchenko.
As bne IntelliNews reported Ukraine is desperately short of money after its $5bn International Monetary Fund (IMF) Stand by agreement (SBA) has been de facto suspended following the a decision by the Constitution Court to nix key anti-corruption laws last month that has come close to sparking a constitution crisis. Ukraine can muddle through the rest of this year and the first half of next year thanks to the some $26bn in reserves but it has an $11bn debt repayment surge in the third quarter it will be unable to finance without help from the IMF.
The new macro stability loan was received by Ukraine in the framework of the Fifth Program, implemented under the Memorandum of Understanding and the Loan Agreement with the EU (for receiving EU Macro-Financial Assistance to Ukraine of up to €1.2bn ), concluded by the parties on July 23, 2020 in Brussels, according to MinFin.
“At present, the total amount of EU concessional loan assistance received by Ukraine under the implementation of five macro-financial assistance programs during 2014 - 2020 has reached €4.41bn,” the ministry said.
“All of these funds, in accordance with the terms of the relevant memorandums with the European Union, were used to reduce external financial pressure on Ukraine, improve its balance of payments and meet budgetary requirements,” the ministry added.
Ukraine is currently in the process of fulfilling the implementation of the relevant obligations defined in the Memorandum in order to receive the seoncd tranche (€600mn) (which can be provided in three months after receiving the first tranche) due to the need for Ukraine to fulfil eight special conditions (on the implementation of structural reforms) in the following spheres:
36 UKRAINE Country Report January 2021 www.intellinews.com
