World Bank to lend $400 Mln to Ukraine for financial rehabilitation
KYIV. Sept 18 (Interfax) - An agreement on the extension of a 30-year World Bank loan worth $400 million to Ukraine for the rehabilitation of the country's financial sector was signed in Kyiv on Friday.
The agreement was signed by Economics Minister Bohdan Danylyshin on the Ukrainian side and by the World Bank's director for Ukraine, Belarus and Moldova Martin Reiser.
The loan is the first tranche in a $750 million loan program with a five-year grace period and a six-month Libor +0.17% interest rate.
The extension of the second tranche will depend on how fast the implementation of the program will go, and its size could be revised.
"It is an extremely soft project which is extremely favorable for our country as it envisions repayment in equal parts. So we will have a chance to carry out systemic reforms in the grace period too," Danylyshin said after the agreement was signed.
Hopefully the loan will enhance trust in the banking system in Ukraine and lay the groundwork for a resumption of economic restructuring in the post-crisis period, Reiser said.
The economics minister also said that the World Bank was discussing a package of systemic investment projects that could be implemented in 2009-12, and the funding for them could amount to $5.4 billion.
"It is a project to perfect roads and improve the traffic safety, of which $400 million is to be spent. We have also discussed a project to rehabilitate hydroelectric plants, with additional resources drawn," the minister said.
The dollar is tied to the hryvnia at $1/8.0065.