In Berlin, a guarantee agreement was signed between the German and Ukrainian sides for a loan of 30.4 million euros. These funds from the German government will be directed through the German Development Bank (KfW) to enhance the reliability of Ukraine's energy infrastructure, according to the Ministry of Finance of Ukraine.
The relevant agreement was signed on June 10 on behalf of the Ukrainian government by the Minister of Finance Serhiy Marchenko.
"The signing took place in the presence of the Minister of Energy of Ukraine Herman Halushchenko, the Director-General for Neighborhood and Enlargement Negotiations at the EU Gert Jan Koopman, and representatives of the German government," the ministry said.
It is noted that the credit agreement was concluded by the Chairman of the Board of the National Energy Company Ukrenergo Volodymyr Kudrytskyi and representatives of KfW - the member of the Board Christian Laibach and the Director for the Eastern Europe, Caucasus, and Central Asia region Veronika Garcia del Arco.
What does the agreement entail
The loan term is 30 years, according to the terms, with the first 10 years being a grace period.
The interest rate for the loan is 2% per annum, as reported by the Ministry of Finance.
Direction of the money
According to Kudrytskyi, the received loan funds will be used to reconstruct one of our substations in the western region.
"After modernization, it will be a high-tech automated facility that meets ENTSO-E requirements for the reliability of the power transmission system and network security," said the head of Ukrenergo.
Additionally, he added, the provided funding will help purchase expensive high-tech equipment for substations that were damaged during rocket and drone attacks by the enemy.
The Ministry of Finance noted that since the beginning of the large-scale military aggression by the Russian Federation against Ukraine, the German government has allocated 1.55 billion euros for budget support, of which 1.25 billion euros are grants and 0.3 billion euros are loans.
About a month ago, it became known that Germany would provide Ukraine with a grant of 45 million euros to restore the energy sector after the Russian attacks.
Recently, the Ministry of Energy announced that Estonia will transfer an additional 400,000 euros to the Energy Support Fund for Ukraine.