The Government of Ukraine and the Japan
International Cooperation Agency (JICA) have signed a Loan Agreement worth
¥108.193 billion yen (approximately $870 million at current exchange rates) for
the ‘Bortnychi Sewage Treatment Plant Modernization Project’. Minister of
Finance Natalie Jaresko signed the agreement on behalf of the Government
of Ukraine; with Mr. Masakazu Ichikawa, Vice-President of JICA,
signing on behalf of the Government of Japan.
Through the development and modernization of the
facilities at the Bortnychi Sewage Treatment Plant, the project will
improve sewage treatment in Kyiv city and contribute to the improvement of
public health and living conditions of its citizens. The modernization is
urgently required to improve treatment capacity, as well as environmental
conditions in surrounding areas. The loan will be allocated for the
construction and renovation of wastewater treatment facilities, sludge
treatment facilities, sludge incinerators, as well as expert consultant
services.
“Today’s loan agreement on the ‘Bortnytchi Sewage
Treatment Plant Modernization Project’ will improve the lives of some 3 million
people in Ukraine. We will use Japanese finance, technology and equipment to
rebuild and modernize the plant’s aging facilities, and develop new aeration
systems. In doing so, this project will help us face the urgent environmental
challenges, and improve energy efficiency,” Natalie Jaresko stated.
“I hope the project will contribute to improving
the living environment of Ukrainian people and enhance stronger ties between
Ukraine and Japan,” Mr Ichikawa said.
The Bortnychi Project loan is just one
pillar of Japanese financial support for Ukraine, which totals as much as $1.5
billion. Since the Revolution of Dignity Japan has continuously supported
Ukraine. In 2014, Japan provided $100 mln of fiscal support and in 2015
this support was increased by additional $300 mln tied to the World
Bank’s 'Development Policy Loan (DPL)'. Minister Jaresko: “This money
will help Ukraine meet its urgent budget needs, stabilize the economy of the
country, and tackle current challenges through the introduction of reform
policies”. In addition, Japan has
provided Ukraine with humanitarian, technical, and expert support.
The agreement comes in the wake of a series of
recent positive developments, reflecting the growing international support and
acknowledgment of Ukraine’s efforts to return to economic growth in 2016. On
May 18, the governments of Ukraine and the United States signed a $1 billion
Loan Guarantee Agreement. On May 22, Ukraine and the European Union signed the
Memorandum of Understanding and the Loan Agreement related to the third
Macro-Financial Assistance (MFA) package from the EU totaling €1.8 billion.
This financial support will help Ukraine to replace its external debt with less
expensive, and more long term support, helping decrease the debt burden on the
Ukrainian budget over the coming years, stabilize its economy and return to the
economic growth beginning with 2016.
Key facts about the Loan Agreement and Bortnychi Sewage
Treatment Plant Modernization Project:
- Bortnychi Sewage Treatment Plant was
constructed between the 1960’s – 1980’s, and treats all of the sewage for Kyiv
city. Treatment functions have suffered in recent years due to the plant’s
increasingly aging facilities.
- the terms of the Loan:
Rate of interest: 0.1% per annum
Payment period: 40 years, including a
10-year-grace period
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