Germany to Provide €50 Million Loan to Ukraine to Refinance Small and Medium-Sized Businesses
On 30 November, the German Credit Institution for Reconstruction (KfW) signed a €50 million grant agreement with Ukraine to refinance the Affordable Loans 5-7-9% programme. This was reported by the Ministry of Finance of Ukraine.
The money is to reimburse the costs of compensating interest rates on loans for Ukrainian small and medium-sized businesses.
"The operation of enterprises is an important component of Ukraine's financial stability and economic security in times of war. EUR 50 million of KfW's grant funds will make a significant contribution to improving the existing financial support programmes for businesses. The funds will be used to refinance the costs of the Affordable Loans 5-7-9% Programme, which will allow us to continue to provide small and medium-sized businesses with access to concessional lending," said Sergii Marchenko, Minister of Finance of Ukraine, during the signing ceremony.
He also expressed his gratitude to the German government for its cooperation and systematic support of Ukraine.
"The German government continues to support Ukraine with further grants. We are pleased to continue our cooperation with Ukraine to support entrepreneurship in times of war. Last year, KfW provided EUR 150 million for the 5-7-9 programme, and now we are pleased to extend our support by an additional EUR 50 million. These funds are an important part of the German-Ukrainian development cooperation, which will amount to more than €600 million in 2023 alone," said Ulrike Hopp-Nishanka, Head of BMZ Ukraine.
At the meeting, the Ukrainian and German parties also discussed the mechanisms for implementing the Ukraine Facility programme, bilateral cooperation between the Governments of Ukraine and Germany within the framework of projects of the German Society for International Cooperation (GIZ) and further joint steps in the preparation of an intergovernmental Framework Agreement on Financial Cooperation.
In September, the Cabinet of Ministers expanded the mechanisms of state support for business under the Affordable Loans 5-7-9% programme.
In particular, support for recycling and energy efficiency projects throughout Ukraine and for businesses in the de-occupied territories was strengthened. Also, mechanisms of state support under factoring agreements have been introduced to stimulate the development of domestic production.
As The Gaze previously reported, Germany will contribute an additional €11.5 million to the NATO-Ukraine Trust Fund.