The European Investment Bank approved a loan of 1,590 million euros
(US$1.59 billion) for Ukraine to cover some of the urgent expenses and bills of the country as it struggles to find resources five months after the Russian invasion.
(You might be interested in: Russia accuses the West of ‘exaggerating’ the crisis stemming from the war in Ukraine)
Russian attacks in Ukraine.
The package, approved by the EIB’s board of governors on Monday, “will address Ukraine’s most urgent financing needs and ensure that the country can continue to perform its most critical functions, including the rapid reconstruction of social infrastructure facilities,” he said. Werner Hoyer, president of the European Union’s lending arm, in a statement.
(It might interest you: Ukraine is getting ready to start grain exports despite the attacks)
The emergency package was delayed because European Commission officials responsible for the EU budget increased guarantees to support the
loan in case Ukraine defaults.
Ukraine needs about $5 billion a month to pay salaries and other running costs.
The EU budget guarantees EIB loans for operations outside the EU, with provisions usually amounting to 9% of the total financing.
But in this case, the executive arm of the EU asked for provisions at 70% as it already did with a recent macro-financial aid of 1,000 million euros for kyiv.
A commission official said the EU needs to make sure it can absorb losses in the event of Ukraine’s default.
The worsening financial conditions of the Ukrainian economy have complicated discussions about aid plans, as donors have to provide more guarantees in case the country goes bankrupt.
The commission managed to agree only a first €1bn tranche of a proposed €9bn package, as it failed to convince Germany
to provide more supplies.
![Ukraine](https://www.eltiempo.com/images/1x1.png)
The Russian invasion of Ukraine began at the end of last February.
Berlin is pushing for a smaller guarantee contribution to reflect some grants offered to the war-torn nation through the International Monetary Fund.
A group of the country’s creditors agreed to suspend payments on the nation’s debt until the end of 2023 as kyiv had requested.
The terms of the EIB’s concessional credit line provide for mostly scheduled repayments over 15-30 years and a grace period of at least four years, according to a person familiar with the matter.
INTERNATIONAL WRITING
*With information from BLOOMBERG
More world news:
-Pope continues his penitential journey through Canada after apologizing to indigenous people
-Mexico: what is the salary of President Andrés Manuel López Obrador?
-Venezuela: Assembly of Guaidó recognizes irregularities in Monomers
#Ukraine #billion #loan #EIB