On October 11, Ukrainian Minister of Finance Serhiy Marchenko signed the Fourth Additional Agreement with Canada, securing an additional loan of 400 million Canadian dollars (approximately $300 million USD). The Ministry of Finance of Ukraine reported that this funding is intended to support priority expenditures within Ukraine's state budget.
The funds will be raised through the International Monetary Fund's (IMF) Administrative Account, facilitating a streamlined transfer to Ukraine's general fund in the near future.
Statements from Officials
Minister Marchenko expressed profound gratitude toward Canada, stating:
"Canada is one of the leaders in supporting Ukraine and a strategic partner, providing significant assistance from the first days of the full-scale invasion. Direct budget support from February 2022 reaches more than $5 billion USD. I am grateful to the Canadian government and citizens for their solidarity with Ukraine and their extremely important contribution to the stability of the financial system of Ukraine."
Loan Terms
- Amount: 400 million Canadian dollars (~$300 million USD)
- Interest Rate: 1.5% per annum
- Loan Period: 10 years
- Grace Period: 4.5 years from the date of receipt
Purpose of the Funding
The additional concessional credit is designated for:
- Priority State Expenditures: Ensuring the Ukrainian government can meet essential budgetary commitments, including social services, healthcare, and defense.
- Financial Stability: Bolstering Ukraine's financial system amid ongoing economic challenges resulting from external aggression.
Canada's Continued Support
Since February 2022, Canada's direct budget support to Ukraine has exceeded $5 billion USD. This financial aid has been crucial in helping Ukraine navigate the economic difficulties posed by the full-scale invasion.
Highlights of Canada's Support:
- Military Aid: Provision of military equipment and training to Ukrainian forces.
- Humanitarian Assistance: Funding for humanitarian projects to support displaced persons and affected communities.
- Economic Aid: Loans and grants aimed at stabilizing Ukraine's economy and supporting reforms.
Next Steps
The Ukrainian Ministry of Finance anticipates that the funds will be deposited into the general fund of the state budget in the near future. This infusion of capital is expected to have an immediate positive impact on Ukraine's ability to finance critical government functions.
Background
- IMF Administrative Account: A mechanism that allows member countries to provide financial resources to other members, facilitating international support.
- Concessional Credit: Loans offered on terms substantially more generous than market loans, often featuring lower interest rates and extended grace periods.
Conclusion
This additional financial assistance from Canada reinforces the strong bilateral relationship between the two countries. It reflects Canada's steadfast commitment to supporting Ukraine's sovereignty, economic stability, and ongoing efforts to address the challenges posed by external aggression.
