The #Export-Import #Bank of #China announced its #willingness to #review the #interest #rate for its #USD 1.5 #billion #loan to the #State #Food and Grain #Corporation of Ukraine. The decision was put forward upon the meeting of Chinese and Ukrainian partners on March 19-23, 2017 in Ukraine.
Visit our website if you are interested in #doing business in Ukraine or looking for new #investment opportunities
As of now, the interest rate is 4.5% + LIBOR pushing the final interest rate to about 5.5%-5.8%. This requires the State Food and Grain Corporation of Ukraine to pay back $80-$85 million a year.
Following the talks between the State Food and Grain Corporation of Ukraine and Chinese party which took place in China last week, Eximbank expressed its satisfaction with the Sino-Ukrainian cooperation and consented to allocate the loan to implement three pilot projects.
‘I’m highly admiring the relevant policy you implemented and positive interactions you conducted with CCEC after you taking the new position as acting chairman, and appreciating your efforts to move the Project towards a good way,’ the letter from the Chinese bank reads.
In particular, the State Food and Grain Corporation of Ukraine will implement the following pilot projects:
- acquisition of 500 Ukrainian-made vehicles to transport grain;
- modernization and reconstruction of port elevators in the city of Mykolaiv;
- acquisition of plants protection tools under the State Food and Grain Corporation program.
The Chinese partners were particularly appreciative of the fruitful cooperation between the Ukrainian party and China Civil Engineering Construction Corporation with regards to the grain trade. This resulted in its initiative to lower the interest rate for the so-called ‘grain’ loan to put financial strain off Ukrainian grain producers.
As was reported earlier, Sino-Ukrainian grain trade was significantly boosted since October 2016. The total cost of awarded contracts accounted for 260,000 tons of grain, 142,000 of which are already delivered to China.
As is known, Beijing issued a $1.5 billion ‘grain’ loan to the State Food and Grain Corporation of Ukraine back in 2012. Ukrainian party has consented to supply about 5 million tons of grain annually. In 2016, the State Food and Grain Corporation of Ukraine paid $80 million as part of the annual interest rate payments.