President of Ukraine Viktor Yanukovych signed the laws on granting state guarantees for loans originated by the State Bank of China amounting to 29.5 billion UAH (3.565 billion USD) for projects on replacing natural gas with domestic coal and the loans originated by the Export-Import Bank of China amounting to 24.3 billion UAH (3 billion USD) for agriculture projects, ForUm learned from the President’s press office.
The laws, adopted at the extraordinary session of July 30, provide for an increase in size limit of state guarantees from 15 billion UAH up to 68.8 billion UAH.
As reported, in mid-July, the Energy and Coal Industry Ministry of Ukraine and the State Bank of China signed a protocol on cooperation in the substitution of natural gas with coal.
It is assumed that five innovative projects, including the introduction of coal-water fuel technology and coal gasification will be financed by the loan funds.
In general, the Energy and Coal Industry Ministry of Ukraine expects the implementation of projects to reduce consumption of imported natural gas by more than 3 billion cubic meters and to save 1.5 billion USD annually.
It is also assumed that the projects will solve the problem of surplus energy coal grades in the Ukrainian market, which appeared after the growth of its production in the last two years and will provide stable sales of ten million tons of domestic coal.
The conditions of lending are not known yet, while agriculture loans of the Export-Import Bank of China, according to Finance Ministry are to be originated at a rate of 6 months Libor +4,5% for a period of 15 years with a five-year grace period.
These funds are expected to finance the project of building a factory for the production of plant-protection agents, processing organic and mineral fertilizers, cultivation of land, as well as the purchase of plant-protection agents and agricultural and other agricultural equipment.
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