Signing of MOU on Bank-to-Bank Loan with Ukrainian EXIM Bank First Credit Line to Ukraine to Support Japanese Exports
NR/2005-27
July 21, 2005
July 21, 2005
- Japan Bank for International Cooperation (JBIC; Governor: Kyosuke Shinozawa) signed today a memorandum of understanding (MOU) for providing a bank-to-bank loan*1 totaling up to 50 million US dollars with the State Export-Import Bank of Ukraine (Ukreximbank) in the presence of President Yushchenko of Ukraine.
- This MOU has pledged mutual cooperation, including exchange of information on candidate projects, with a view to signing a bank-to-bank loan that provides medium- and long-term funds for Ukrainian firms when they import machinery and equipment from Japanese exporters. The loan, which will be provided as a credit line to Ukreximbank, will thus support Japanese exports to Ukraine.
- After independence from the Soviet Union in 1991, the Ukrainian economy suffered a major downfall. In recent years, however, it has registered remarkable growth (in 2004, its GDP grew by 12 percent), driven, among others, by growth of the export led by iron and steel sector and recovery in the agricultural sector. Since the government led by President Yushchenko swept into power with the Orange Revolution,*2 expectations have heightened for continued growth, with Japanese businesses laying their eyes on the country as a possible destination for exports and investments. This bank-to-bank loan is the first of its kind JBIC will extend to Ukraine. It will be provided as a credit line, without being covered by a guarantee from the Ukrainian government, to support exports of Japanese firms to Ukraine and thereby increase economic exchange between the two countries.
- JBIC has provided knowledge assistance for Ukreximbank along with the World Bank since 1997 to improve the bank's overall operations, among others for enhanced capacity for credit analysis and higher operational efficiency. In addition, JBIC provided the first ODA loan for Ukraine last March to support the expansion of the Boryspil State International Airport near the capital city of Kiev. As an official financial institution with a mandate to advance Japan's external economic policy and economic cooperation, JBIC will support sustainable growth in Ukraine through cooperation in developing infrastructure and promoting Ukrainian exports.
- *1 A bank-to-bank loan is a loan extended to an importer by way of a financial institution in the importing country to finance the import of machinery and equipment from Japan.
- *2 A mass movement that brought victory to Viktor Yushchenko in the presidential election, which lasted from October 2004 to January 2005. The name comes from his supporters using orange as their symbol color.
