Business: Ukraine needs funding by China
Wants more time to submit proposals
Ukraine needs more time to submit proposals for coal and gas projects to China so it can secure funding worth up to $ 3.65 billion as the European nation is unlikely to meet a June deadline, Deputy Prime Minister Stepan Kubiv was quoted as saying in a Reuters report on Wednesday.
Ukraine signed a loan agreement with the China Development Bank ( CDB) in 2012 but has repeatedly pushed back deadlines to submit plans for how the money will be used, because of differences among Ukrainian government bodies.
Ukraine needs the money to revamp its energy infrastructure. Its economy is emerging from a deep recession and is being supported by a $ 17.5 billion IMF aid program.
Repeated delays mean that the country risks losing the money altogether.
The government has said that at least one project would be submitted by June but Kubiv, who also holds the Economy Ministry portfolio, said it isn’t ready yet.
Kubiv led a delegation to China earlier in May and acknowledged the China loan was not discussed with Ukraine’s Chinese counterparts despite the deadline being near.
He also said that Ukraine and China should review the terms of the loan, which have not been made public.
“It will be ( China’s) decision, but I believe that this ( loan agreement deadline) needs to be extended,” Kubiv said. “But at the same time we have to review the pricing policy of the resource ( the loan).”
CDB, the economy and energy ministries and the state- run energy company Naftogaz did not respond to requests for comment.
The loan agreement was conceived in 2012 under former president Viktor Yanukovich. Many of the projects he had earmarked for the money were in the east of Ukraine.
The chief of a Naftogaz subsidiary has previously told Reuters that the new plans include building two new coal- fired power stations in Kiev and the western city of Lviv and an upgrade in drilling capacity at a Naftogaz subsidiary.
These facilities would replace Soviet- era ones, which run on mainly expensive imported gas, with units that run on coal.