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Analysis of the Resolution of the Cabinet of Ministers of Ukraine dated October 8, 2024, No. 1151
The Resolution of the Cabinet of Ministers of Ukraine No. 1151, adopted on October 8, 2024, concerns the implementation of co-financing projects with the Reconstruction Credit Institute (“KfW”) in the field of improving the efficiency of electricity transmission. The document consists of four main points, which we will discuss in detail below.
1. Confirmation of State Guarantees
The Cabinet of Ministers agrees with the proposal of the Ministry of Finance regarding the confirmation of state guarantees. These guarantees were provided pursuant to the resolutions dated December 9, 2022, No. 1367, and December 27, 2023, No. 1377. They pertain to two projects:
- “Improving the Efficiency of Electricity Transmission (Substation Modernization) II”
- “Improving the Efficiency of Electricity Transmission (Integration of the Ukrainian Unified Energy System into the European Unified Energy System) III”
The confirmation of the guarantees is carried out in connection with the deferral of obligations under loans that were incurred by the private joint-stock company “National Energy Company ‘Ukrenergo’.”
2. Ensuring the Fulfillment of Debt Obligations
The resolution establishes that the state guarantees ensure the fulfillment of debt obligations under the specified loans. This includes accounting for the deferral of obligations, which means that the debt responsibility on the part of “Ukrenergo” will be secured even with the postponement of loan repayment deadlines.
3. Approval of the Draft Agreement on Confirmation of Guarantees
The Cabinet of Ministers approves the draft Agreement on Confirmation of Guarantees between the Cabinet of Ministers of Ukraine as the guarantor and KfW, Frankfurt am Main. The agreement pertains to two guarantee agreements:
- Guarantee Agreement dated December 19, 2022, for the project “Improving the Efficiency of Electricity Transmission (Substation Modernization) II”
- Guarantee Agreement dated December 29, 2023, for the project “Improving the Efficiency of Electricity Transmission (Integration of the Ukrainian Unified Energy System into the European Unified Energy System) III”
4. Authorization of the Minister of Finance to Sign the Agreement
The resolution grants the Minister of Finance, Serhiy Mykhailovych Marchenko, the authority to sign the Agreement mentioned in the previous section. This enables the official approval and conclusion of the necessary documents with KfW for the implementation of the specified projects.
Thus, this resolution by the Cabinet of Ministers of Ukraine ensures financial support for key projects in the energy sector through the confirmation of state guarantees and the establishment of clear conditions for the fulfillment of obligations.
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