Ukrainian state road agency Ukravtodor will get a $376 million loan from six Ukrainian banks — Ukreximbank, Oschadbank, Ukrgasbank, Credit Dnipro Bank, Pumb and TAScombank, Yevhen Metzger, the chairman of the board at Ukreximbank announced on Aug. 28.
The loan will help Ukravtodor finance Ukraine’s large-scale infrastructure program called Big Construction, initiated by President Volodymyr Zelensky in 2019 to rebuild the 170,000-kilometer network of Ukraine’s crumbling roads.
This is the first time that Ukrainian banks will pour so much money into the state enterprise, according Metzger.
“Until now, only large banks could invest big money and the amount of loan rarely exceeded $50-70 million,” he said on Aug. 28.
The deal between the banks and Ukravtodor proves that Ukraine’s banking system is ready to give money for large investment projects, Metzger said.
The loan will have a maturity of five years, and an interest rate of 4.9% per annum.
Ukreximbank, which spearheaded the deal, will provide 45% of the loan or $165 million.
On Aug. 31, Ukravtodor reported that it lost $2.7 million in the past six months, due to insufficient revenue from road works and penalties for late payment of taxes and utilities. As of June 2021, Ukravtodor is $1.3 billion in debt, compared to $1 billion last year.
On Aug. 27, Ukravtodor appointed Eugene Kuzkin, its acting head, as the company’s new chief. Kuzkin will be in charge of executing the Big Construction program.
To finance this program, Ukravtodor, which reported $4.8 million in net losses last year, has to attract additional investment from Ukrainian and foreign firms.
The state agency already signed a 450 million euro loan with the European Bank for Reconstruction and Development in December 2020 to finish the program.
To receive more money from investors, Ukravtodor has to eliminate corruption, which has haunted it for a long time and caused hundreds of millions of dollars in losses to the state budget, experts said.
