KIEV, June 24 – The Cabinet of Ministers has granted the State Food-Grain Corporation the right to write off funds from its accounts to Export-Import Bank of China if the corporation does not fulfill its liabilities under a $3 billion credit agreement.

The resolution on amendments to the procedure and conditions for granting government guarantees in 2012 to finance projects in the agricultural area was posted on the government's website.

Ukraine also uses as guarantees the rights to the contracts signed as a part of the general credit agreement.

Earlier Parliament permitted the State Food-Grain Corporation of Ukraine to take a government-secured loan of $3 billion from Export-Import Bank of China for projects in the agricultural sector.

The State Food and Grain Corporation of Ukraine in late 2012 received the first tranche of $1.5 billion from the Export-Import Bank of China. The funds will be sent to carry out spot and forward purchases of grain, which will be shipped to China.

According to the Finance Ministry, from Export-Import Bank of China is ready to issue loans for the period of 15 years with a five-year grace period at six months Libor plus 4.5%.

The funds will be used for the purchase of plant protection agents, seeds, agricultural equipment, the construction of a plant to produce crop protection agents in Ukraine, the processing of organic and mineral fertilizers and other projects in the country.

Earlier the Agricultural Policy and Food Ministry said that Ukraine has pledged to ship around three million tons of corn to China annually as part of its obligations on a $3 billion loan from the Export-Import Bank of China.

In August 2010, the government decided to create the State Food and Grain Corporation of Ukraine. The corporation has a chain of branches – grain storage facilities, flourmills, fodder factories and a cereals factory. The 44 subdivisions of the corporation can store a total of 3.46 million tons of grain, including the grain handling capacities of Odessa and Mykolaiv ports of 2.38 million tons of grain cargo per year. (om/ez)