Japan will loan Ukraine 178 million dollars to overhaul the country's top airport Kiev Borispil, according to statements by a senior government official on Tuesday. The Japanese Bank of International Cooperation will extend the 19.092 billion yen credit for construction of a new international-standard passenger terminal, said Evhen Chervonenko, Ukraine's Transport Minister, in an Ukainska Pravda interview. The Japanese loan at a 1.5 annual interest rate over 30 years is dramatically cheaper than funds offered in Ukraine's booming capital markets, where short-term money costs at minimum 10 per cent annually. Japanese bank executive Ivao Okamoto and Ukrainian Finance Minister Viktor Pinzenyk signed the agreement into effect in a Tuesday ceremony, the Interfax news agency reported. Ukraine will receive the funds after "an open and transparent tender" for the construction work, Chervonenko said. The goal of the investment project is conversion of Kiev's provincial Borispil airport into a regional hub, capable of handling increasing volumes of air traffic between Russia and the Near East. The Ukrainian government's decision to sign off on the Japanese loan went hard against the interests of the Ukrainian airline Aerosvit, which in past years had held a near-monopoly on business development at Borispil. Aerosvit benefited from close connections between its management and Ukraine's previous government, which preferred to finance development domestically, and to lock out foreign investors. Ukraine's new reform government, put into power by the country's recent Orange Revolution, has reversed the policy, making improved conditions in the country for foreign investors a top priority.
