The loan agreement provides for financing the implementation of a state investment project to procure two mine countermeasures vessels (MCMV) and their delivery and maintenance, the joint production of eight missile ships, the delivery of and retrofit of weapons systems to existing vessels, the joint production of a frigate and consultancy and technical support for the building of naval infrastructure, including the delivery of equipment.
The agreement confirms the results of previous discussions, reached by signing the Memorandum of Intent between the Ministry of Defence of Ukraine and the Ministry of Defence of the United Kingdom of Great Britain and Northern Ireland on development of capabilities of the Ukrainian Navy dated 7 October 2020.
The UK Party intends to grant the Ukrainian Party official credit support in the form of Credits for the implementation of the Project(s) subject to the relevant parties agreeing satisfactory Credit Agreement terms.
The overall amount of Credits used for financing the Contracts shall not exceed £1,700,000,000 (one billion seven hundred million UK pounds) or equivalent in USD/Euro, to which may be added the UKEF Support Fee.
For the implementation of the Projects the UK Suppliers and the Purchaser will need to sign Contracts necessary for their fulfilment. The Borrower confirms that it is prepared to use the Credits provided by the Lenders for the financing of such Contracts.
The Credits shall be used for the financing of the Contracts, signed with the UK Suppliers, which shall include goods and services of UK origin representing at least 50% of the value of the relevant Contract, and for the financing of the UKEF Support Fee.
As a reminder, Babcock International Group (Babcock) has signed a tripartite Memorandum of Implementation (MoI) in Odesa with the Ministry of Defence of Ukraine and the UK Government. Building on the agreement signed in October 2020, the two nations will now push forward a major programme of Ukrainian naval projects, with Babcock as their designated prime industrial partner.
Reflecting Babcock’s extensive naval experience and capabilities, the Group has been chosen to lead in the delivery of the scope of the broad ranging Ukrainian Naval Capabilities Enhancement Programme (UNCEP).
Babcock will be supported by several other companies with a strong UK presence, including MBDA, Thales, and Royal Haskoning DHV. They will also be working closely with Ukrainian industry in developing this programme.
