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EBRD loan to First Ukrainian International Bank
A US$ 13.0 million (ECU 9.98 million) loan from the European Bank for Reconstruction and Development (EBRD), signed last week, is the first bank-to-bank loan in Ukraine. It will allow one of the country’s most successful private commercial banks, the First Ukrainian International Bank (FUIB), to expand its medium-term lending to Ukraine’s agribusiness sector, thereby diversifying its operations in one of the country’s most promising industries.
Ron Freeman, First Vice President of the EBRD, said: “It’s very encouraging that the demand for medium to long-term funding of agribusiness and related industries has increased in Ukraine. This demand must be met by a strong service provider which has adequate resources and credit controls. FUIB is in a position to provide this service.”
General Manager of FUIB, Igor Yushko, said: “Working with the EBRD will enable us to ensure an appropriate geographical and sectoral coverage of FUIB’s loan portfolio. We will also be able to increase our lending capacity and strengthen our operations and credit analysis capabilities.”
Beneficiaries of the loan will be mainly food and drinks processing companies, fresh produce supply and agricultural equipment companies, as well as food packaging and distribution companies throughout Ukraine. Customers will mostly be private enterprises, although state-owned enterprises currently in the process of being privatised are also eligible.
This bank-to-bank loan to FUIB complements the sovereign Small and Medium-sized Enterprise Credit Line, signed on 16 December 1994, which targets a number of private commercial banks that are not in a fully satisfactory financial position. The SME line is effective and disbursing, and a number of projects have already been financed.
The relationship between the two institutions dates from the successful co-financing by the Ukrainian bank of the EBRD’s first project in Ukraine, the Borispol Airport Refurbishment.
This loan to FUIB will bring the EBRD’s total amount of commitments to Ukraine to ECU 119.9 million, of which ECU 26.3 million is for the agribusiness sector.
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