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EBRD to make available US$ 9 million to four Ukrainian banks
The European Bank for Reconstruction and Development (EBRD) is making available an initial US$ 9 million (€ 9.6 million) to four Ukrainian banks under a fast-growing programme that makes financing of foreign trade more cost-efficient. The credit, issued under the EBRD’s Trade Facilitation Programme, will enable Joint Stock Post Pension Bank Aval, First Ukrainian International Bank (FUIB), Joint Stock Commercial Bank Forum and Nadra Joint Stock Commercial Bank to expand trade finance activity for the benefit of the Ukrainian economy.
"It is very important to support Ukraine’s international and intra-regional trade," said Charles Frank, First Vice President of the EBRD. "The facility will assist the participating banks in strengthening their relationships with international banks. The expansion of the Trade Facilitation Programme is part of the EBRD’s commitment to the region and to Ukraine."
"The new programme will have a significant positive impact on the development of Ukrainian foreign trade," said Alexander Derkach, Chairman of Aval Bank. "This is a strong signal of the EBRD’s ongoing support for the Ukrainian economy and for the Ukrainian banking system," added Nikolai Vinogradov, Chairman of FUIB. "At the same time, the Programme will provide to the participant Ukrainian banks better access to international markets" commented Igor Gilenko, President of Nadra Bank. "Selection of the Ukrainian banks in this programme was based on strong professional and banking criteria, and therefore our participation is a positive factor," added Igor Kolesnik, Chairman of Forum Bank.
The Trade Facilitation Programme for Ukraine is initially envisaged at US$ 9 million ( € 9.6 million) but is expected to be increased significantly once implementation has taken place and the banks have gained some experience with it. The facility is expected to be made available to additional selected banks later in the year.
The programme is part of a regional effort by the EBRD covering all 27 of the Bank’s countries of operations. Under the programme, the EBRD issues guarantees to international banks on behalf of local banks to increase their ability to support import and export transactions.
To provide greater flexibility, a number of new elements have been added to the programme. The EBRD will extend its guarantees to cover advance payment bonds, capital equipment imports and a range of trade finance instruments in addition to letters of credit. The amount of the guarantee will extend to up to 100 per cent of the face value of the underlying finance. The procedure for the issue of EBRD guarantees has been streamlined to facilitate a fast approval process.
As of mid-December 2000, the EBRD’s total commitments in Ukraine totalled € 1.2 billion. This new programme will bring the EBRD’s total exposure to the Ukrainian financial sector to € 313 million.
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