EBRD guarantees to Ukrainian banks to unlock €900 million of new finance

• EBRD provides unfunded portfolio risk-sharing facilities to PrivatBank and Ukrgasbank 
• Facilities to unlock €900 million of new financing for Ukrainian firms and households 
• Focus on critical industries and energy investments, with EU, French and CRSF support

The EBRD is extending unfunded portfolio risk-sharing facilities to two Ukrainian banks, PrivatBank and Ukrgasbank, that, when fully committed, will unlock up to €900 million of new lending to the banks’ clients amid Russia’s ongoing war on Ukraine.

The EBRD facilities will cover a portion of the two banks’ credit risk on €900 million of new sub-loans to borrowers in Ukraine. To PrivatBank, the EBRD is extending a guarantee of €185 million unlocking up to €600 million of new lending. EBRD’s guarantee to Ukrgasbank of €89.2 million will unlock up to €300 million of new lending. Each facility will be provided in two equal tranches.

Under these facilities, the banks will provide sub-loans to companies in critical industries such as agribusiness, manufacturing, pharmaceuticals, transport and logistics, as well as residential borrowers who are looking to implement energy security projects. The EBRD’s facilities will be backed by first-loss risk cover funded by France and the European Union (under the EU’s Ukraine Investment Framework).

“We are proud that EBRD’s guarantees will unlock onlending at these record levels to allow PrivatBank and Ukrgasbank to provide much-needed funding to Ukrainian companies and households that will support sub-borrowers’ resilience and preserving of livelihoods in the country during the ongoing war,” said Arvid Tuerkner, EBRD Managing Director, Ukraine and Moldova.

PrivatBank will benefit from a €185 million guarantee to unlock up to €600 million in new financing — the largest portfolio risk-sharing facility implemented in Ukraine to date. The facility will focus on supporting micro, small and medium-sized enterprise (MSME) clients, with €415 million available under the EBRD’s Resilience and Livelihoods Guarantee (RLG) to address immediate liquidity and investment needs across key sectors. In addition, €95 million under the Energy Security Support Facility (ESSF) will drive investments aimed at strengthening Ukraine’s energy resilience, while a further €90 million under the EU4Business-EBRD Credit Line will be directed toward long-term capital investments by MSMEs, supporting upgrades of equipment and technology to meet EU standards.

EBRD’s €89.2 million guarantee in favour of Ukrgasbank will support up to €300 million in new lending. Of this total, up to €160 million will be channelled under the ESSF – the largest ESSF sub-limit delivered in Ukraine to date – supporting eligible sub-projects in energy generation, energy storage, and energy efficiency for private businesses, state-owned enterprises, municipalities and municipal companies, households, and housing associations. An additional €80 million under the RLG will enable Ukrgasbank to finance working capital and investment needs for Ukrainian private companies operating in essential sectors of the economy. A further €60 million under the EU4Business-EBRD Credit Line will enable Ukrainian MSMEs to modernise operations and align with EU technical standards, enhancing their competitiveness.

Under both facilities, residential sub-borrowers (households and housing associations) will receive up to 10 per cent of the total investments under the ESSF sub-limits, benefiting from grant support funded through EBRD Crisis Response Special Fund (CRSF), with the United States and The Netherlands as major contributors. For PrivatBank the total amount of incentives for residential sub-borrowers will be €1.5 million, for Ukrgasbank €1.6 million.

In addition, grant support for eligible MSMEs under the EU4Business-EBRD Credit Line will cover 10-30 per cent of their investment costs funded by the CRSF. Higher incentives will be provided for businesses and households most affected by the war on Ukraine, including those impacted by asset destruction, loss, or relocation due to the war, as well as sub-borrowers facilitating the reintegration of war veterans, persons with disabilities, internally displaced persons, and/or those located in the acutely war-affected territories of Ukraine.

For PrivatBank clients, total grant incentives for eligible MSMEs under Tranche A will reach €9 million, while Ukrgasbank will provide up to €6 million EU grant to eligible MSME clients under Tranche A.

PrivatBank and Ukrgasbank are leading institutions in Ukraine’s financial sector. PrivatBank, Ukraine’s largest bank, focuses on retail and MSME customers, serving over 18 million individual and over 910,000 business clients across more than 1,100 branches. Over 70 per cent of Ukrainians use its services. Ukrgasbank, the country’s fifth-largest bank, focuses on green and sustainable finance, serving 1.5 million individual and 87,000 corporate clients across 215 branches.

At the URC, the EBRD also signed a Memorandum of Understanding with the National Bank of Ukraine, Ministry of Economy and Banking Association of Ukraine on building a coalition for launching the Women Entrepreneurs Finance (We-Fi) Code in Ukraine to advance women-owned SMEs and facilitate their access to finance.

The EBRD is Ukraine’s largest institutional investor, having deployed €7.6 billion since 2022. A further €4 billion capital increase has been secured to continue supporting the country’s economy during wartime and for future reconstruction efforts.