- EBRD provides new unfunded portfolio risk-sharing facility to ProCredit Bank Ukraine
- Facility will unlock €70 million of new financing for Ukrainian businesses
- Focus on investment in critical industries, with EU grant support for competitiveness upgrades
The European Bank for Reconstruction and Development (EBRD) is stepping up its support for Ukraine’s businesses amid Russia’s ongoing war on the country by extending a new unfunded portfolio risk-sharing facility to ProCredit Bank Ukraine (PCBU).
The EBRD’s facility will partially cover PCBU’s credit risk on €70 million of new loans, enabling the bank to extend vital financing to clients across the country. Sub loans will be granted to businesses operating in critical industries such as agribusiness, manufacturing, pharmaceuticals, transport and logistics, supported by risk cover under an EBRD Resilience and Livelihoods Guarantee.
This is the fifth portfolio risk-sharing facility that the EBRD has provided to PCBU since the start of Russia’s full-scale invasion, building on the success of previous instruments. Overall, the EBRD has unlocked more than €2 billion of financing for Ukrainian borrowers through its portfolio risk-sharing facilities for partner banks in Ukraine.
Up to 20 per cent of all sub loans covered by the EBRD’s guarantee will support the financing of long-term capital investments by micro, small and medium-sized enterprises (MSMEs), helping them to upgrade their technology and equipment in line with European Union (EU) standards under the EU4Business-EBRD Credit Line. Eligible sub borrowers will also benefit from EU-funded technical assistance and grant support.
Additional investment incentives will be available to borrowers whose assets have been destroyed, lost or relocated due to the war, as well as those that are actively involved in reintegrating veterans into the workforce.
The EBRD has already allocated €75.4 million of EU grant support to Ukrainian MSMEs under the EU4Business-EBRD Credit Line, of which €5.8 million has been issued to projects through PCBU.
The EBRD facility will be backed by first-loss risk cover funded by the European Union under its Ukraine Investment Framework.
PCBU is a wholly owned subsidiary of ProCredit Holding AG and one of Ukraine’s 15 largest banks in terms of assets. It is a market leader in SME finance in Ukraine and a longstanding partner of the EBRD.
PCBU is committed to supporting war veterans (both as employees and as clients) and will implement key recommendations in the Guidance Note to Support Ukrainian Financial Institutions in Becoming More Inclusive, Safer, and More Accessible Employers, which was developed jointly by the EBRD and the National Bank of Ukraine.
The EBRD is Ukraine’s largest institutional lender. It has significantly increased its lending to the country in recent years, making a total of €7 billion available to Ukraine since Russia’s full-scale invasion. It has secured agreement from its shareholders for a capital increase of €4 billion in order to continue lending at this level in wartime, and it will increase its lending further when the time comes for reconstruction.