EBRD boosts support for Ukraine’s banks with new commitments

• EBRD extends new commitments to Ukraine’s banks, boosting access to finance for businesses and households, supported by donors
• Agreements with ProCredit Bank Ukraine, Oschadbank, Raiffeisen Bank Ukraine and Bank Lviv will enable €140 million in new financing for Ukrainian SMEs, midcaps and households
• Agreements signed at the Fourth Annual EBRD Roundtable on Banking Sector Resilience in Wartime Ukraine
  

The European Bank for Reconstruction and Development (EBRD) is strengthening its support for Ukraine’s banking sector and real economy by signing four new agreements with partner banks.

The agreements – signed at the Fourth Annual EBRD Roundtable on Banking Sector Resilience in Wartime Ukraine – will help ensure continued access to finance for Ukrainian businesses and households, strengthen the resilience of the banking sector and support the country’s economic recovery amid the ongoing war.

The agreements comprise a new €30 million equivalent local-currency senior loan for ProCredit Bank Ukraine, a €10 million equivalent local-currency tranche for Bank Lviv and two €50 million portfolio risk sharing (PRS) tranches with Oschadbank and Raiffeisen Bank Ukraine (RBU).

The €30 million hryvnia-denominated facility to ProCredit Bank Ukraine will provide access to long-term local-currency financing for Ukrainian small and medium-sized enterprises (SMEs) and corporates, helping them reduce foreign-exchange risk, invest with greater confidence and continue operating in exceptionally challenging circumstances. The Bank’s facility is supported by the European Commission through the Ukraine Investment Framework (UIF) and by the United States of America through interest-rate subsidy support.

The €10 million hryvnia-denominated commitment to Bank Lviv is the third tranche of the EBRD’s €40 million local-currency loan to the bank, the largest hryvnia loan the EBRD has provided to a partner bank in Ukraine since the start of the full-scale invasion. Following the successful deployment of previous tranches, Bank Lviv will channel the new long-term hryvnia funding to Ukrainian micro, small and medium-sized enterprises, helping them invest, grow and avoid foreign-exchange risk.

Part of the facility will be dedicated to capital investments that support competitiveness improvements and alignment with European Union (EU) standards. The Bank’s facility is supported by the United States through the EBRD SME Special Fund, Sweden through the Swedish International Development Cooperation Agency and the EU through the EU4Business-EBRD Credit Line, as well as by the United Kingdom through British International Investment, which shares half of the risk under the facility.

The Bank’s €50 million PRS commitment to Oschadbank is provided as the second tranche of the €100 million Energy Security Support Facility between the two lenders. The new financing will expand Oschadbank’s capacity to finance decentralised energy generation, energy storage and energy-efficiency investments. At a time when Ukraine’s energy infrastructure continues to face attacks, the facility will help businesses and households strengthen their energy resilience while supporting the country’s broader energy-security efforts.

The Bank’s facility is backed by support from the European Commission through the UIF, France through first-loss risk cover and the Netherlands through incentive grants for household energy-security investments. Priority financing will be directed to businesses and individuals most affected by the war, including veterans, internally displaced persons, returnees, persons with disabilities, and women- and youth-led enterprises.

The EBRD’s €50 million commitment signed with RBU represents the fourth and final tranche under the Bank’s €200 million unfunded PRS facility. The facility will support a broad range of working-capital and investment financing needs for Ukrainian private businesses across key sectors of the economy. It will also benefit from the Enterprise Security Enhancement mechanism piloted by the EBRD and RBU, which will enable RBU to provide partial debt relief to borrowers that have suffered war-related damage to assets financed under the EBRD’s facility.

Donor support is provided by the European Commission and the EBRD Crisis Response Special Fund.

The EBRD is Ukraine’s largest institutional investor, having substantially increased its investment in the country since Russia’s full-scale invasion began in 2022. It partners with Ukraine’s financial institutions to channel financing effectively to businesses and households across the country, helping preserve economic activity, strengthen energy security and build resilience in the face of continued uncertainty.

Since the start of the full-scale war, the Bank’s instruments for Ukraine’s financial institutions have enabled almost €8 billion of finance for tens of thousands of Ukrainian businesses and households.