EBRD launches Enterprise Security Enhancement with PrivatBank and Raiffeisen Bank Ukraine

• EBRD pilots Enterprise Security Enhancement (ESE) support mechanism with PrivatBank and Raiffeisen Bank Ukraine 
• Feature will enable lenders to provide partial debt relief to Ukrainian borrowers who have suffered war-related damage
• ESE preserves the incentive for Ukrainian businesses and households to invest in long-term capital expenditure (capex) projects 

The European Bank for Reconstruction and Development (EBRD) is partnering with PrivatBank and Raiffeisen Bank Ukraine (RBU) on a new support mechanism for Ukrainian businesses and households affected by Russia's ongoing war on Ukraine.

The Bank and the two Ukrainian lenders are piloting an Enterprise Security Enhancement (ESE) feature as part of their portfolio risk sharing (PRS) facilities. The donor-funded feature will enable PrivatBank and RBU to grant partial debt relief to Ukrainian borrowers who have suffered war-related damage. The instrument is the first of its kind piloted by the EBRD and is designed to address a critical wartime gap in business finance.

ESE introduces a structured mechanism that allows EBRD partner banks to grant partial debt relief to eligible sub-borrowers, if assets financed by sub loans that fall under the EBRD’s PRS facility suffer direct, verified war damage. The EBRD, thanks to donor support, will compensate the partner banks for the resulting credit loss, allowing Ukrainian businesses to continue operating and reinvesting rather than carrying the full residual liability of destroyed assets.

Under standard lending arrangements, Ukrainian businesses remain fully liable for repayment of their loans even when assets financed by those loans are destroyed as a result of the war. Given the limited availability of war-risk insurance, this misalignment has discouraged the capital investment that Ukraine's economy needs to sustain operations, preserve jobs and rebuild.

ESE preserves the incentive for Ukrainian businesses and households to invest in long-term capital expenditure (capex) projects despite the continued wartime uncertainty, helping to sustain livelihoods and support Ukraine’s economic resilience. It works alongside – but does not duplicate – existing market and donor-backed insurance mechanisms, with strict anti-double-compensation rules ensuring that it is used only where no other recovery is available.

The mechanism is available exclusively for capex subloans financing fixed assets that subsequently suffer direct war-related damage. Each ESE claim will be reviewed and verified by the EBRD’s partner banks in cooperation with the EBRD (or its appointed consultants) before any compensatory payment is made. ESE does not cover working capital, and minimum damage thresholds and aggregate per-project caps will apply to ensure the mechanism remains targeted and fiscally disciplined.

The ESE pilot is being launched under the Bank’s PRS facilities with PrivatBank and RBU, approved in 2025. It will be limited in scope, with allocations of €6.8 million and €1.2 million, respectively.

The pilot ESE allocations are funded by EBRD grant resources. As the mechanism rolls out beyond the pilot phase to additional Ukrainian partner financial institutions and PRS facilities, future allocations are expected to be funded by external donors, including the European Commission under the Ukraine Investment Framework (UIF).

State-owned PrivatBank is the largest systemically important bank in Ukraine. It focuses on retail and micro, small and medium-sized enterprise customers, serving more than 18 million individuals and over 910,000 business clients across more than 1,100 branches. Over 70 per cent of Ukrainians use its services.

Raiffeisen Bank Ukraine is the country’s largest private bank and its fourth largest overall. It has 306 branches, servicing 2.52 million active clients and offering conventional banking products to corporate, small and medium-sized enterprise and retail customers. The EBRD has a longstanding and successful relationship with RBU reaching back to 1998.

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. The Bank has deployed €9.7 billion to support the real economy since the start of the war, with a focus on energy security, private-sector resilience and critical infrastructure.