EBRD approves €350 million financing for Ukraine projects

By Anton Usov

Today the Board of Directors of the European Bank for Reconstruction and Development (EBRD) has approved two projects for Ukraine, amounting to €350 million. This is part of the EBRD operational response in Ukraine approved by its Board on 25 March 2014. The Bank is now ready to step up and broaden the scope of its investments in the country and reinforce this effort by technical assistance and extensive policy dialogue.

The first project is a €150 million framework facility, which will support the Bank’s existing clients in Ukraine’s real sector. The facility will help Ukrainian companies address their liquidity and working capital needs as well as overcome difficulties and constraints caused by the financial crisis and the reduced availability of external funding. It is expected that the facility will restore confidence and appetite for future projects in Ukraine among foreign and domestic investors.

The Bank will also resume its lending operations in the sovereign sector once Ukraine’s agreement for a macro-economic stabilisation programme with the International Monetary Fund is approved. The second transaction, which is subject to this condition, represents a €200 million second tranche of the Pan-European Corridors road project. This funding will allow completion of a much-needed rehabilitation of road approaches to the Ukrainian capital, including sections of M05 Kiev-Odessa and M01 Kiev-Chernigiv, which form part of the key Pan European Corridor IX. The project will also cover sections of N01 (Kiev – Znamenka) and R02 (Kiev – Ivankiv) roads and the reconstruction of the Zhytomyr bypass. The first €250 million tranche of this project, signed in 2010, is successfully used to rehabilitate the final stretch of the M06 motorway between Kiev and Zhytomyr, which is part of the Pan European Corridors III and V and a section of M07 Kiev-Kovel. Part of the loan will also be used to finance implementation of the first performance-based road maintenance contracts in Ukraine as well as road safety improvements.

The EBRD is the largest financial investor in Ukraine. As of 1 April 2014 the Bank had committed €8.9 billion (US$ 12.2 billion) through 326 projects in the country.