€380 million will be provided to local partner banks
The European Bank for Reconstruction and Development (EBRD) and the European Union (EU) are stepping up their support for businesses in Georgia, Moldova and Ukraine. A new joint programme will help local entrepreneurs to take full advantage of the opportunities offered by the Deep and Comprehensive Free Trade Area (DCFTA) between each country and the EU.
The EBRD will provide €380 million in loans and trade guarantees to local partner banks and other financial institutions for on-lending to businesses, while the EU will make available €19 million for technical assistance, investment incentives and risk-sharing. At the same time, the Bank and the EU are supporting further improvements to the investment climate through various policy dialogue activities.
The establishment of a free trade area is part of the EU’s Association Agreements with Georgia, Moldova and Ukraine signed in 2014. It will offer local businesses access to the EU’s single market, the world’s largest, and help boost economic development and growth in the three countries.
The signing marks the first phase of a planned €1.2 billion EBRD/EU programme to which the EU is expected to provide €56.5 million in funding to help businesses invest in improvements of product quality and service standards. This, in turn, will prepare them for the DCFTA and create an environment conducive to cross-border trade, job creation and economic growth in the three countries.
“This is truly a game-changing initiative to everyone’s benefit: it will make local businesses more competitive while consumers will be offered more advanced, better quality products and services,” said Alain Pilloux, EBRD’s Acting Vice-President Policy and Partnerships. “It will also help to unleash the full export potential of businesses in these three countries, as it will provide them with access to the European market.”
“Small and medium size companies are the engine of the local economy. This facility will help them take full advantage of the opportunities offered by the establishment of a free trade area with the EU, thus contributing to overall economic growth in the partner countries,” added Katarina Mathernova, the European Commission’s Deputy Director General, Neighbourhood and Enlargement Negotiations.
The EU has also provided €42 million to the EBRD’s Advice for Small Business to boost entrepreneurs’ know-how to grow their business in the Eastern Neighbourhood region since 2011. Both programmes are part of the EU4Business initiative, which supports the EU’s projects to back small and medium-sized enterprises in Eastern Partnership countries.
With its local presence and 25 years of experience of working to develop the private sector in the three countries, the EBRD is strongly positioned to successfully promote this project. The Bank is the largest institutional investor in the three countries and has invested €2.6 billion in Georgia, €1 billion in Moldova and €11.6 billion in Ukraine.