EBRD, Raiffeisen boost MSME funding in Ukraine

By Olga Rosca
@olgarosca

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  • EBRD to provide €75 million guarantee to Raiffeisen Bank in Ukraine
  • Innovative mechanism unlocks funding for MSMEs
  • Thirty per cent of the project to finance green technologies

The European Bank for Reconstruction and Development (EBRD) and Raiffeisen Bank JSC in Ukraine (Raiffeisen Bank) are strengthening their cooperation to boost the availability of funding for Ukrainian micro, small and medium-sized enterprises (MSMEs).

The EBRD is providing Raiffeisen Bank with an unfunded guarantee of up to €75 million in local currency linked to the bank’s domestic sovereign bond portfolio. The additional risk-taking capacity freed up by the guarantee will allow Raiffeisen Bank to commit fresh funds to Ukrainian businesses, increasing its support for the real economy.

The facility is an instrument not previously available in the Ukrainian market and follows the innovative Guarantee for Growth facility that was pioneered in Albania in 2020.

Raiffeisen Bank’s lending under the mechanism will have a particular focus on supporting local MSMEs, which are vital to the sustainable growth of Ukraine’s economy. At least 30 per cent of the funds will be used to finance high-performance, sustainable technologies that can advance the country’s environmental and climate-mitigation goals and are in line with the EBRD’s Green Economy Transition (GET) approach.

Matteo Patrone, EBRD Managing Director, Eastern Europe and the Caucasus, said: “Together with our longstanding partner Raiffeisen, we are now expanding the Guarantee for Growth facility to a new market, Ukraine. The project will improve access to finance for MSMEs at a critical time while also encouraging investments in green technologies. I am pleased that the trust and confidence we have built with Raiffeisen enables us to innovate and benefit businesses and economies where both banks are active.”

“We are proud that our partnership with the EBRD supports the economy with additional volumes of funding to MSMEs and encourages entrepreneurs to explore green technology projects. The participation in this facility confirms Raiffeisen Bank’s commitment to Ukraine, its status as one of the biggest lender in the country, and the innovative approach to supporting its growth plans,” said Oleksandr Pysaruk, CEO of Raiffeisen Bank.

As part of the project, the EBRD is working with the National Bank of Ukraine to ensure that the local prudential framework is aligned with European Union banking-sector standards. The programme complements the work of the Vienna Initiative, through which the EBRD promotes the alignment of regulatory practices with international standards in the economies where it operates.

Raiffeisen Bank is the fourth-largest bank in Ukraine in terms of total assets and the third-largest in terms of performing loans. The bank provides a range of services to 2.8 million clients countrywide. Since October 2005, it has been part of Austrian banking group Raiffeisen Bank International AG.

The EBRD is a leading institutional investor in Ukraine. To date, the Bank has invested more than €15.5 billion in 507 projects across the country, with a focus on assisting economic stabilisation, anchoring reforms, strengthening energy efficiency and energy security, and supporting agricultural and industrial projects as well as smaller businesses.

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