FIF - EaP SMEC - Ukrgasbank SME Loan

Location:

Ukraine

Project number:

52663

Business sector:

Financial institutions

Notice type:

State

Environmental category:

FI

Approval date:

11 May 2021

Status:

Disbursing

PSD disclosed:

05 May 2021

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Project Description

A three-year senior unsecured loan of up to €25 million in hryvna equivalent to be provided to Ukrgasbank to enable the bank's support to eligible MSMEs under SME Competitiveness Programme in the EU's Eastern Partnership. The loan will be available for disbursement in three tranches as either deliverable or synthetic hryvna-denominated facility. In addition to long-term financing, eligible sub-borrowers will receive technical assistance funded by the European Union and grant support in the form of investment incentives upon the completion of their investment projects. 

Project Objectives

The project will enable Ukrgasbank to finance long-term investments of Ukrainian MSMEs in upgrading their technology and equipment necessary to meet EU standards in terms of product quality, health and safety measures and environmental preservation. At least 70% of all financed sub-leases are expected to be compliant with EBRD Green Economy Transition (GET) approach.

Transition Impact

ETI score: 75

Competitive: the company will expand its MSME portfolio, predominantly in leasing business, with a focus on financing priority investments complying with EU directive(s), ultimately facilitating competitiveness of Ukrainian MSMEs;

Resilient: the company is expected to maintain adequate MSME portfolio quality.

ETI score: 75

Client Information

UKRGASBANK PJSC JSB

PJSC Ukrgasbank is the fourth largest bank in Ukraine with a 7.8% market share by total assets (USD 5 billion) at YE2020. It is one of 13 systemic banks in Ukraine designated by the regulator. Ukrgasbank is a universal bank operating a country-wide network of 276 branches. The bank is one of the market leaders in green lending and trade finance in Ukraine. It is rated B by Fitch on par with the sovereign. The state of Ukraine via Ministry of Finance controls 98.7% of the bank's shares.

EBRD Finance Summary

EUR 25,000,000.00

Total Project Cost

EUR 25,000,000.00

Additionality

Key sources of additionality under the project are (i) financing structure (medium-term tenor in support of investment activity, including in the local currency) and (ii) knowledge, innovation and capacity building (technical assistance under the programme will support timely realisation of EU-compliant investments in Ukraine).

Environmental and Social Summary

Categorised FI (2019 ESP). Ukrgasbank is an existing client of the Bank's Trade Facilitation Programme. The Environmental and Social (E&S) due diligence included review of the E&S questionnaire which was submitted by the client and interview with the client's dedicated staff. Ukrgasbank already has their environmental and social risk management procedures developed in compliance with IFC requirements and the ESDD confirmed their satisfactory performance and implementation. The existing E&S risk management system will only need to be updated to address some specific requirements of the EBRD. Potential renewable energy projects under this transaction will need to follow the E&S eligibility criteria for such investments. Ukrgasbank will be required to continue to comply with the Performance Requirements (PR) 2, 4 and 9, adhere to the expanded EBRD E&S Exclusion List and Referral List introduced with ESP 2019 and submit annual E&S reports to the EBRD on E&S matters and on the implementation of the PRs. 

Technical Cooperation and Grant Financing

MSME sub-borrowers will benefit from financial incentives of up to 15 per cent of the lower of sub-loan disbursed amount or investment cost for eligible sub-projects, while the bank will receive technical assistance from dedicated consultants on the preparation and implementation of investment projects. 

Company Contact Information

Maya Ganelina
mganelina@ukrgasbank.com
+380 50 353 5112
+380 44 594 1163
https://www.ukrgasbank.com/
16-22, B. Khmelnytskoho St, Kyiv, 01030, Ukraine

Implementation summary


PSD last updated

05 May 2021

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and Compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

 

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