- EBRD’s Trade Facilitation Programme wins Best Deal of 2022 from Global Trade Review
- Bank also wins Best Development Bank in Trade 2022 award
- Awards acknowledge key EBRD work to maintain vital exports in wartime Ukraine and more
The EBRD’s Trade Facilitation Programme (TFP) has won Global Trade Review’s Best Deal of 2022 Award for a deal supporting the import of agricultural machinery in Ukraine. The transaction was part of the Bank’s commitment to helping Ukraine, a major food producer, maintain its vital exports and address global food security in wartime.
The Bank also won the Global Trade Review’s Best Development Bank in Trade 2022 Award. Global Trade Review is an important news source, publisher and event organiser for the global trade, commodity, export and supply-chain finance industries.
In May 2022, the EBRD rolled over a €4 million guarantee, allowing LLC Technotorg, a key distributor of agricultural machinery in Ukraine, to continue importing goods into the country. The guarantee was issued in favour of ING Bank, the confirming bank, in support of Ukrgasbank, the issuing bank, covering 100 per cent of the political and commercial payment risk of the issuing bank. The deal is included in the portfolio of transactions covered by the EBRD Shareholder Special Fund. It was completed and extended in the face of significant political and economic trade barriers.
Benefits of the deal included: meeting the supply needs of Ukrainian farmers at the peak of Russia’s invasion of Ukraine; ensuring that Ukrainian farmers were equipped to farm and harvest; removing bottlenecks so that Ukraine could supply vital commodities to economies where food security issues persisted; maintaining key imports into Ukraine; and indirectly helping the economy to generate continued capital inflows during the war.
Ukraine’s agricultural sector accounts for 11 per cent of the country’s gross domestic product (GDP), nearly 20 per cent of its labour force and almost 40 per cent of total exports. The war has impacted the country’s ability to harvest and export produce to its trading partners globally. In response to the war, in April 2022, the EBRD increased its financing envelope for Ukraine under the TFP by 40 per cent to €316 million.
The TFP, launched in 1999, aims to promote foreign trade to, from and between the economies where the EBRD invests. It currently encompasses 123 local banks in 27 economies where the EBRD invests, with limits exceeding €5 billion in total and more than 800 confirming banks worldwide. Through the TFP, the EBRD provides guarantees to international confirming banks and short-term loans to selected local banks and factoring companies for on-lending to local exporters, importers and distributors.
In 2022, the TFP facilitated over 1,700 transactions worth a record €3.6 billion with 91 partner banks in 27 countries. TFP’s record year has been driven by the programme’s proactive response to the war in Ukraine and global political and economic uncertainty. In 2022, the EBRD provided Ukraine with €459 million of trade finance for crucial goods for the Ukrainian economy, such as the import of agricultural machinery, fertilisers and fuel.
The programme also supported over 400 transactions related to food security totalling over €1 billion in value. In the same year, the EBRD also completed 95 transactions supporting the import/export of medicines and medical equipment, totalling more than €60 million and supported over 190 green trade finance transactions totalling more than €480 million, more than a 30 per cent increase from 2021.
The Bank has committed to investing €3 billion in Ukraine in 2022-23. In 2022, with the support of donors and shareholders, it deployed €1.7 billion and mobilised a further €200 million from partner financial institutions. Its priorities in supporting the country’s real economy are food and energy security, trade, vital infrastructure and the private sector.