- EBRD extends new risk-sharing facility with ProCredit Bank Ukraine
- EBRD guarantees €30 million of loans to support lending to critical industries in Ukraine
- Technical assistance and investment incentives funded by the European Union to promote SME competitiveness and preserve livelihoods
The European Bank for Reconstruction and Development (EBRD), partially supported by the European Union, is expanding its cooperation with ProCredit Bank Ukraine by issuing new risk-sharing instruments with the bank, supporting continued access to finance for enterprises in Ukraine.
The EBRD is providing an unfunded risk-sharing instrument to ProCredit Bank in the amount of €7.5 million. This guarantee will back up to 50 per cent of the credit risk of €30 million in newly originated financing to private businesses in Ukraine from ProCredit Bank, subject to a portfolio cap of 50 per cent.
It follows similar facilities signed with ProCredit Bank in May and November 2022, and brings the total volume of the EBRD’s enabled financing in Ukraine to €738 million (under similar guarantees) since the start of the war.
The EBRD’s guarantee will help ProCredit Bank Ukraine to continue lending to Ukrainian private companies operating in critical industries such as agriculture and agricultural services, manufacturing, food production, transport and logistics, energy security and retail. Ukrainian firms – especially those that import and export goods – are in continuous need of liquidity support to finance their operations and regular equipment maintenance and renewal. With access to financing severely constrained since the war began, the EBRD’s guarantee will allow ProCredit Bank to provide crucial support to Ukrainian enterprises and preserve livelihoods in the country during the war.
Up to 15 per cent of the risk-shared sub-loans will be directed to small and medium-sized enterprises (SMEs) seeking to invest in EU-compliant sustainable technologies. These SME investments will be supported by technical assistance and investment incentives funded by the European Union (EU) under the EU SME Competitiveness Programme, enhancing the competitiveness of Ukrainian SMEs on domestic and foreign markets.
JSC ProCredit Bank Ukraine is a 100 per cent-owned subsidiary of ProCredit Holding AG & Co. KGaA, and a market leader in the financing of SMEs in Ukraine. SMEs account for more than 98 per cent of the bank’s loan book.
The EBRD, Ukraine’s biggest institutional investor, deployed €1.7 billion in Ukraine and mobilised a further €200 million from partner banks in 2022. The Bank has committed to deploying €3 billion there in 2022-23 and has so far mobilised €1.5 billion from international donors. The EBRD’s primary focus for Ukraine during the war is on maintaining energy and food security, restoring critical infrastructure at the national and municipal level, providing trade finance and supporting the private sector.
The SME Competitiveness Programme is an EU co-funded programme, which focuses on incentivising capex investments of highly advanced technologies and processes and encouraging best practice among successful growing businesses in order to ensure that small and medium-sized enterprises (“SMEs”) active in the Eastern Partnership Countries can increase their competitiveness.