An up to four-year amortising senior unsecured loan of up to €25 million equivalent to be provided to JSC "Oschadbank" for on-lending to eligible micro, small and medium-sized enterprised ("MSMEs") under SME Competitiveness Programme in the European Union's (EU) Eastern Partnership. In addition to long-term financing, eligible sub-borrowers will receive technical assistance funded by the EU and grant support in the form of investment incentives upon the completion of their investment projects.
The project will enable the company 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 per cent of all financed sub-loans are expected to be compliant with EBRD Green Economy Transition (GET) approach.
ETI score: 75
Competitive: the Company will expand its MSME portfolio, with a focus on financing priority investments complying with EU directive(s), ultimately facilitating competitiveness of Ukrainian MSMEs; and
Resilient: the Company is expected to maintain adequate MSME portfolio quality.
OSCHADBANK JSC (STATE SAVINGS BANK OF UKRAINE)
JSC Oschadbank is a 100 per cent state-owned bank, ranking the second largest by assets (13% market share) and deposits (13% market share) as of YE2020 out of 74 banks. With around 1,800 branches and over 27,000 employees, it provides services to over 3,000 corporate, almost 200,000 MSME and 7 million retail customers.
EBRD Finance Summary
Total Project Cost
Key sources of additionality under the project are:
- Financing structure: long term tenor supporting longer investments, including in the local currency
- 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 (ESP 2019). Oschadbank is an existing client of EBRD and performance on environmental and social (E&S) issues, in the context of existing operations, has been satisfactory. Given the focus of the proposed project on MSMEs, and the aim to upgrade technology and equipment to meet EU standards, it is not anticipated that the project portfolio will be associated with significant E&S risks. Any such risks will be mitigated by the application of the EBRD's Performance Requirements 2, 4 and 9, and in particular, the implementation of an agreed environmental and social management system (ESMS). EBRD will work with Oschadbank to review the current ESMS and to assist in further developing the ESMS as required to ensure the system is appropriate for the proposed project and will be applied to all business lines across the entire portfolio. E&S risks will be additionally addressed through consultancy support provided to ensure that sub-projects meet the aims of the facility i.e. compliance with EU standards. The consultants will also provide support to ensure that national requirements on environment, health and safety and labour are met. Finally, Oschadbank will have to provide annual E&S reporting to the EBRD.
Technical Cooperation and Grant Financing
MSME sub-borrowers will benefit from financial incentives (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 towards investment projects preparation and implementation.
Company Contact Information
+380 44 249-31-03 +380 44 247-86-95
12-G, Hospitalna str., Kyiv, UKRAINE, 01001
PSD last updated
07 Jun 2021
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