Project Description
Food Security Guarantee ("FSG", the "Facility") in the form of an unfunded risk-sharing instrument covering 60 per cent of the credit risk in newly originated sub-loans with the total value of EUR 8.75 million equivalent to be originated by JSC OTP Bank in Ukraine ("OTPU").
Project Objectives
The Facility will support food security in Ukraine by enhancing OTPU's lending capacity and providing much needed access to finance for Ukrainian private companies operating in critical agri-related industries (farming, food and agri produce processing, transportation and imports), with the ultimate goal of preserving livelihoods in the country.
Transition Impact
ETI score: 70
The Facility will support the Resilient and Inclusive TI qualities. The Resilient quality stems from credit enhancement mechanism provided by the FSG, which enables OTPU to finance Ukrainian agricultural value chains to preserve food security, while shielding their loan portfolio for excessive risk prevailing in the current volatile conditions. The Facility will also support the Inclusive quality by providing funding to the Ukrainian businesses directly affected by the conflict, aimed at safeguarding their human and organisational capital.
Client Information
OTP BANK PJSC
JSC OTP Bank in Ukraine ("OTPU") is a 100 per cent owned subsidiary of OTP Bank Plc., Hungary. OTPU is a universal bank offering conventional banking products to SME/corporate (70 per cent of the loan book) and retail (30 per cent) clients. The bank was ranked 9th in Ukraine with 3.4 per cent share of total banking assets as of the end of 2021.
EBRD Finance Summary
EUR 5,250,000.00
Total Project Cost
EUR 8,750,000.00
Additionality
Response to the war in Ukraine: the Facility is provided in the extraordinary circumstances of the ongoing war on Ukraine, serving as a significant risk mitigating instrument to enable financing of critical agri-related industries.
Environmental and Social Summary
Categorised FI (ESP 2019). OTPU is an existing client of EBRD and performance on environmental and social (E&S) issues to date has been satisfactory. Annual reporting and previous E&S due diligence demonstrated that the bank has a written Environmental Management Policy, staff nominated to manage E&S issues, adequate E&S risk management procedures built into the credit appraisal process and appropriate monitoring for E&S issues both within the portfolio and the institution. The management system is applied to the entire commercial lending portfolio. OTPU has also provided information to confirm compliance with PRs 2 and 4. OTPU should note requirements of the revised EBRD E&S Policy notably in relation to the updated E&S Exclusion List, the E&S Referral List and the requirement to apply PRs 1 through 8 and 10 to any Category A projects considered. OTPU should continue its compliance with PRs 2, 4 and 9 and the submission of annual E&S reporting to the EBRD (to the extent possible).
Technical Cooperation and Grant Financing
Non-TC: Non-TC funds for the First Loss Risk Cover ("FLRC") are provided to EBRD by Financial Intermediary and Private Enterprises Special Fund under a specific window for the EBRD's War on Ukraine Response Package.
Company Contact Information
Tetiana Petrunok
tetiana.petrunok@otpbank.com.ua
+38 044 490 05 59
https://www.otpbank.com.ua/
43 Zhylyanska str., Kyiv-33, Ukraine, 01033
PSD last updated
29 Apr 2022
Understanding Transition
Further information regarding the EBRD’s approach to measuring transition impact is available here.
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