(BRIEF) In a bid for Ukraine’s personal sector amid the ongoing conflict, the European Bank for Reconstruction and Development (EBRD) is extending a €50 million unfunded portfolio threat sharing service to Oschadbank. The initiative aims to unlock €200 million in new funding for Ukraine’s personal corporations, covering critical sectors such as agriculture, manufacturing, construction, shipping, and pharmaceuticals. The agreement, signed in Kyiv, represents a very important step towards economic resilience and post-war recovery. With support from the United States through the Special Crisis Response Fund, the facility will provide first-loss policies and assistance to micro, small and medium-sized enterprises (MSMEs) investing in green and EU-compatible technologies. In addition, eligible corporations will get EU-funded technical assistance. investment assistance and incentives, contributing to economic stability, and efforts to reintegrate veterans into the Ukrainian workforce.
(PRESS RELEASE) LONDON, April 10, 2024 — /EuropaWire/ — The European Bank for Reconstruction and Development (EBRD) is extending a €50 million unfunded portfolio risk-sharing facility to Oschadbank, to €200 million in new funding for staff in Ukraine. sector in the midst of the ongoing war in the country.
The agreement was signed in Kiev on the sidelines of a convention on the reintegration of ex-combatants into civilian life, in which Oschadbank is a partner.
The EBRD’s credit line will cover up to 50% of Oschadbank’s credit risk in new secondary loans of €200 million to private companies operating in Ukraine.
The total funding authorised under the EBRD guarantees, signed since the start of Russia’s full-scale war against Ukraine, amounted to almost €900 million at the end of 2023.
“The EBRD guarantee strengthens Oschadbank’s creditworthiness and allows it to provide much-needed financing to Ukrainian private companies operating in critical sectors such as agriculture, manufacturing, construction, shipping and pharmaceuticals,” said Francis Malige, EBRD’s Director General of Financial Institutions.
He added: “This will help businesses continue to operate and maintain their livelihoods, which will foster economic resilience and allow Ukraine to rebuild after the war. “
“We thank our EBRD partners. Instruments like these give Oshchad the ability to maintain business even in situations where, due to the realities of war, there is a lack of assets to pledge. Risk-sharing schemes are now incredibly important. Because without credit for entrepreneurship there is no hope of prosperity in the Ukrainian economy. Loans are the most requested by our customers,” said Sergii Naumov, Chairman of the Board of Directors of Oschadbank.
The United States of America, through the Special Crisis Response Fund (CRSF), will provide a first-loss threat policy to mitigate the threat related to new exposure.
Up to 20 percent of risk-sharing loans will be earmarked for long-term investments through individual micro, small and medium-sized enterprises (MSMEs) in green and EU-compatible technologies, improving the competitiveness of Ukrainian MSMEs in domestic and foreign markets. . .
Eligible sub-borrowers will also get EU-funded technical assistance and investment incentives upon completion of their investment projects in its EU4Business initiative.
MSMEs that have suffered destruction and/or loss of assets due to the war against Ukraine will be eligible to receive increased investment incentives for the reconstruction of their businesses under the EBRD-EU Business Renaissance window within the EU4Business initiative.
As a component of this investment, the EBRD will work with Oschadbank to expand a Veterans Reintegration Support Program for the lender and its customers. This will come with the progression of veteran-friendly human resources (HR) policies and practices, more inclusive monetary offerings, and physical hotels required by veterans and others with disabilities and/or trauma. Eligible MSMEs will obtain additional investment incentives provided through the CRSF to partially offset their eligible investment costs, thereby facilitating the reintegration and monetary inclusion of veterans.
The State Savings Bank of Ukraine JSC, commonly known as Oschadbank, is a universal bank one hundred percent state-owned. It is the second largest bank in Ukraine and serves more than 6. 2 million retail customers, more than 4,000 businesses, and 224,000 MSMEs.
The EBRD has deployed €4 billion in Ukraine since the start of the war. In addition to focusing on the private sector, its strategic priorities in the country are electricity security, critical infrastructure, food security, and trade.
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SOURCE: EBRD
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