On 10 September, the European Bank for Reconstruction and Development (EBRD) announced it was extending its unfunded portfolio risk-sharing facility to Raiffeisen Bank Ukraine (RBU). This facility will unlock €200 million of new financing for Ukrainian businesses.
The EBRD’s facility will cover up to 50 per cent of Raiffeisen’s credit risk on new finance worth €200 million for businesses operating in Ukraine. Through this credit enhancement mechanism, RBU will provide subloans to companies in critical industries such as agribusiness, manufacturing, pharmaceuticals, transport and logistics. This is the fourth such EBRD facility extended to RBU.
The new facility will enhance the competitiveness of micro, small and medium-sized enterprises in Ukraine. Twenty per cent of the subloans covered by the EBRD guarantee will be provided to those businesses for long-term investments in EU-compliant and green technologies. Eligible sub-borrowers will also receive EU-funded technical assistance and investment incentives such as grants on completion of their investment projects under the EU4Business initiative.
Higher levels of incentive will be provided for businesses and households most affected by the war, as well as sub-borrowers, facilitating the reintegration into the workforce of war veterans, people living with disabilities, internally displaced persons and/or those located in territories most acutely affected by the Russian full-scale war on Ukraine.
RBU has also committed to supporting war veterans (both as employees and as clients). It will implement key recommendations set out in the ‘Guidance Note to Support Ukrainian Financial Institutions in Becoming More Inclusive, Safer, and More Accessible Employers’, which was developed by the EBRD and National Bank of Ukraine.
The EBRD facility will be backed by partial first-loss risk cover from France, as well as the EU under its Ukraine Investment Framework.
Since the start of Russia’s full-scale war on Ukraine, the EBRD has enabled more than €3 billion of finance for Ukrainian borrowers through 37 similar facilities with 12 partner financial institutions.
The EBRD is Ukraine’s largest institutional lender, having invested more than €8 billion in its real economy since the start of the war in February 2022. A further €4 billion capital increase has been secured to continue supporting the country’s economy during wartime and for future reconstruction efforts.
