New unfunded guarantee, supported by the European Union’s SME Competitiveness programme, will enable €30 million in loans to private businesses.
- EBRD extends new risk-sharing facility with ProCredit Bank Ukraine
- EBRD guarantees €30 million in 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 Union and the European Bank for Reconstruction and Development (EBRD) are expanding their cooperation with ProCredit Bank Ukraine by issuing new risk-sharing instruments and investment incentives with the bank, supporting continued access to finance for enterprises in Ukraine.
Under this new cooperation with ProCredit Bank, the EBRD is providing an unfunded risk sharing instrument to ProCredit Bank of €7.5 million to back up to 50% of the credit risk of €30 million in newly originated financing to private businesses in Ukraine by ProCredit Bank, subject to a portfolio cap of 50%.
Up to 15% of the risk shared sub-loans will be directed to small and medium enterprises (“SMEs”) wishing to invest in EU compliant sustainable technologies. These SME investments will be supported by technical assistance and investment incentives funded by the European Union under the EU SME Competitiveness Programme, enhancing the competitiveness of Ukrainian SMEs on domestic and foreign markets.
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, transport and logistics, energy security, and retail. Ukrainian companies are in continuous need of liquidity support to finance their operations and regular equipment maintenance and renewal, particularly those operating in the import and export of goods. With access to financing severely constrained since the beginning of the war, the EBRD’s guarantee will allow ProCredit Bank to provide crucial support to Ukrainian enterprises and preserve livelihoods in the country during the ongoing war.
JSC ProCredit Bank Ukraineis a 100%-owned subsidiary of ProCredit Holding AG & Co. KGaA, and one of the market leaders in financing of small and medium-sized (SME) businesses in Ukraine. SMEs account for more than 98% 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 deploy €3 billion there in 2022-23 and has so far mobilised €1.5 billion from international donors. The EBRD’s primary focus in Ukraine in war time is on maintaining energy and food security, restoring critical infrastructure at national and municipal level, providing trade finance and supporting the private sector.
The SME Competitiveness Programme is an EU-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.
- Publication date
- 13 September 2023
- Directorate-General for Neighbourhood and Enlargement Negotiations