EBRD to cover up to 50% of risk on newly issued sub-loans worth 200 mln euros by Ukraine's Oschadbank

MOSCOW. April 10 (Interfax) The European Bank for Reconstruction and Development is extending guarantees of 50 million euros to the state-owned Oschadbank to cover up to 50% of its risk on newly issued sub-loans worth 200 million euros to private Ukrainian businesses, Ukrainian media reported, quoting an EBRD press release on Wednesday.

"Instruments like these give Oschadbank the opportunity to support business even in conditions of crisis when [...] there is a lack of assets to pledge. Loans are in great demand among our clients," Sergei Naumov, Chairman of the Management Board of Oschadbank, was quoted as saying.

The United States, through the Crisis Response Special Fund (CRSF), will provide first-loss risk cover to partially mitigate the risk associated with the agreement.

According to the agreement, up to 20% of the risk-shared loans will support long-term investments by private micro-, small- and medium-sized enterprises in EU compliant and green technologies, improving the competitiveness of Ukrainian MSMEs on domestic and foreign markets.

Eligible sub-borrowers will also receive EU-funded technical assistance and investment incentives upon completion of their investment projects under the EU4Business initiative.

Oschadbank ranked second among Ukraine's 63 functioning banks by assets valued at UAH 369.56 billion as of February 1, 2024, according to the National Bank of Ukraine. It was among the top five by net profit with UAH 4.75 billion.

The EBRD said it had allocated 900 million euros of new financing backed by such guarantees between the start of the crisis in Ukraine and the end of 2023.