EBRD plans to cover up to 50% of risk in Ukrainian OTP Leasing's new sub-leases for 80 mln euros

MOSCOW. May 2 (Interfax) - The European Bank for Reconstruction and Development (EBRD) may provide a risk-sharing instrument covering up to 50% of the credit risk in newly originated sub-leases with the total value of up to 80 million euro equivalent to be originated by OTP Leasing LLC in Ukraine.

The financing will be delivered in two equal tranches each amounting to up to 40 million euros of the Covered Portfolio, the EBRD. Only one tranche has been committed, it said.

The project will include a sub-limit to finance long-term capital investments of micro-, small-, and medium sized enterprises (MSMEs) to upgrade their technologies and equipment to EU standards, including investments in sustainable and green technologies (at least 70% the sub-limit), thereby enhancing MSMEs' competitiveness. The size of the sub-limit has not been disclosed.

"Eligible sub-borrowers will also receive EU funded technical assistance and grant support in the form of investment incentives upon the completion of their eligible investment projects," the EBRD said.

The project will focus on lending to Ukrainian companies operating in the primary and secondary agriculture and other critical industries, including food processing, retail, logistics, etc., it said.

OTP Leasing was founded in June 2008 and is part of Europe's OTP Group. The company held an around 41% market share in terms of leading portfolio ($268 million) in 2023.