7 Dec 2022 12:38

EBRD gave Ukraine over 1 bln euros, mobilized over 1.4 bln euros in donor support as of late November

MOSCOW. Dec 7 (Interfax) - The European Bank for Reconstruction and Development (EBRD) has reaffirmed its commitment to invest three billion euros in Ukraine in 2022-2023, which is 50% more than the bank had invested in Ukraine before February 2022, EBRD President Odile Renaud-Basso said in an interview with Ukrainian media.

"By the end of November, the Bank had already undertaken well over one billion euros of activity in the country for the year 2022, and our full 2022 results will be announced at the beginning of next year," Renaud-Basso said.

"Half of that was on our own balance sheet, the other half in the form of generous support from our donors and partners in the form of funds, first loss or risk-sharing guarantees," she said.

In total, the EBRD has already mobilized more than 1.4 billion euros in donor support, including the 1.1 billion euros of funding that has already been secured and signed, and another 600 million euros in pledges, she said.

When listing the donors, Renaud-Basso named the United States, which has contributed $500 million to the Ukraine Crisis Response Fund, Norway, which is providing 200 million euros through the EBRD to support Ukraine's energy and food security, and the Netherlands, which has disbursed a 72-million-euro grant to the Ukrainian power grid operator, Ukrenergo.

Furthermore, the United Kingdom is providing a 54.4-million-euro guarantee to support an EBRD loan for Ukraine, while Canada and Germany have extended guarantees of 36.5 million euros and 50 million euros, respectively to support the EBRD's 300-million-euro loan to help Naftogaz of Ukraine procure gas for the winter season, she said.

In addition, the European Union has provided 66.8 million euros in guarantees to support the EBRD's loans for Ukrenergo, Ukrzaliznytsia (Ukrainian Railways) and Farmak, the EBRD president said. "Other donors include France (which will be providing 100 million euros of unfunded guarantees to Naftogaz and Ukrzaliznytsia), Spain (which committed to extending up to a 100- million-euro unfunded guarantee to support food security and the municipal sector), Italy, Japan, Denmark, Switzerland, and others," Renaud-Basso said.

When commenting on next year's efforts, Renaud-Basso said that the EBRD will continue to strongly support its clients and vital infrastructure.

She also emphasized the importance of the private sector's involvement.

"The needs for rebuilding the Ukrainian economy are huge, and they cannot all be covered by international financial institutions and multilateral development banks. The participation of private investors is crucial," she said.

The EBRD is focused on supporting the real economy in addition to the budgetary support being provided by other international partners, she said.

"Our investments target five main areas - energy security, trade finance, vital infrastructure and support to municipalities, food security, and the corporate sector (for instance the pharmaceutical sector)," the EBRD president said.

It is still too early to say how priorities and investments may change in 2023, but the bank will in any case continue to strongly support the real economy, Renaud-Basso said.

Renaud-Basso said that the bank's goal is to help cover capital shortages in Ukrainian banks and thus support the efficiently functioning banking sector of Ukraine.

When asked whether the EBRD could help increase the capitalization of Raiffeisen Bank and Ukrsibbank, as the EBRD is a minority shareholder of both banks, Renaud-Basso said that the EBRD will consider providing these banks with new tools for raising capital when and if they require it.

The goal remains the same, i.e. return to the growth and active financing of the real economy, she said, adding that decisions will be adopted together with partners holding controlling stakes in these banks - Raiffeisen and BNP.

"When the situation permits, and when the state revisits the Oschadbank privatization strategy, we will resume our dialogue with the authorities regarding the EBRD's role in reducing the state-owned share in the banking sector," Renaud-Basso said after being asked whether the EBRD remains interested in entering the charter capital of the Oschadbank state-owned bank.

The EBRD president, however, declined to comment on the liquidation of Megabank, where the EBRD held a minority stake, adding that this individual operation with a private client is "a sensitive commercial issue."