EBRD to issue 60 mln euros of guarantees to PrivatBank for loans to key sectors in Ukraine

MOSCOW. Aug 10 (Interfax) - The European Bank for Reconstruction and Development has signed an agreement with PrivatBank, Ukraine's largest lender, on guarantees of 60 million euros to support lending to agribusiness and other critical industries in Ukraine, Ukrainian media reported, quoting a statement posted on the EBRD website.

The guarantees will enable the bank to issue up to 240 million euros of loans to businesses.

The EBRD, which has committed to raise its investment in Ukraine to 3 billion euros in 2022-2023, shares risk on its own investments there with donors and partners. In this case half of its risk from the new exposure will be mitigated by First Loss Risk Cover from the EBRD Crisis Response Special Fund, the bank said.

PrivatBank said there were two elements to the risk sharing program between the EBRD and the bank. For the first - at least 80% of the total portfolio of shared risks - this instrument will help provide access to financing for working capital and investment purposes for micro, small, medium and large enterprises operating in such critical industries as agriculture and agricultural services, food and light industry, production and services in the field of construction, transport and logistics, tourism and culture and retail trade.

Under the second element, up to 20% of risk-sharing loans will support long-term investment by private micro, small and medium-sized enterprises in EU-compliant environmental technologies. Borrowers will also receive EU-funded technical assistance and investment incentives upon completion of their investment projects.

The state-owned PrivatBank serves more than 18 million active clients, and 70% of Ukrainians use its services. The bank is a leader in the retail segment, has a network of more than 1,100 branches, 5,000 ATMs, 10,000 self-service terminals and 223,000 POS-terminals throughout Ukraine.

The EBRD is the biggest institutional investor in the Ukrainian economy. It allocated 1.7 billion euros to the country in 2022 and attracted another 200 million euros in support from partner financial institutions.