EBRD expects capital increase by year-end to provide more support to Ukraine - statement

MOSCOW. Oct 23 (Interfax) - The Board of Governors of the European Bank for Reconstruction and Development (EBRD) has agreed to work on a capital increase in the range of 3 billion to 5 billion euros by the end of 2023 to sustain support to Ukraine during the crisis and in reconstruction, Ukrainian media reported citing an EBRD statement on Monday.

"If approved, [the decision] could give the EBRD additional resources to invest," it said.

An agreement for a $100 million loan signed with Ukraine's MHP agricultural holding on Monday to refinance Eurobonds increased the overall sum provided to Ukraine's real economy sector to the target of 3 billion euros planned previously for 2022-2023, the statement said.

"The needs in Ukraine are huge, and we will continue to support the economy for as long as it takes," the statement quoted EBRD Managing Director for Eastern Europe and the Caucasus Matteo Patrone as saying.

It was reported earlier that the EBRD provided Ukraine with 1.7 billion euros in 2022.

The EBRD described support for the private sector and support for trade as two of its five investment themes in Ukraine during the crisis.

In particular, with these instruments, the EBRD has supported nearly 800 million euros of trade though the Trade Facilitation Program in addition to more than 700 million euros of new lending to municipalities and private companies operating in agribusiness and other critical sectors of the Ukrainian economy, it said.

Another priority area is reinforcing Ukraine's energy security, it said.  "With the support of donors, the Bank has provided 520 million euros for the electricity transmission company Ukrenergo's liquidity, linked to market reforms, and 300 million euros to the energy company Naftogaz, as part of a package of 500 million euros with donor support. In addition, at the Ukraine Recovery Conference in June, the Bank signed Memoranda of Understanding on providing 600 million euros of new financing for Ukrenergo, Naftogaz and Ukrhydroenergo, the country's hydropower entity," it said.

As regards Ukraine's vital infrastructure, the EBRD signed loans totaling 250 million euros to Ukrainian Railways to support its operations and upgrade Ukraine's railway links with the European Union, it said.

Apart from that, as part of efforts to improve road and rail supply routes in and out of Ukraine amid uncertainty over the main shipping routes through Black Sea ports such as Odessa, the EBRD is providing 182 million euros to upgrade a road section between Lvov and Rava-Ruska on the Polish border, in line with the European Solidarity Lanes initiative to boost road and rail access, in which the EBRD is also investing 300 million euros, it said.

As for food security, the EBRD is focused on improving Ukraine's grain export facilities, as well as making finance available throughout the food chain and maintaining livelihoods, it said.