EBRD plans to cover up to 50% of risk in Ukrainian Oschadbank's new loans for 200 mln euros

MOSCOW. Feb 2 (Interfax) - The European Bank for Reconstruction and Development (EBRD) intends to cover up to 50% of the credit risk in sub-loans with the total value of 200 million euros to be originated by state-owned Oschadbank, Kiev.

The EBRD Board of Directors will review the project on February 7, Ukrainian media said, citing the bank's website.

The financing will be delivered in three tranches: Tranche A (committed) includes 12.5 million euros of the EBRD's guarantee to cover 50 million euros of the Covered Portfolio, Tranches B and C (uncommitted) will include up to 18.75 million euros of the EBRD's guarantee to cover 75 million euros of the Covered Portfolio each, according to the bank.

The Project will include a sub-limit of up to 40 million euros or 20% of the Covered Portfolio to finance long-term capital investments of micro-, small-, and medium sized enterprises to upgrade their technologies and equipment to EU standards, including investments in sustainable and green technologies (at least 70% of the sub-limit), thereby enhancing businesses' competitiveness.

The Facility will be used to support lending to Ukrainian private companies operating in the primary and secondary agriculture and other critical industries, such as food processing, retail and logistics, the EBRD said.

According to National Bank of Ukraine data, Oschadbank was Ukraine's second largest bank by total assets (346.850 billion hryvni) among the country's 63 banks that operated as of November 1, 2023, also retaining first place among all Ukrainian banks by the number of branches (1,182).