EBRD intends to cover up to 50% of risk on new loans issued by Ukraine's OTP Bank for 120 mln euros

MOSCOW. Feb 8 (Interfax) - The European Bank for Reconstruction and Development (EBRD) plans to cover up to 50% of the risk on new loans issued by OTP Bank totaling the equivalent of 120 million euros.

The EBRD Board of Directors plans to consider the project on April 10, Ukrainian media reported, citing the EBRD website.

According to the EBRD, the guarantee funding will be provided in two equal tranches each including 15 million euros of EBRD's guarantee to cover 60 million euros of the covered portfolio with the second tranche yet to be agreed.

The project also includes a sub-limit of up to 18 million euros, or 15% of the covered portfolio, to finance long-term capital investments of micro-, small- and medium-sized enterprises (MSMEs) to upgrade their technologies and equipment to the European Union standards, including investments in green technologies (70% of the sub-limit is allocated for this purpose), as well as enhancing businesses' competitiveness.

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

The National Bank of Ukraine said that as of November 1, 2023, OTP Bank ranked eighth (UAH 108.56 billion) in terms of total assets among 63 banks operating in Ukraine.