EBRD to cover up to 50% of risks on new Ukrgasbank loans for 50 mln euros
MOSCOW. Feb 28 (Interfax) - The European Bank for Reconstruction and Development (EBRD) will assume up to 50% of the credit risks on newly issued loans of the Kiev-based state-owned Ukrgasbank for a total amount equivalent to 50 million euros.
The EBRD's Board of Directors approved this non-financial tool for portfolio risk sharing in February, Ukrainian media reported, citing the EBRD's website.
The guarantee funding will be provided in two equal disbursements, the second of which is unreserved, it said.
The project will include a sub-limit under the SME Competitiveness Program in the European Union Eastern Partnership member states (EaP SMEC), which will total up to 10 million euros or 20% of the covered portfolio. The funds are intended to fund long-term capital investments by micro-, small- and medium-sized enterprises (MSMEs) that upgrade their technology and equipment to EU standards, including investments in sustainable and green technologies (at least 70% of the EaP SMEC sub-limit), which will make these enterprises more competitive. Sub-borrowers that will meet the requirements will also receive EU-financed technical assistance and grant support in the form of investment incentives upon completion of their investment projects.
The EBRD's funding totals 12.5 million euros.
The EBRD said that the facility would primarily be used to support lending to Ukrainian private companies operating in primary and secondary agriculture, as well as other critical sectors such as food processing, retail and logistics.
According to the National Bank of Ukraine, as of January 1, 2024, Ukrgasbank ranked fifth in terms of assets (UAH 190.28 billion) among 63 banks operating in the country. Ukrgasbank is a universal bank, which has a network of 221 branches throughout the country and is one of the leaders on the market of green and trade finance, the EBRD said. The authorities, which are represented by the Finance Ministry, control 94.9% of Ukrgasbank's shares.