• EBRD provides €50 million unfunded portfolio risk-sharing facility for Oschadbank
• Facility will unlock €200 million of new financing for Ukraine’s private sector
• EBRD enabled close to €900 million of such financing in wartime Ukraine by end 2023

The European Bank for Reconstruction and Development (EBRD) is extending a €50 million unfunded portfolio risk-sharing facility to Oschadbank to unlock €200 million of new financing for Ukraine’s private sector amidst the ongoing war in the country.

The agreement was signed in Kyiv on the margins of a conference on the reintegration of war veterans into civilian life, which was partnered by Oschadbank.

The EBRD’s facility will cover up to 50 per cent of Oschadbank’s credit risk on newly issued sub-loans worth €200 million to private businesses operating in Ukraine.

Total enabled financing under similar EBRD guarantees, signed since the start of Russia’s full-scale war on Ukraine, amounted to close to €900 million by the end of 2023. 

“The EBRD’s guarantee enhances Oschadbank’s lending capacity and enables it to provide much-needed funding to Ukrainian private companies operating in critical industries such as agriculture, manufacturing, construction, transport and pharmaceuticals,” said the EBRD’s Managing Director for Financial Institutions Francis Malige.

He added , “This will support companies to continue their operations and safeguard livelihoods, which is crucial for fostering economic resilience and enabling Ukraine to rebuild in the aftermath of the war.”

“We thank our EBRD partners. Instruments like these give Oshchadbank the opportunity to support business even in conditions when, due to the realities of war, there is a lack of assets to pledge. Risk-sharing programmes are now extremely important, because without credit support for entrepreneurship, one cannot hope for the stability of the Ukrainian economy. Loans are in great demand among our clients,” commented  Serhii Naumov, Chairman of the Management Board of Oschadbank.

The United States of America, through the Crisis Response Special Fund (CRSF), will provide first-loss risk cover to partially mitigate the risk associated with the new exposure. 

Up to 20 per cent of the risk-shared loans will support private micro, small and medium-sized  enterprises’ (MSMEs’) long-term investments in  EU-compliant and green technologies, improving Ukrainian MSMEs’ competitiveness on domestic and foreign markets.

Eligible sub-borrowers will also receive EU-funded technical assistance and investment incentives upon completion of their investment projects under its EU4Business initiative.

MSMEs that suffered destruction and/or loss of assets due to the war on Ukraine will be eligible to receive additional investment incentives for reconstruction of their businesses as part of the EBRD-EU Enterprise Renaissance  Window within the EU4Business initiative.

As part of the investment, the EBRD will work with Oschadbank to develop a veteran reintegration support programme for the lender and its clients. This will include developing veteran-friendly Human Resources (HR) policies and practices and a more inclusive financial services offering, as well as physical adaptations required by war veterans and other persons with disabilities and/or trauma. Eligible MSMEs will receive additional investment incentives provided by the CRSF to partially compensate their eligible investment costs, facilitating reintegration and financial inclusion of war veterans.

JSC State Savings Bank of Ukraine, commonly known as Oschadbank, is a universal, 100 per cent state-owned bank. It is the second- largest bank in Ukraine, providing services to more than 6.2 million retail customers, more than 4,000 corporate clients, and 224,000 MSMEs .

The EBRD has deployed €4 billion in Ukraine since the start of the war. As well as support for the private sector, its strategic priorities in the country are supporting energy security, vital infrastructure, food security and trade.