- EBRD provides new unfunded portfolio risk-sharing facility to ProCredit Bank Ukraine
- Facility to enable up to €200 million in new lending to private businesses, including veteran-led enterprises
- Loans will also drive business resilience, with EU support for competitiveness upgrades
The European Bank for Reconstruction and Development (EBRD) is strengthening its support for Ukraine’s businesses and banking sector by providing a new portfolio risk-sharing facility to ProCredit Bank Ukraine (PCBU).
The EBRD’s unfunded facility will partially cover PCBU’s credit risk on new lending, enhancing its capacity to provide much-needed funding to Ukrainian businesses. Backed by the EBRD’s guarantee, PCBU will extend €200 million in new loans to Ukrainian private businesses operating in key sectors such as agriculture, manufacturing, trade, transportation and logistics.
This is the largest portfolio risk-sharing facility that the EBRD has provided to PCBU since the start of Russia’s full-scale invasion of Ukraine, building on the successful utilisation of six previous instruments.
Overall, the EBRD has enabled close to €3.29 billion of finance for Ukrainian borrowers through 40 similar facilities with 12 partner financial institutions since the start of Russia’s full-scale invasion.
The new facility – similar to previous instruments – will enhance the competitiveness of micro, small and medium-sized enterprises (MSMEs) in Ukraine. Twenty per cent of the subloans covered by the EBRD guarantee will be provided to MSMEs for long-term investments in EU-compliant and green technologies, improving the competitiveness of these firms on domestic and foreign markets.
Eligible sub-borrowers will also receive EU-funded technical assistance and investment incentives such as grants on completion of their investment projects under the bloc’s EU4Business initiative. Higher levels of incentive will be provided for businesses and households most affected by the war (such as those experiencing asset destruction, loss or relocation), as well as for sub-borrowers, facilitating the reintegration into the workforce of war veterans, people living with disabilities, internally displaced persons and/or those located in territories most acutely affected by the war.
The EBRD has already allocated €75.4 million of EU grant support to Ukrainian MSMEs under the EU4Business-EBRD Credit Line, of which €5.8 million has been issued to projects through PCBU.
PCBU has also committed to supporting war veterans (both as employees and as clients). It will implement key recommendations set out in the Guidance Note to Support Ukrainian Financial Institutions in Becoming More Inclusive, Safer, and More Accessible Employers, which was developed by the EBRD and the National Bank of Ukraine.
The EBRD facilities will be backed by partial first-loss risk cover from the EU under its Ukraine Investment Framework.
PCBU is a wholly owned subsidiary of ProCredit Holding AG and one of Ukraine’s 20 largest banks in terms of assets. It is one of the market leaders in SME finance in Ukraine and a longstanding partner of the EBRD.
The EBRD is Ukraine’s largest institutional lender and has significantly increased its lending to the country in recent years, making more than €8.5 billion available since the start of Russia’s full-scale invasion. The Bank has also secured agreement from its shareholders for a capital increase of €4 billion in order to continue lending at this level during wartime, and will increase its lending further when the time comes for reconstruction.
