EBRD provides a guarantee to Oshchadbank for new lending worth EUR 200 million

The European Bank for Reconstruction and Development (EBRD) provides the Oshchadbank [State Savings Bank of Ukraine] with a portfolio risk allocation mechanism limit of EUR 50 million, which will make it possible to generate an additional EUR 200 million in new financing for the private sector of Ukraine in wartime conditions.

This follows from a statement by the Ukrainian bank, the Ukrainian News agency reports.

The corresponding document was signed on April 9 in Kyiv as part of the Reintegration of Veterans conference, which was partnered with Oshchadbank.

The EBRD loan will cover up to 50% of Oshchadbank's credit risk for new loans in the amount of EUR 200 million to private enterprises operating in Ukraine.

The total amount of financing provided thanks to similar EBRD guarantees since the beginning of the full-scale war of the russian federation against Ukraine has increased to about EUR 900 million as of the end of 2023.

The United States, through the Special Crisis Response Fund (CRSF), provides first-loss risk coverage to partially mitigate the risk associated with new financing.

Up to 20% of loans with risk sharing will contribute to long-term investments of private micro, small, and medium-sized enterprises (MSMEs) in environmental technologies that meet EU requirements, improving the competitiveness of Ukrainian MSMEs in domestic and foreign markets.

Sub-borrowers will also receive EU-funded technical assistance. Representatives of MSMEs, whose assets were destroyed and/or lost as a result of the war in Ukraine, will have the opportunity to receive additional investment incentives to rebuild their business within the framework of the EBRD-EU Entrepreneurship Revitalization as part of the EU4Business initiative.

Part of this investment will be the EBRD's cooperation with Oshchadbank on the program to support the reintegration of veterans.

It will include the development of veteran-friendly personnel policies, the introduction of inclusive financial services, and the physical adaptation needed by war veterans, people with disabilities, and those who have suffered injuries.

MSMEs that facilitate the reintegration of veterans will receive additional CRSF financial incentives to offset investment costs.

As the Ukrainian News agency earlier reported, since the beginning of the war, the EBRD has allocated EUR 4 billion to Ukraine.

In addition to supporting the private sector, its strategic priorities are to support energy, food security, and vital infrastructure in the country.