The European Bank for Reconstruction and Development (EBRD) plans to provide EUR140 million in guarantee financing to state-owned PrivatBank (Kyiv), which will cover up to 50% of the credit risk on new loans of EUR400 million in equivalent.
According to information on the bank’s website on Thursday, its board of directors intends to consider this project on July 24, 2024.
It is specified that the guarantee funding will be provided to PrivatBank in two equal tranches, each of which will provide partial coverage of risks under new loans worth EUR 200 million, while only one tranche has been agreed upon so far.
The project also provides for a sub-limit of up to EUR 60 million to finance long-term investments by micro, small and medium-sized enterprises (MSMEs) to modernize technologies and equipment in accordance with EU standards, including investments in sustainable and green technologies (70% of the sub-limit), thereby increasing the competitiveness of enterprises.
It is noted that eligible sub-borrowers will also receive EU-funded technical assistance and grant support in the form of investment incentives after the completion of investment projects.
According to the EBRD website, the financing is intended primarily to support Ukrainian companies in primary and secondary agriculture, as well as other critical sectors necessary to ensure the country’s energy security.
“At the same time, priority will be given to MSMEs and corporate borrowers investing in projects that increase energy security and efficiency in Ukraine,” the release says.
As reported, EBRD Vice President Matteo Patrone and PrivatBank CEO Gerhard Bösch signed a letter of intent to start working on a risk-sharing agreement during the Ukraine Recovery Conference in Berlin on June 11-12.
According to the National Bank of Ukraine, as of May 1, 2024, PrivatBank ranked 1st in terms of assets (UAH 857.00 billion) among 63 banks operating in the country. The financial institution’s net profit last year amounted to UAH 37.8 billion. The EBRD notes that the state-owned bank’s network currently includes 1,200 branches across the country, 6,800 ATMs and 1,040 terminals.
