Business news from Ukraine

EBRD provides €2.5 mln loan to Kyiv Medical University

The EBRD is lending €2.5 million to Kyiv Medical University (KMU), a private educational institution that provides higher medical, dental and pharmaceutical education to 3,400 students in Ukraine and Poland. The loan will be used to prepare a new campus, which was needed due to the partial relocation of CMU students to Poland after the Russian invasion in 2022.

The project envisages launching new courses and increasing the number of students by 35%. The campus in Poland should also increase CMU’s revenue by 38% this academic year and create more than 200 jobs for doctors and teachers. With the number of foreign students and revenues of medical schools in Ukraine sharply reduced due to the Russian invasion, this will help the CMU ensure reliable provision of educational services until the end of the war.

Supporting the private sector and lending to small and medium-sized businesses is a strategic priority for the EBRD as the largest institutional investor in Ukraine. The history of cooperation with the EBRD began for the CMU in 2018, when the Bank provided a €1.3 million loan to the university to purchase a campus in Kyiv. This loan was fully repaid in April 2023.

Now, CMU, which has acquired two buildings in Katowice and Chorzów for its Ukrainian and international students, plans to repeat the project of launching a new campus, but in another country. To do this, it will be necessary to renovate the acquired buildings and purchase new equipment.

The total cost of the project is €4.1 million, which means that the CMU will cover part of the costs from its own funds.

After the opening of the new campus in Poland, CMU will be able to accommodate more than 2000 Ukrainian and international students, as well as launch new study programs, including physical rehabilitation, clinical psychology, and nursing.

The expansion is a testament to the resilience of Ukrainian business. The opening of the new campus will allow the CMU not only to ensure the safety of students and teachers, but also to maintain the proper quality of educational services, which will help improve health care in Ukraine and abroad in the future.

Since the beginning of the war, the EBRD has lent €4 billion to Ukraine. In addition to supporting the private sector, the Bank’s strategic priorities in the country are to support energy security, critical infrastructure, food security and trade.

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EBRD to cover up to 50% of risk on new loans to Ukrgasbank

The European Bank for Reconstruction and Development (EBRD) intends to assume up to 50% of the risk on newly issued loans to state-owned Ukrgasbank (Kyiv) totaling the equivalent of EUR50 million.

According to the EBRD on Monday, its board of directors planned to consider this project at a meeting on February 9, but has not yet made a final decision.

It is noted that the guarantee financing is planned to be provided in two equal tranches, with the second tranche not yet agreed, and the total amount of EBRD financing is EUR 12.5 million.

The project also includes a sub-limit of up to EUR 10 million, or 20% of the covered portfolio, to finance long-term investments by micro, small and medium-sized enterprises (MSMEs) to modernize their technologies and equipment in line with EU standards, including investments in green technologies (70% of the sub-limit), and to increase their competitiveness.

According to the EBRD, the facility will be mainly 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 December 1, 2023, Ukrgasbank ranked 5th in terms of assets (UAH 180.85 billion) among 63 banks operating in the country.

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EBRD doubles financing for projects in Azerbaijan in 2023

BAKU. Feb 9 (Interfax-Ukraine) – The European Bank for Reconstruction and Development (EBRD) provided loans totaling 156 million euros in 2023 for implementing two projects in Azerbaijan, the EBRD told Interfax.

The EBRD allocated loans totaling 86 million euros in 2022 to finance nine projects in Azerbaijan, meaning that the bank boosted the volume of financing 1.8-fold in 2023.

The EBRD allocated 310 million euros overall to finance 30 projects in the public and private sectors of Azerbaijan in 2019-2023.

As previously reported, the EBRD plans to allocate $750 million in 2023-2025 in order to implement projects in Azerbaijan.

Azerbaijan has been a member of the EBRD since 1992, during which time the EBRD has allocated 3.62 billion euros to finance 189 projects in the country. The bank’s current portfolio in the country totaled 897 million euros for 31 projects at the beginning of 2024, with 90% in infrastructure, 7% in industry and agriculture, and 3% in the financial sector.


EBRD plans to finance Ukraine in amount of EUR 1.5 bln annually

The European Bank for Reconstruction and Development (EBRD) provided record financial assistance of EUR 2.1 billion in 2023, while in the coming years it plans to finance Ukraine in the amount of EUR 1.5 billion annually, according to a press release.

“Investments in Ukraine during the war are planned to continue at around €1.5 billion per year, while the capital increase makes it possible to double this amount when the time comes for recovery,” the EBRD said in a statement.

Last year, the EBRD’s executives decided to increase the Bank’s paid-in capital by EUR 4 billion to EUR 34 billion to provide further support to Ukraine.

The bank reminded that Ukraine was provided with EUR 2.1 billion last year and EUR 1.7 billion in 2022, which allowed the EBRD to fulfill its goal of investing up to EUR 3 billion in Ukraine in 2022-2023 in October last year.

It is noted that donor funding to support the real sector of the country’s economy during this period amounted to EUR1.6 billion. It is specified that more than EUR409 million of this amount was allocated in 2023 alone.

“Almost half of the donor resources were provided by the European Union. Significant contributions were also made by individual donors, including Canada, Norway, Spain, and the Netherlands,” the release reads.

Moreover, last year, the EBRD allocated EUR 1 billion in the private sector, including EUR 600 million in loans through partner financial institutions in Ukraine and EUR 400 million under its Trade Facilitation Program.

The EBRD currently identifies five priority areas for investment in Ukraine: energy security, critical infrastructure, food security, trade and private sector support.

In addition to financing, the bank continues to support reforms in Ukraine, the implementation of which will facilitate further private sector investment and Ukraine’s further progress towards EU membership. The EBRD reportedly continued to work with the government and other state agencies on issues related to European integration and fulfillment of EU requirements during the above-mentioned time.

The Bank is also assisting Ukraine in preparing for the effective use of the large amounts of funding that will be needed during the recovery phase, and the EBRD, together with the European Investment Bank (EIB) and the World Bank, is helping ministries and agencies to develop institutional capacity, as well as providing technical assistance to the State Agency for the Reconstruction and Development of Infrastructure of Ukraine to establish an effective project office.

National Bank develops new mechanism of war risks insurance

The National Bank of Ukraine (NBU) together with international partners, in particular the World Bank and the European Bank for Reconstruction and Development (EBRD), are preparing a new mechanism for settling military risks, which they plan to present no later than the first quarter of 2024.

As noted on the NBU Facebook page, during the meeting of the regulator’s management with participants of the insurance market, the head of the National Bank Andriy Pyshnyy emphasized the importance of the introduction of insurance of political-military risks, which should be fully operational next year.

It was also noted that one of the priorities of the National Bank in 2024 is the development of a competitive, adaptive and cost-effective insurance market.

“New requirements for insurance companies bring us closer to European standards of regulation and supervision. Therefore, the implementation of new norms is a priority, and integration into the European community is task No. 1. We will have to move as fast as possible, but you can count on comprehensive support and mature constructive dialog,” Pyshny said, speaking about the importance of such changes for domestic insurance.

It was noted that in 2024, in particular, will begin the application of risk-oriented prudential supervision and improvement of requirements for the solvency of insurers, as well as a new type of supervision of market behavior of insurers to control compliance with the rules and standards of financial services.

“The National Bank is strengthening its staff with specialists who will evaluate insurers’ business models using a risk-based approach. Special attention will be paid to the assessment of insurers’ assets – property and securities, the value of which should be market-based,” Deputy Head of the NBU Dmytro Oleinik said during the meeting.

Separately, emphasis was placed on the importance of the work of financial monitoring units of insurers as a safeguard to attract companies to money laundering schemes, in particular for the purpose of tax evasion, and to limit ties with Russia.

At the same time, it was noted that the work continues in the Parliament to finalize the text of the new law “On compulsory insurance of civil liability of owners of land vehicles,” which should be adopted under the IMF program by the end of May next year.

Now insurance companies will have to prepare for the renewed field inspections by the National Bank in order to eliminate possible violations of the law in advance, emphasized representatives of the regulator.

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Ukrposhta announces tender for purchase of 250 vans on EBRD portal

Ukrposhta JSC, as part of a joint project with the European Bank for Reconstruction and Development (EBRD), has announced a tender on the EBRD portal for the purchase of 250 vehicles (vans with a carrying capacity of at least 1750 kg) with related full service services under the Ukrposhta logistics development project for implementation in 2024.

According to a report on the Prozorro portal, bids are accepted until January 15, 2024.

“The project will make it possible to make important investments in Ukrposhta’s logistics infrastructure and vehicle fleet to improve the quality of services and the sustainability of the company’s business and network. It will support the transformation of the company’s operating model, as well as improve the quality of services and the sustainability of Ukrposhta’s business and network,” the statement said.

The project is funded by a loan/grant provided by the EBRD.

The report notes that an explanatory online meeting with interested suppliers is planned for mid-December-2023, where they will be able to ask questions about the tender documents.

As reported, in October 2020, the Ukrainian government approved a EUR 63 million loan from the EBRD for the implementation of Ukrposhta’s Logistics Network and Rural Branch projects.

In March 2021, as part of the project, the EBRD signed an agreement with VIDI for the purchase of 1,860 Citroën Berlingo L2 Worker vehicles for mobile offices worth a total of UAH 1.3 billion.

As of September 30, Ukrposhta had 27.36 thousand points of presence with 35 thousand employees. Net income in January-September 2023 amounted to UAH 8.36 billion.

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