The European Bank for Reconstruction and Development (EBRD) plans in 2019 to increase the volume of investment in the Ukrainian economy to $1 billion, head of the Ukrainian office of the EBRD Marina Petrov has stated.
“The $500 million that we invested last year was not bad at all. This year we sincerely hope to increase it twice [investment in Ukraine],” she said at a meeting at the European Business Association (EBA), dedicated to the expectations of businesses from the presidential election.
However, she noted the importance of consistency and predictability of the future economic policy.
“We hope that there will be no reversal,” she said.
“The ongoing changes [political] carry both risks and opportunities. We hope very much for a balanced economic policy that will allow accelerating the growth that has already begun in the Ukrainian economy,” she told Interfax-Ukraine.
The banker stressed the need to continue cooperation with the IMF.
“We hope that, first of all, the work on the IMF program will continue. We already see investors ready to come to the economy [in Ukraine]. The most important thing is not to frighten investors, not to make unexpected economic decisions,” the expert said.
The Kyiv City Council at a meeting on Thursday approved the attraction of a loan of EUR 110 million from the European Bank for Reconstruction and Development (EBRD) to buy rolling stock under the Kyiv City Public Transport Project II.
According to the decision, municipal enterprise Kyiv Metropoliten will receive a loan of EUR 50 million at 6% per annum and the period of up to 12 years, including the two year grace period for paying the principal of the loan. Municipal enterprise Kyivpastrans will receive EUR 60 million for the period of up to 13 years at 6% per annum, including the three year grace period.
As reported, Kyiv city after Lviv has become the second city in Ukraine and 21st in the region, which joined the Green Cities Project of the EBRD.
According to a press release of the Kyiv City Administration issued the signing of the memo, the city plans to use this programme to implement projects for the renewal of the Kyivpastrans and Kyiv Metropoliten’s fleet with new buses, trolleybuses and subway cars, as well as a comprehensive reconstruction of the tram line and the Kontraktova Ploscha stop and overhaul of the Metro Bridge.
Recently, the EBRD Credit Committee approved the concept of projects for an estimated total cost of EUR 320 million, Kyiv Mayor Vitali Klitschko then said.
Under the Green Cities programme the EBRD provides support to partner cities in designing and implementing Green City Action Plans and assistance in selecting investment programmes and providing financing by international donors. In particular, the Green City Action Plans include measures to improve urban infrastructure, quality of air, cleanness and availability of land and water resources, green space areas.
The pilot programmes were implemented in Georgia, Armenia and Moldova. The programme was then approved by the EBRD board in autumn 2016. Lviv city was the first Ukrainian city participated in the programme. The city managed to raise EUR 20 million for Zelene Misto municipal enterprise for building a waste treatment facility and the rehabilitation of the Hrybovychi solid household waste landfill.
In autumn 2018, the EBRD approved the extension of the Green Cities programme (Green Cities 2) with the provision of up to EUR 700 million. Currently the programme has over EUR 1 billion of confirmed financing, including over EUR 250 million that has been invested.
The European Bank for Reconstruction and Development (EBRD) could provide EUR 149 million to national energy company Ukrenergo for the project to modernize power transmission networks, the bank has said on its website.
The project has passed final review, pending board approval.
The loan will finance procurement of up to 26 new transformers and the automation and upgrade of 12 high voltage substations in key locations of the transmission network of Ukraine. The total project cost is EUR 198.2 million, including EUR 49.2 million of own funds of Ukrenergo.
The project will enable Ukrenergo to upgrade its key transmission infrastructure, required for synchronization with the European Network of Transmission System Operators for Electricity (ENTSO-E).
In addition, the modernization will result in substantial energy savings and associated CO2 emission reduction.
The European Bank for Reconstruction and Development (EBRD) and the European Union (EU) are opening the EU4Business-EBRD credit line with the limit of EUR 60 million to finance projects of small- and medium-sized enterprises (SME) in Ukraine, EBRD Managing Director, Eastern Europe and Caucasus Matteo Patrone said at a presentation of the project in Kyiv on Friday.
He said the credit line with a limit of around EUR 60 million is intended for SME for using opportunities opened in relation with the Deep and Comprehensive Free Trade Area (DCFTA) Agreement signed by the EU and Ukraine.
Patrone said that borrowers using this credit line will be able to receive long-term loans in the amount of up to EUR 3 million. The loans will be issued in hryvnias.
The credit line is integration from the point of geography and economy, he said. After the establishment of the DCFTA between the EU and Ukraine, local companies obtained many opportunities. The launch of the EU4Business-EBRD credit line allows local SME, which provide almost 80% of jobs in Ukraine, but generate only around 40% of GDP, to have an additional access to financing to develop, become more competitive and meet EU standards, Patrone said.
For projects within the EU4Business-EBRD credit line that will meet certain requirements, incentive grants are also provided to cover up to 15% of the cost of projects.
Patrone said that the funds under this credit line will be provided through state-owned Ukreximbank, which received the equivalent of EUR 22 million for this program, and OTP Leasing, which received EUR 10 million in equivalent. Additional credit resources of around EUR 28 million will be available for other local financial institutions to join this program.
Head of the EU Delegation to Ukraine Hugues Mingarelli said during the presentation of the project that similar credit lines are opened to Georgia and Moldova.
The EU is trying to ensure that these credit lines benefit Ukrainian SME, as well as promote economic growth in Ukraine and strengthen economic relations between the country and the EU. In 2018, exports of Ukrainian goods to the EU grew by 15%, while imports of goods from EU by 11.5%, he said. The EU believes that the DCFTA credit lines contribute to the preservation of these positive trends, Mingarelli said.
CREDIT LINE, EBRD, EU, FINANCE, SME
The European Bank for Reconstruction and Development (EBRD) under the Ukraine Public Transport Framework project to improve public transport infrastructure signed four loan agreements worth EUR 38 million in total with trolleybus utilities of Mariupol, Kryvy Rih, Kharkiv, and Zhytomyr in January-November 2018 against municipal guarantees.
In particular, it signed a EUR 13 million agreement with municipally owned Mariupol Tram and Trolleybus Administration in July, while agreements worth at EUR 8 million each was signed in September with municipally owned Urban Trolleybus (Kryvy Rih) and municipally owned Trolleybus Depot No. 2 (Kharkiv). Late in November, the EBRD signed an agreement with municipally owned Zhytomyr Tram and Trolleybus Administration to the tune of EUR 9 million.
Under the project, the loans are additionally backed by EBRD loans from the Clean Technology Fund (CTF) and grants from the Eastern Europe Energy Efficiency and Environment Partnership (E5P).
According to the Antimonopoly Committee of Ukraine, in the case of Kryvy Rih, the city provided a guarantee for EUR 10 million, as the bank gives its municipal enterprise an additional EUR 2 million loan from the Clean Technology Fund. CTF loans for Mariupol and Kharkiv also accounted to EUR 2 million.
The loans are issued for 12 years with repayment in equal parts every six months after a two-year grace period.
Kryvy Rih’s interest rate on principal debt is set at 5.75% and is pegged to the rate of 6-month Euribor rate with the possibility of lowering. It depends on the city’s rating and the borrower’s compliance with the required financial ratios. At the same time, the rate for a CTF loan is only 0.75%.
The European Bank for Reconstruction and Development (EBRD) has issued a loan of EUR 2.6 million to Negabarit-Service LLC (Volyn region), one of the leaders of the domestic market for oversized and complex cargo carriage by road, to finance an investment program providing the procurement of up to 42 GPS-equipped tractor trucks and 18 trailers. According to a correspondent of Interfax-Ukraine, the loan agreement was signed in Kyiv on December 20.
The loan will be accompanied by a grant of up to EUR 100,000 under the EU4Business program and a stimulating grant of $452,000 under the EBRD’s FINTECC program launched by the bank in Ukraine in February 2016 to support the introduction of new technologies for climate change mitigation and adaptation to them.
It is assumed that the new trucks will reduce the operating costs of Negabarit-Service by at least 30% due to the reduction of fuel consumption and the cost of maintenance. They will meet environmental standards of at least Euro-6, which will help reduce emissions of nitrogen oxide by 80% and carbon oxide by 22%.
