The European Bank for Reconstruction and Development (EBRD) has provided $2.5 million to the American Esper Corporation to expand production capacity for bionic upper limb prostheses in Ukraine as part of the Elysium project.
According to the EBRD press release, the total cost of the project is $6.25 million.
The project is co-financed by a European venture capital fund specializing in medical technology and an American venture capital fund specializing in investments in Ukraine and Moldova.
Esper Corporation is a manufacturer of bionic upper limb prostheses with research and production facilities located in Ukraine.
The main owners of Esper are Ukrainian entrepreneurs.
Ukraine’s gross domestic product growth will slow to 3% this year from 5.3% last year, but will accelerate to 6% next year, according to the EBRD’s updated regional economic report released on Wednesday.
“Despite Ukraine’s GDP growth in 2023, supported by a record harvest, damage to electricity infrastructure from recent shelling is one of the factors likely to limit further growth in 2024,” the bank said, also highlighting the risks of damage to port infrastructure.
He noted that the forecast for Ukraine coincides with the overall forecast for 2024 for the regions in which the EBRD operates (Central and Eastern Europe, Central Asia, and the Southern and Eastern Mediterranean).
“Regional growth accelerated this year, up from 2.5% in 2023, despite challenges posed by global geopolitical tensions, including increased trade restrictions. In 2025, the EBRD regions are projected to grow further at 3.6%,” the report says.
The Bank notes that the growth of the Ukrainian economy in 2023 was driven not only by record harvests, but also by increased defense spending, which supported domestic demand, but net exports continued to decline. Among other positive factors, he pointed to the successful restoration of electricity supply after Russian shelling of civilian infrastructure last winter, as well as the resilience and adaptability of Ukrainian business.
As stated in the document, an additional stabilizing factor in 2023 was the timely receipt of external financing, which made it possible to keep inflation at the target level of about 5%. Thanks to these inflows, the country’s official international reserves increased to a record level, but the level of public debt also rose to almost 90% of GDP.
“However, in 2024, new challenges emerged, in particular, due to the prospect of a protracted war of attrition and uncertainty in obtaining external financing, which lasted for several months. Limited domestic demand, labor shortages and insufficient investment are also factors that negatively affect the growth rate,” the EBRD stated.
At the same time, it points out that a significant positive factor was the opening of a new coastal Black Sea export corridor. This has partially reduced uncertainty about the security of using the Black Sea for exports of not only grain, but also metals and mining products, which have suffered the most over the past two years.
The report also highlights a sharp increase in foreign direct investment (FDI) from Ukraine to emerging Europe in 2022 from low levels before, driven by the arrival of skilled workers from Ukraine to neighboring countries, with software and IT services driving FDI.
In general, the EBRD report, subtitled “Taming Inflation,” says that inflationary pressures in the bank’s regions of operation have eased compared to last year, which saw an economic downturn due to higher energy prices as a result of the war in Ukraine and the post-war recovery.
The report describes how geopolitical tensions are affecting the EBRD’s countries of operation, leading to rapid trade fragmentation and increased defense spending, and thus a reduction in the so-called “peace dividend” – the economic benefits of reduced defense spending and reinvestment of the resulting savings in the civilian economy. Although growth is projected to continue in the bank’s regions, the updated forecast is 0.2 percentage points (p.p.) lower than last year’s September forecast.
Due to lower energy and food prices after a sharp rise in 2022, inflation in the EBRD regions fell to an average of 6.3% in March 2024 from a peak of 17.5% in October 2022. Although this fall was faster than expected a year ago, inflation is still 2 percentage points above pre-crisis levels. This is in line with trends in developed economies, where inflation has also declined but still exceeds central bank targets. The forecast also emphasizes the slower pace of inflation decline in EBRD countries with higher budget deficits and weaker macroeconomic frameworks.
In the report, the bank improved its estimate of Russia’s GDP growth in 2024 from 1% to 2.5%, but expects it to slow to 1.5% next year.
For Poland, the forecast for this year has been improved by 0.2 percentage points to 2.9% with an acceleration to 3.5% next year, while for Turkey it has been lowered by 0.3 percentage points this year to 2.7% with an acceleration to 3% next year.
The European Bank for Reconstruction and Development (EBRD) has appointed Arvid Türkner, who has held a similar position in Turkey since November 2017, as its new Managing Director for Ukraine and Moldova from May 1, 2024, the bank said in a press release on Wednesday.
“Ukraine is a priority area for EBRD investments, with EUR4.1 billion sent there during the wartime period. Türkner will replace Matteo Patrone, who after five years of work (in Ukraine) will hold the position of EBRD vice president for the banking sector,” the release stated.
The EBRD notes that future wartime and reconstruction investments in Ukraine will be underpinned by the EUR4bn paid-up capital increase approved by shareholders late last year.
“Arvid Türkner’s outstanding performance in his previous role in Turkey gives us great confidence that this vital portfolio is in safe hands,” the statement quotes EBRD First Vice President Jürgen Rigterink as saying.
It is indicated that Türkner will oversee the development of the EBRD’s program for Ukraine, focusing on five wartime investment themes: support for energy security, vital infrastructure, food security, trade and the private sector, as well as political dialogue to help Ukraine and Moldova move towards EU membership.
It is reported that Türkner, a German national, joined the EBRD in January 2009 from the German development bank DEG as a senior banker in the financial institutions group in Moscow. In October 2013, he was promoted to regional development director and deputy head of the Moscow office, and became head of the office in April 2015.
After moving to London in early 2017 as director of corporate debt, Turkner was appointed to his current role as managing director in Turkey in November 2017, where he successfully led the bank’s crisis response to the devaluation of the lira in 2018. Under his leadership and despite recurring macroeconomic volatility, the bank’s business in Turkey has continued to grow significantly: the portfolio is currently valued at EUR7.5bn, with 246 active projects and EUR5.8bn of operating assets. In 2023 alone, the bank signed 48 projects worth EUR2.48bn.
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.
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.
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.
