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.
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.
Andriy Pyshnyy, EBRD, European Bank for Reconstruction and Development, NATIONAL BANK OF UKRAINE, NBU, WORLD BANK
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.
The European Bank for Reconstruction and Development (EBRD) is providing Bank Lviv with a financing package consisting of a EUR7.5m guarantee to cover the risks of new lending of up to EUR30m and a hryvnia loan equivalent of up to EUR15m of private micro, small and medium enterprises (MSME) financing.
“The loan is divided into two tranches – EUR10m committed and EUR5m non-dedicated, each maturing in three years – will help Bank Lviv maintain a sustainable and diversified funding base to ensure continued access to medium-term financing for businesses,” the bank said in a statement on Thursday.
It is indicated that the cost of financing the loan will be reduced by subsidizing the interest rate in local currency within the framework of the European Union’s EU4Business initiative in Ukraine.
According to the release, an unsecured risk-sharing instrument worth EUR7.5m will also be provided in two equal tranches, each of which will cover 50% of the credit risk of new loans of Bank Lviv totaling up to EUR30m, but not more than 50% of the portfolio. The facility will help Bank Lviv provide access to finance for Ukrainian companies operating in critical sectors such as primary agriculture and agricultural services, food processing, transportation and logistics, retail and pharmaceuticals, the EBRD said.
It added that up to a further EUR4.5m of this total portfolio of EUR30m will support long-term investments by private MSMEs in EU-compliant clean technologies. Eligible sub-borrowers will also receive EU-funded technical assistance and investment incentives upon completion of their investment projects.
The EBRD recalls that the project is made possible by a 50% first loss risk coverage by donors.
As reported, the relevant project was approved by the board of directors of the international bank on July 18, and the necessary documents were signed on Thursday.
The EBRD recalls that Bank Lviv, owned by European shareholders, is a regional SME-oriented bank and one of the fastest growing in western Ukraine: its loan portfolio grew from $35 million in 2017 to $133 million in the first quarter of 2023. Its head office is located in Lviv, and its network includes 19 branches, 13 of them in Lviv region and six in other cities.
According to the National Bank of Ukraine, as of the beginning of June 2023, Bank Lviv ranked 27th (UAH 8.25 bln) among 65 banks operating in the country in terms of assets.
According to the information on the website of Bank Lviv, its shareholders at the beginning of this year were: ResponsAbility Participations (Switzerland) – 48.557189%, Nordic Environment Finance Corporation (NEFCO) – 13.93623% and Icelandic citizen Margeir Peturson – 37.4692%.
The European Bank for Reconstruction and Development (EBRD), with partial support from the European Union, is providing Ukraine’s Kredobank with a EUR25m guarantee to cover the risks of new lending, as well as a EUR25m Trade Facilitation Program (TFP) loan for trade finance to Ukrainian clients.
“The new risk-sharing agreement will allow Credobank to reduce the funding gap, and continued access to financing will help companies to remove bottlenecks in trade in food and agricultural products,” – quoted in the message on Wednesday the words of the EBRD Managing Director in the sector of financial institutions Francis Malizh.
It is noted that the new financing will be available to companies operating in such critical sectors as primary agriculture and agricultural services, food processing, transportation and logistics, retail and pharmaceuticals.
Under the risk-sharing agreement, which the two institutions with prior cooperation experience signed on Wednesday in London, the EBRD is providing a EUR25m unfunded risk-sharing instrument that covers 50% of the credit risk on Kredobank’s new financing totaling EUR100m, but not more than 50% of the portfolio. The EBRD guarantee is provided in two equal tranches.
In addition, EUR15m of the total EUR100m portfolio covered by the guarantee will be available to finance long-term investments by micro, small and medium-sized enterprises (MSMEs) in technologies and equipment meeting EU standards, including investments in sustainable and green technologies under the EU Eastern Partnership SME Competitiveness Program (EaP SMEC), the EBRD said.
He added that participation in the EaP SMEC program will also allow Kredobank and its clients to receive expert assistance in the form of training and advisory support. Eligible borrowers will also receive grant support in the form of investment incentives upon completion of their investment projects.
The EBRD guarantee is backed by a 50% first-loss coverage guarantee financed by donors as part of the sustainability package. The conclusion of this new agreement increases to EUR468 million the total amount of funding supported by such guarantees since the beginning of the war.
As for the EUR25mn under the Trade Facilitation Program, the lender notes that participation in this program will allow Kredobank to increase its support to Ukrainian exporters and importers.
Kredobank is one of the leading banks in western Ukraine and as of the beginning of June it ranks 14th (UAH 46.85 bln) out of 65 operating banks in Ukraine in terms of assets. Kredobank is fully owned by PKO Bank Polski SA, the largest systemically important bank in Poland, whose shares are listed on the Warsaw Stock Exchange.
Educational platform Prometheus and the European Bank for Reconstruction and Development (EBRD) open the program “Bootcamp economic recovery” with 60 thousand grant places for training of Ukrainian entrepreneurs, the co-founder of Prometheus Ivan Primachenko in Facebook reported.
According to the message, Ukrainian entrepreneurs will be taught by Harvard, the University of Virginia’s Darden Business School and Rice University, as well as the co-founders of Novaya Poshta, Preply, Eugene Klopotenko and other leading entrepreneurs in Ukraine.
The program includes four courses: “How to Start Your Own Business in Times of Uncertainty: A Step-by-Step Guide from Ukraine’s Top Entrepreneurs”; “CS50: Fundamentals of Programming for Business Professionals” from Harvard University; “Grow to Greatness: Smart Growth for Private Business” from the Darden Business School at Virginia Tech; and “Finance for Non-Financial People” from Rice University.
“I haven’t yet seen top American universities open their business courses for free, and in a different language. This is a unique chance that should be taken here and now,” Primachenko wrote.
Registration for the Economic Recovery Bootcamp program is open from today at https://prometheus ua/prometheus-plus/bootcamp).
