Business news from Ukraine

Ukraine to receive EUR 100 mln loan for eRecovery project

Ukraine will receive a EUR100 million loan from the Council of Europe Development Bank for the eRecovery project, said Oleksandr Kubrakov, Deputy Prime Minister for Reconstruction of Ukraine and Minister of Community Development, Territories and Infrastructure.

“Plus EUR 100 million in compensation for destroyed housing from the Council of Europe Development Bank. The relevant decision was made by the Bank’s Administrative Board, and negotiations are underway to sign a Framework Loan Agreement. This amount will be enough to receive more than 2,000 housing certificates for Ukrainians whose homes were destroyed as a result of Russian military aggression,” he wrote on Facebook.

As reported, the Administrative Board of the Council of Europe Development Bank (EBRD) approved the project “NOME. Compensation for Destroyed Property” at a meeting on March 25-26, under which it provided Ukraine with EUR 100 million.

The eRestoration program was launched in Ukraine on May 10, 2023, and owners of damaged housing began receiving compensation of up to UAH 200,000 for repairs. These funds can be used to purchase building materials, pay for construction work and services of contractors who have the appropriate codes to work and whose vendors have applied for participation in the program through the Diia portal. In December, payments for major repairs of damaged residential property were launched – up to a maximum of UAH 350 thousand for an apartment and UAH 500 thousand for a private house. Starting January 1, 2024, Ukrainians who have repaired their homes at their own expense will be eligible to receive compensation for damaged housing.

On August 1, 2023, Diia started accepting applications for compensation for housing destroyed by the war. Compensation will be paid to individual owners of housing that was destroyed due to hostilities after February 24, 2022, cannot be restored and is located in the unoccupied territory and not in the area of active hostilities.

On December 27, 2023, Diia started issuing housing certificates. Since the launch of the state compensation program, more than 11,000 applications have been submitted, and since January, 1637 Ukrainian families have already purchased new homes for a total of UAH 3.4 billion.

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Ukraine receives $230 mln loan from Japan to restore agriculture

Ukraine’s state budget has received a $230 million loan from the Japanese government under the World Bank’s Emergency Project for Inclusive Support for the Recovery of Agriculture in Ukraine (ARISE), the Finance Ministry said on Friday evening.

“In the conditions of war, agriculture suffers significant losses, which, in turn, jeopardizes food security not only in Ukraine but also around the world. Raising funds under ARISE is an important contribution to providing access to financing for the agricultural business of Ukraine,” Finance Minister Sergii Marchenko said in a release.

It is specified that the funds were raised from the Trust Fund for the Promotion of the Necessary Expansion of Credit for Ukraine (ADVANCE Ukraine).

The Ministry of Finance recalled that the ARISE project aims to support farmers’ access to finance through concessional lending (compensation for costs under the 5-7-9 program) and improve small farms’ access to finance through grants.

The amount of project funding is currently $550 million, of which $500 million will be used to finance the state program “Affordable Loans 5-7-9%” in 2023-2024 with a focus on agricultural enterprises, and almost $50 million is provided for grants for small farmers.

As reported, on March 20, Ukraine received the first tranche of EUR4.5 billion from the EU under the Ukraine Facility program and $1.5 billion from Canada, while before that, all external revenues amounted to only $1.2 billion since the beginning of the year. In addition, on Friday night, the IMF Board of Directors approved the disbursement of the fourth tranche of the EFF Extended Fund Facility program to Ukraine, which should arrive in two to three days.

According to the National Bank, Ukraine may receive external financing worth $10 billion or even more from mid-March to the end of April, against the $37.3 billion required in the state budget for the entire year.

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Ukraine receives CAD2 bln loan from Canada

Ukraine has received a CAD2 billion loan from Canada, Prime Minister Denys Shmyhal said on social media site X on Wednesday evening.

“Ukraine has received CAD2 billion from Canada. Vital funds for our resilience… This is a significant investment in global security and peace,” the head of the Ukrainian government said.

“Canada is a reliable partner of Ukraine that supports us in difficult times. Today we have received USD 1.5 billion from Canada. Since February 2022, budgetary assistance has reached USD $5.1 billion,” wrote Finance Minister Sergii Marchenko.

Shmyhal and Marchenko thanked the people and government of Canada for their support of Ukraine.

The Ministry of Finance clarified that the financial assistance was received under the third supplemental agreement, which is a continuation of the original agreement signed on August 8, 2022. The additional loan is provided for a period of 10 years, with an interest rate of 1.5% per annum. The grace period is 4.5 years from the date of disbursement.

As reported, on Wednesday, the state budget of Ukraine received the first tranche of EUR 4.5 billion from the EU under the Ukraine Facility program, while before that, all external revenues amounted to only $1.2 billion since the beginning of the year.

According to the National Bank’s forecasts, Ukraine may receive external financing worth $10 billion or even more between mid-March and the end of April, against the $37.3 billion required in the state budget for the whole year.

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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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PrivatBank puts up for sale consumer loan portfolio worth UAH 501.4 mln

State-owned PrivatBank (Kyiv) offers professional market participants through the OpenMarket platform (SE SETAM) to purchase at a Dutch auction (with a price reduction) the rights to claim a loan portfolio of more than 80 thousand consumer loans at a starting price of UAH 501.4 million.

“This portfolio includes more than 80 thousand unsecured consumer loans granted to individuals, which were recognized as uncollectible and written off against provisions. The portfolio for sale excludes loans for which the debtors are mobilized servicemen – according to information available to PrivatBank,” the press service of the state bank informs.

It is noted that the rights of claim on such a portfolio include only the loan principal and accrued interest.

The sale will be carried out by gradually reducing the starting price of the lot, while the minimum selling price, according to the published terms, is 2.1% of the initial price – UAH 10.53 million.

According to the state bank, only financial institutions that have a valid license to lend money or provide factoring services and meet the bank’s requirements will be allowed to participate in the auction. Applications for participation can be submitted until February 2, and the auction itself will take place on the 23rd of the same month.

According to the National Bank of Ukraine, as of November 1, 2023, PrivatBank ranked 1st in terms of assets (UAH 804.14 billion) among 63 banks operating in the country, and 2nd in terms of the number of branches (1131).

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