The European Bank for Reconstruction and Development (EBRD) may grant Ukrzaliznytsia (UZ) a EUR200mn emergency support loan under sovereign guarantees.
As stated in a statement on the bank’s website on Tuesday, the bank’s board of directors plans to consider the project at a meeting on May 10, 2023.
According to the information, the loan consists of EUR100 mln of emergency financing of UZ capital investments and EUR100 mln of capital structure support.
It is expected that 50% of the loan will be secured by guarantees of G7/EU donors involved in the conditions when local commercial structures cannot guarantee risk covering mechanisms.
It is noted that with the help of the loan, UZ will be able to increase cross-border capacity with the EU by removing bottlenecks in border crossing, as well as to repair the relevant sections of the railroad bed that were damaged due to the full-scale invasion of Russia. With the funding, UZ will not only be able to renew key rail corridors at the border with the EU, but also to purchase rolling stock to provide comprehensive solutions for expanding the capacity of rail corridors with the EU.
“The project will support the company in the current critical issues that need to be addressed to improve operations and connectivity with the EU, continuing to provide a vital service to people and businesses in need of reliable logistics for key Ukrainian exports (including agricultural products) and critical imports,” the project description on the EBRD website said.
Earlier, Fitch Ratings reported that amid negative operating cash flow expectations for UZ in 2023, the company needs financing which could amount to EUR400m, including EUR199m from existing credit lines with the EBRD and EIB and $200m in the pipeline.
At the end of 2022, UZ’s outstanding debt amounted to 39.5 billion UAH, compared to 33.5 billion UAH in 2021, of which Eurobonds accounted for 82.8% and debt in foreign currency – 94.3%.
At the end of January, UZ signed an agreement with the holders of two issues of Eurobonds worth $895 mln on the deferral of coupon payments and repayment for 24 months. Under the agreements, the new maturity date for the $ 594.9mn 8.25% Eurobond is July 9, 2026, and for the $300mn 7.87% Eurobond – July 15, 2028.
As a result of the bond restructuring, the company received a deferral between 2023 and 2025: only 4% of the total debt is due during that period. The main payments are now due in 2026 – 58% of the current total debt (mostly $595mn Eurobonds) and after 2027 – 32% (mostly $300mn Eurobonds in 2028).
Kyiv-based industrial and construction group (ICG) Kovalska raised EUR32 mln credit from Invest International (the Netherlands) to build two factories in Lviv region, according to group general director Serhiy Pylypenko.
Kovalska started construction of two new factories (for dry mixes under Siltek trademark and for concrete production) in Lviv region at the beginning of 2022, with total investments supposed to exceed EUR60 mln just for the first stage. According to Pilipenko, as of February 2022, more than EUR15 million had already been invested for the purchase of equipment and building structures, but with the outbreak of war, the project was frozen.
“Finding funding under war conditions was a “starry-eyed” task. During shelling and air raids, we continued to negotiate with international financial institutions, but in response we heard only words of support and compassion. No one was prepared to give real money. But we got the result we needed. Invest International (the Netherlands) decided to grant EUR 32mln project financing to Kovalska”, Mr. Pilipenko said on Facebook.
According to him, the construction of the plants will start “closer to summer”.
PSG Kovalska has been working on the construction market of Ukraine since 1956. It combines more than 20 enterprises in the sphere of extraction of raw materials, production and construction. The production is presented by brands “Concrete from Kowalska”, “Avenue”, Siltek and others. The enterprises of Kowalska operate in Kyiv, Zhytomyr, Lviv, Kherson and Chernihiv regions.
In addition, the group includes Kovalska Real Estate, which is engaged in construction of residential buildings in Kiev. In its portfolio – more than 20 completed residential projects.
Ukraine on Tuesday received from the Netherlands EUR200 million of credit funds on concessional terms through an IMF-administered account, the Ministry of Finance said.
According to its release, the loan amount bears interest at an annual interest rate equal to the IMF prime rate of interest (IMF basic rate of charge, fixed at 3.641% per annum).
The final repayment of the loan is carried out 10 years from the date of the sample of the loan, taking into account the grace period of 4.5 years from the date of the sample of the loan, the Ministry of Finance said.
The loan funds are designed to finance the cost of the general fund of the state budget, the ministry said.
As reported, in early July this year, the Netherlands announced a decision to allocate another EUR200 million to Ukraine through the IMF account. “The funds will be spent on the current needs of the Ukrainian authorities, such as salaries of civil servants, teachers, medics,” said Minister of Foreign Trade and Development Cooperation of the Netherlands Lisie Schreinemacher at the International Conference on the Recovery of Ukraine in Lugano, Switzerland.
European Bank for Reconstruction and Development (EBRD) will provide ArcelorMittal Kryvyi Rih PJSC (AMKR, Dnipropetrovsk oblast) with a $100mn loan to replenish its working capital.
“The loan will be used to finance the company’s working capital needs to ensure business continuity in Ukraine,” the bank said in a statement Thursday.
According to it, the bank’s board of directors approved the project at a meeting on Dec. 14.
The EBRD recalled that it provided financing to AMKR in 2017, developed a comprehensive Environmental and Social Action Plan (ESAP) and monitored its implementation by PESM, making monitoring visits to the company in recent years.
“Overall, the company was on track for implementation and reported as required. The provision of working capital under the concept of sustainability of Ukraine will allow, among other things, to continue investment plans and implement the existing ESAP, which, in turn, will significantly improve the environment, health and safety at the site,” – pointed out the bank.
The EBRD clarified that a key aspect of the current investment program is the modernization of the sinter plant, and this investment process is ongoing, with work on the sinter lines as well as the air treatment facilities, but some investments planned for 2022-2023 have been postponed due to the ongoing war and the proximity of the front.
“ArcelorMittal Krivoy Rog is the largest producer of rolled steel in Ukraine. It specializes in the production of long products, particularly rebar and wire rod, and is owned by ArcelorMittal.
On November 24 this year, after the blackout caused by Russian missile attacks on the energy infrastructure, AMKR reported about critical limitation of electricity consumption and suspension of most of the production processes. According to the company, the available amount of electricity is not enough to maintain production even at 20% of capacity.
In addition, on the night of December 5, AMKR was hit by a Russian missile strike.
The European Bank for Reconstruction and Development (EBRD) may lend state-owned Ukreximbank up to EUR50 million to finance private corporate clients and municipalities in Ukraine affected by the war.
“The loan will provide Ukreximbank with much-needed medium-term financing during wartime and will allow the bank to support its private corporate clients and municipalities using its strategic focus, proven experience in corporate lending to critical sectors and strong regional presence,” the bank said in a statement Wednesday.
According to it, the project will be supported by donors: EUR25 million of first-loss risk coverage will be provided by the EBRD’s Special Crisis Response Fund as part of the EBRD’s special Ukraine War Response Package.
Ukreximbank was founded in 1992. The sole owner of the financial institution is the state.
According to the National Bank of Ukraine, as of July 1, 2022 Ukreximbank in terms of total assets ranked third (228.608 billion UAH) among 68 operating banks in the country, or about 10% of total assets of the banking system.
The bank has 51 branches across the country and two representative offices in London and New York.
The Cabinet of Ministers has approved a $500 million loan from the International Bank for Reconstruction and Development (IBRD).
Taras Melnychuk, representative of the Cabinet in the Verkhovna Rada, said in Telegram on Friday that the relevant decision was made at the government meeting on Friday.
In particular, it was deemed appropriate to attract a loan from the International Bank for Reconstruction and Development as the fourth additional funding for the project “Support for Public Expenditure to Ensure Sustainable Public Administration in Ukraine” in the amount of $500 million.
