KYIV. May 21 (Interfax-Ukraine) – The European Commission at the Eastern Partnership in Riga has launched a new 10-year grant facility worth EUR 200 million to support small and medium enterprises (SMEs) in Ukraine, Georgia and Moldova as part of the agreements on Deep and Comprehensive Free Trade Areas (DCFTA).
According to a European Commission press release issued on May 21, this contribution is expected to unlock at least EUR 2 billion of new investments by SMEs in the three countries, which are to be financed largely by new loans supported by the facility. The financial means for the investments will largely come from the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB).
“The European Commission promised concrete steps to boost trade and the exchange between the Union and our Eastern partners… They are a sign of the EU’s strong commitment to further deepen our cooperation with our Eastern partners,” President of the European Commission Jean-Claude Juncker said.
According to the documents, this includes projects common for all three countries and one more project for each country. For Ukraine this year, a guarantee facility worth EUR 330 million is to be launched, which includes an EU grant of EUR 40 million.
The EBRD facility to support SMEs worth EUR 8 million will be launched for Georgia (UAH 6 million of the EU grant) and for Moldova the EIB facility worth EUR 300 million to support fruit gardening will be launched (EUR 8 million of the EU grant).
The common projects for the three countries include a EBRD facility worth EUR 69 million on technical assistance to SMEs (EU grant is EUR 10 million to guarantee EBRD direct lending).
This year it is planned to launch two smaller projects: EBRD worth EUR 6 million (EU grant is EUR 4 million) – business advice on exports and new standards compliance; and EBRD, EIB and KfW worth EUR 90 million (EU grant is EUR 15 million) – for currency hedging.
It is also planned to launch two larger facilities: DCFTA Facilitation from the two banks: EIB with EUR 180 million (EU grant is EUR 22 million) macro-finance, market access and guarantees; and EBRD with EUR 422 million (EU – EUR 19 million) – access to finance, trade finance and advise for SMEs.
EIB and EBRD will extend DCFTA Facilitation facilities for Phase II and Phase III with provision of EUR 780 million (EU – EUR 34 million) and EUR 861 million (EU – EUR 38 million) respectively.