Business news from Ukraine

EBRD WILL PROVIDE UKRENERGO WITH EUR50 MLN, PLANS TO SUPPORT UKRAINE WITH DONORS FOR EUR1 BLN

The European Bank for Reconstruction and Development (EBRD) will allow NPC Ukrenergo to change the purpose of a EUR50 million loan for emergency liquidity support, and the European Fund for Sustainable Development will provide a guarantee to cover the first losses.
“This support is part of the EUR1 billion that the EBRD plans to implement in Ukraine this year in cooperation with donors and partners,” the bank said in a press release on Wednesday.
The EBRD notes that EUR50 million will ensure a stable electricity supply in the country, whose economy was significantly negatively affected by the Russian military invasion in February.
“At a time when Ukrainians are resisting Russian aggression, it is important to ensure proper electricity supply in their country, and therefore support the critical role of Ukrenergo. We are also preparing support with the EBRD for other important areas of the Ukrainian economy, which will be provided in the coming weeks , in particular to meet the liquidity needs of the railway and pharmaceutical industries,” Valdis Dombrovskis, Executive Vice President of the European Commission, is quoted in the bank’s message.
He joined EBRD President Odile Renaud-Basso to sign a European Fund for Sustainable Development (EFSD) guarantee on the loan, which will reduce the bank’s credit risk in the current war conditions, the release said.
According to him, Ukrenergo’s support is part of a total EUR1 billion support that the EBRD plans to implement in Ukraine this year in cooperation with donors and partners. In order to meet the most urgent needs of Ukraine, the bank has identified five priority sectors of the Ukrainian economy: trade finance, energy security, vital infrastructure, food security (providing liquidity through banks for farmers for the spring planting campaign, as well as for agricultural companies and grocery retailers), and maintaining liquidity for pharmaceutical companies.
As reported, in July 2019, the EBRD agreed to provide Ukrenergo with EUR149 million to upgrade key elements of the electricity transmission infrastructure to support system stability and synchronization with European electricity grids, as well as to help Ukraine bring its legislation and operating principles in line. with the Third Energy Package of the EU. This loan has been partially disbursed.
Following a Russian-led war, the EBRD and Ukraine agreed to change the purpose of part of an existing loan for emergency liquidity support.
The EFSD is the financial mechanism of the EU’s External Investment Plan, which provides support for investment in Africa and the EU’s partner countries.
The EBRD immediately condemned the Russian invasion of Ukraine on February 24 and promised to stand with Ukraine. On April 4, the Bank’s Board of Governors voted to suspend indefinitely Russia’s and Belarus’ access to EBRD financing and technical assistance. The bank is closing its offices in these two countries. In addition to the EUR2 billion resilience package, the EBRD has pledged to help finance the recovery of Ukraine when conditions permit/
All EBRD investments in Ukraine under the resilience package for Ukraine and neighboring countries affected by the war will involve risk sharing with partners.

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EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT APPROVED FRAMEWORK PROGRAM FOR EUR2 BILLION AS RESPONSE TO RUSSIAN WAR AGAINST UKRAINE

The European Bank for Reconstruction and Development (EBRD) has approved a framework program of up to EUR2 billion under the EBRD’s Sustainability Package, the bank’s broad strategic approach in response to Russia’s war against Ukraine.
“The framework program will use various types of financial instruments for private clients, sovereigns, municipalities, municipal companies and other state-owned enterprises and financial intermediaries (including state-owned banks) in Ukraine and neighboring countries affected by the influx of Ukrainian refugees,” the message says. bank website on Thursday.
According to him, the Board of Directors made a decision on April 4. He included Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Moldova, Poland, Romania, Slovenia and Slovakia among the affected countries.
Subprojects will be provided at the expense of the usual resources of the bank, including its financing under the guarantees of donors, the report specifies.
The overall goal of the program is to help support service delivery and protect business activity in Ukraine and affected countries, with the ultimate goal of preserving livelihoods, the EBRD said.
“For Ukraine, the framework covers all sectors, with a particular focus on energy security, vital infrastructure, food security and pharmaceutical supply chain support,” the release notes.
In the case of the affected countries, refugee-related issues will be addressed, and will mainly cover areas such as energy security, municipal and national infrastructure, and liquidity through capital markets and financial intermediaries.
“As a result of the war in Ukraine, the market for liquidity and long-term financing is practically closed, and in the affected countries is significantly limited, as both local and international financial institutions tighten risk appetite. provides greater financial security driven by unprecedented adverse market conditions and heightened uncertainty,” the paper concludes.

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EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT PROVIDES EUR 2 BLN PACKAGE OF MEASURES TO SUPPORT UKRAINE

The European Bank for Reconstruction and Development (EBRD) will provide the first financing package to support Ukraine’s resilience in the amount of EUR2 billion.
“The European Bank for Reconstruction and Development (EBRD) has announced an initial EUR2 billion resilience package of measures to help citizens, companies and countries affected by the war on Ukraine. The bank has also pledged to do all it can to help with the country’s reconstruction, once conditions allow,” the bank said.
“Funding will be made rapidly available to support Ukrainian companies – for example, with deferred loans, liquidity support, and trade finance. Where possible, businesses will be helped to relocate so their work can continue,” it said.
“In addition, the bank’s Resilience and Livelihoods Framework will help in countries directly affected by inflows of Ukrainian refugees. Women, children and the elderly make up the majority of displaced citizens, and municipal authorities face huge challenges in managing the influx of people,” the report says.
“This package was endorsed today by the Bank’s Board of Directors and represents a first round of support. The EBRD had previously declared its unwavering support to Ukraine and its people, and condemned the aggression by the Russian Federation and Belarus,” according to the document.
“Once conditions permit, the EBRD will also be prepared to take part in a reconstruction program for Ukraine, to rebuild livelihoods and businesses; restore vital infrastructure; support good governance; and enable access to services,” it reads.
“It envisages working with international partners including the EU and U.S., as well as bilateral donors and other international financial institutions. It expects there to be a surge in investment in energy security, as well as an acceleration of decarbonization efforts,” the bank added.

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THE MINISTRY OF FINANCE AND THE EBRD DISCUSS THE PROVISION OF A LOAN TO OSCHADBANK

The Ministry of Finance and the European Bank for Reconstruction and Development (EBRD) have discussed the possibility of providing a subordinated loan to Oschadbank with option to convert the loan into equity shares.
This was reported in a press release of the Ministry of Finance on Wednesday following the meeting of Finance Minister Serhiy Marchenko and Deputy Minister Oleksandr Kava with EBRD Managing Director, Eastern Europe and the Caucasus (EEC) Matteo Patrone.
“During the meeting, the issue of providing Oschadbank with EBRD long-term financing in the form of a subordinated loan with option to convert the loan into equity shares was raised. The parties continue to work actively to implement the sale of a stake in Oschadbank. The key issues remain the completion of the preparation procedures and the accession of Oschadbank to the households deposit guarantee system,” the ministry said.
The parties also discussed potential joint projects with the EBRD for 2022, namely the reconstruction of the Lower Dniester irrigation system.
Earlier, the Ministry of Agricultural Policy and Food announced the readiness of the EBRD to invest EUR 90 million for the reconstruction of the main water pumping station of the Lower Dniester irrigation system (Odesa region).
As reported, in March 2021, Ukrgasbank received a loan of EUR 30 million from IFC with option to convert the loan into equity shares. The next step for the privatization of the bank is to find a financial adviser for the bank.

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EBRD APPROVES €190 MILLION TRANCHE FOR UKRAINE’S ROAD AGENCY

New funds follow steps by Ukravtodor towards strengthening governance
-€190 million loan tranche to upgrade sections of M-05 Kyiv-Odesa road
-Funds extended as road agency takes steps towards strengthening governance
-Reform at Ukravtodor a litmus test for broader anti-corruption programme
Encouraged by steps taken by Ukraine’s state road agency Ukravtodor, the Board of Directors of the European Bank for Reconstruction and Development (EBRD) has approved a new €190 million loan tranche for further improvements to the country’s road infrastructure.
Part of a €450 million package, the tranche will finance the upgrade of sections of the M-05 Kyiv-Odesa road in the Kirovohrad, Mykolaiv and Odesa regions.
The provision of the new tranche follows efforts by Ukravtodor to review its governance systems, with a view to advancing reforms. These include a comprehensive anti-corruption action plan developed by independent experts, which was approved by a high-level steering group comprising representatives of the government, the president’s office, the EBRD and Ukravtodor itself.
The plan, which is already being implemented, envisages a robust approach to integrity compliance, improved corporate governance and internal anti-corruption controls, policies and procedures. It also aims to pave the way for a culture of integrity throughout the organisation.
Ukravtodor’s effort to fight corruption in road building is the pilot programme under the memorandum of understanding signed in October 2020 between the government of Ukraine and the EBRD to strengthen corporate governance in the state sector. It is seen as a litmus test for a broader anti-corruption and good governance programme backed by the EBRD and targeting Ukrainian state-owned enterprises and public-sector entities.
In addition, Ukravtodor has prepared an e-mobility action plan to support electric-vehicle deployment in the country and is establishing a Road Safety Department.
The EBRD is a leading institutional investor in Ukraine. To date, the Bank has invested almost €16 billion in 506 projects across the country, with a focus on assisting economic stabilisation, anchoring reforms, strengthening energy efficiency and energy security, and supporting agricultural and industrial projects as well as smaller businesses.

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UKROLIYA TO GET LOAN FROM EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT

Ukroliya LLC (Chernechy Yar, Poltava region) on August 10 agreed with the European Bank for Reconstruction and Development (EBRD) that the company will raise a loan of EUR 16 million to finance its capital expenditures, working capital requirements, as well as to restructure existing debt, according to a press release from the EBRD.
“The main objective of the project is to support the company’s growth plans and its strategy to expand further in more profitable, premium (organic and high-oleic) and value-added (bottled and refined) sunflower oil sub-segments,” the bank said in the press release.
In addition, as part of the project, Ukroliya, will set up an accredited in-house training centre, in collaboration with local education partners, which will support the company in meeting its skills needs and provide training opportunities for people in Poltava region.
According to the EBRD, the project will support modernisation of the company’s production facilities, including the installation of a biomass boiler and processes to reduce oil content in wastes and reprocess materials for filtering, as well as the increase in production of organic vegetable oil and purchases of organic oilseeds.
The EBRD said that the total cost of this project is EUR 16 million, of which Ukroliya will receive the total required amount.
The press release does not contain other details of the transaction.
Ukroliya LLC was founded in 2001. It is engaged in the production and sale of packaged and bulk sunflower oil, sunflower cake, and husk. Its production facilities are located in the townships of Dykanka and Zinkiv (both in Poltava region).

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