The European Bank for Reconstruction and Development (EBRD) and the European Union (EU) are opening the EU4Business-EBRD credit line with the limit of EUR 60 million to finance projects of small- and medium-sized enterprises (SME) in Ukraine, EBRD Managing Director, Eastern Europe and Caucasus Matteo Patrone said at a presentation of the project in Kyiv on Friday.
He said the credit line with a limit of around EUR 60 million is intended for SME for using opportunities opened in relation with the Deep and Comprehensive Free Trade Area (DCFTA) Agreement signed by the EU and Ukraine.
Patrone said that borrowers using this credit line will be able to receive long-term loans in the amount of up to EUR 3 million. The loans will be issued in hryvnias.
The credit line is integration from the point of geography and economy, he said. After the establishment of the DCFTA between the EU and Ukraine, local companies obtained many opportunities. The launch of the EU4Business-EBRD credit line allows local SME, which provide almost 80% of jobs in Ukraine, but generate only around 40% of GDP, to have an additional access to financing to develop, become more competitive and meet EU standards, Patrone said.
For projects within the EU4Business-EBRD credit line that will meet certain requirements, incentive grants are also provided to cover up to 15% of the cost of projects.
Patrone said that the funds under this credit line will be provided through state-owned Ukreximbank, which received the equivalent of EUR 22 million for this program, and OTP Leasing, which received EUR 10 million in equivalent. Additional credit resources of around EUR 28 million will be available for other local financial institutions to join this program.
Head of the EU Delegation to Ukraine Hugues Mingarelli said during the presentation of the project that similar credit lines are opened to Georgia and Moldova.
The EU is trying to ensure that these credit lines benefit Ukrainian SME, as well as promote economic growth in Ukraine and strengthen economic relations between the country and the EU. In 2018, exports of Ukrainian goods to the EU grew by 15%, while imports of goods from EU by 11.5%, he said. The EU believes that the DCFTA credit lines contribute to the preservation of these positive trends, Mingarelli said.
The European Bank for Reconstruction and Development (EBRD) is preparing the new Ukraine Sustainable Energy Lending Facility (USELF-III) for the amount of EUR 250 million, the bank has reported on its website. “Therefore, to continue supporting the Ukrainian renewable energy sector, the EBRD, intends to commit an envelope of EUR 250 million from its own resources to finance new private renewable energy projects in Ukraine,” the bank said.
EBRD launched USELF in 2009 to support and finance the first non-large hydropower renewable energy projects in Ukraine. The original Ukraine Sustainable Energy Lending Facility (USELF) is set to expire on June 30, 2018. Since inception, the facility has invested more than EUR 100 million to finance over 150 MW across all renewable energy technologies.
Germany is ready to allocate EUR 10 million for projects of the Energy Efficiency Fund and EUR 4 million for the training of energy auditors and training of the Fund’s employees, Minister for Regional Development, Construction, Housing and Utilities Hennadiy Zubko has said. “The German government is ready to sign an agreement with IFC – International Finance Corporation – on adding additional EUR 10 million to the Multi-Donor Fund for co-financing the projects of the Energy Efficiency Fund of Ukraine,” Zubko wrote on his Facebook page.
He also said that the German government had agreed on the implementation of the project of technical assistance to Ukraine in the training of professional energy auditors and training of the Fund’s employees in the amount of EUR10 million.
As earlier reported, the Cabinet coordinated a joint program with the EU for financing the Energy Efficiency Fund in the amount of EUR 268 million. According to the Ministry of Regional Development’s press service, EU assistance in 2018 will be EUR 50 million, in 2019 – EUR 54 million. The press service also recalled that the financing of the Energy Efficiency Fund from the state budget will be UAH 1.6 billion in 2018.