The European Bank for Reconstruction and Development (EBRD) is stepping up its support for Ukraine's businesses and banking sector with a new guarantee, unlocking up to €200 million in fresh lending. This move aims to boost the country's economic resilience and competitiveness in key sectors like agriculture, manufacturing, trade, transportation, and logistics.
The EBRD's innovative unfunded portfolio risk-sharing facility will partially cover ProCredit Bank Ukraine's (PCBU) credit risk on new loans. This empowers PCBU to extend much-needed funding to Ukrainian private businesses, including those led by veterans. The loans will not only support these businesses but also enhance their resilience, with EU backing for competitiveness upgrades.
This is the largest portfolio risk-sharing facility the EBRD has provided to PCBU since Russia's full-scale invasion of Ukraine. Building on six previous successful instruments, it demonstrates the EBRD's commitment to Ukraine's long-term recovery. Since the invasion, the EBRD has facilitated nearly €3.29 billion in financing for Ukrainian borrowers through similar facilities with 12 partner financial institutions.
The new facility will specifically boost the competitiveness of micro, small, and medium-sized enterprises (MSMEs) in Ukraine. Twenty percent of the sub-loans covered by the EBRD guarantee will go to MSMEs for long-term investments in EU-compliant and green technologies, improving their market standing both domestically and internationally.
Eligible sub-borrowers will also receive EU-funded technical assistance and investment incentives, such as grants, upon completing their projects under the EU4Business initiative. Higher incentives will be provided for businesses and households most affected by the war, including war veterans, people with disabilities, internally displaced persons, and those in war-torn territories, to facilitate their reintegration into the workforce.
The EBRD has already allocated €75.4 million in EU grant support to Ukrainian MSMEs through the EU4Business-EBRD Credit Line, with €5.8 million issued to projects via PCBU. PCBU is committed to supporting war veterans as both employees and clients, adhering to the EBRD and National Bank of Ukraine's guidance on inclusivity and accessibility.
The EBRD's facilities are backed by partial first-loss risk cover from the EU under its Ukraine Investment Framework. PCBU, a subsidiary of ProCredit Holding AG, is one of Ukraine's largest banks by assets and a leading provider of SME finance, with a long-standing partnership with the EBRD.
