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EU financial instruments for the development of business in Ukraine

19/ 07/ 2021
    On 14 July, the European Business Association held an expert discussion on EU Financial Instruments for Sustainable Development in partnership with the Delegation of the European Union to Ukraine and Dragon Capital. EU representatives gave an overview of the key financial instruments offered by the European Union to Ukraine, namely the European Fund for Sustainable Development and its extended version – EFSD +. The participants of the meeting had the opportunity to learn about various investment mechanisms and their main features. The European Commission representatives – Katarína Mathernová and Fulvio Capurso introduced the business to the possibilities of EFSD and EFSD + for financing projects of different sectors in Ukraine. They also mentioned relevant tools are currently available in the EU to support the private sector. The European Union uses a so-called mix of EU Blending instruments, which includes both technical assistance and financial grants and loans. In recent years, the EU has updated its work model to involve the private sector for the sake of its development. This enables risk-sharing in new and ambitious projects where EU guarantees are provided to European financial institutions to expand portfolios and instruments of cooperation with local banks and the private sector, which includes not only SMEs as a priority but also larger companies. What should be known about EFSD +? This mechanism will be used during the next 7-year EU budget cycle, which starts this year. Representatives of the European Commission hope that in this way it will be possible to increase the efforts of financial donors by involving the private sector. Areas covered by the program include the digital transition, with which the EU sees significant progress in Ukraine, and green transformation, which is more complex to develop and requires additional funding. Experts expect that with the help of this financial instrument it will be possible to achieve progressive development in the above-mentioned areas, while businesses should also take an active part and seek to establish cooperation with the EU. Expert presentations can be found at the following links: Part 1 & Part 2  Asari Efiong, a representative of the European Bank for Reconstruction and Development, shared information on current or planned EBRD programs in Ukraine related to renewable energy, municipal, infrastructure, and industrial sustainability, financial inclusion, and digital transformation. The experts shared information on the use of guarantees and opportunities for co-financing and adapting programs to the challenges of the pandemic. The full presentation of the speaker can be found at the link. The representative of the European Investment Bank - Marion Hoenicke spoke about opportunities for small and medium-sized businesses. The main goal of the EIB program is to help the private sector to expand and obtain financing through risk-sharing. The mechanism is as follows: EFSD financing is provided by the EIB, which transforms it into a real risk-sharing tool and uses it to work with local banks. With the support of the EIB, banks are ready to work more actively with SMEs although the bank activities previously did not cover the sector. In this context, the EIB aims to change the behavior of banks and interest them in active cooperation with business. So far, the bank has planned guarantees of 100 million euros, which are expected to help attract 800 million euros of potential financial loans. Learn more about the possibilities of cooperation and the results of the implemented programs in Ukraine at the following link. Jim Brands, a representative of the Dutch entrepreneurial development bank FMO, spoke about his programs, which provide opportunities for Ukrainian entrepreneurs. The expert spoke about two guarantee programs that were launched last year. Currently, the banks program offices are not present in Ukraine, but Ukrainian entrepreneurs can also participate and are invited to do so. The first program - NASIRA - is designed for young entrepreneurs, as well as women and migrants who are engaged in business, and those businessmen affected by the pandemic. As a part of this program, the bank provides either a guarantee or technical support. The second program is the FMO venture program for those who want to invest in digital startups. It can be applied to agrotech, fintech, green energy, but the bank is interested in other promising sectors. Learn more about the bank programs at the link. The full recording of the event can be viewed below. https://youtu.be/LLcBEB5fmYI
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On 14 July, the European Business Association held an expert discussion on EU Financial Instruments for Sustainable Development in partnership with the Delegation of the European Union to Ukraine and Dragon Capital.

EU representatives gave an overview of the key financial instruments offered by the European Union to Ukraine, namely the European Fund for Sustainable Development and its extended version – EFSD +. The participants of the meeting had the opportunity to learn about various investment mechanisms and their main features.

The European Commission representatives – Katarína Mathernová and Fulvio Capurso introduced the business to the possibilities of EFSD and EFSD + for financing projects of different sectors in Ukraine. They also mentioned relevant tools are currently available in the EU to support the private sector. The European Union uses a so-called mix of EU Blending instruments, which includes both technical assistance and financial grants and loans. In recent years, the EU has updated its work model to involve the private sector for the sake of its development. This enables risk-sharing in new and ambitious projects where EU guarantees are provided to European financial institutions to expand portfolios and instruments of cooperation with local banks and the private sector, which includes not only SMEs as a priority but also larger companies.

What should be known about EFSD +? This mechanism will be used during the next 7-year EU budget cycle, which starts this year. Representatives of the European Commission hope that in this way it will be possible to increase the efforts of financial donors by involving the private sector. Areas covered by the program include the digital transition, with which the EU sees significant progress in Ukraine, and green transformation, which is more complex to develop and requires additional funding. Experts expect that with the help of this financial instrument it will be possible to achieve progressive development in the above-mentioned areas, while businesses should also take an active part and seek to establish cooperation with the EU.

Expert presentations can be found at the following links: Part 1 & Part 2 

Asari Efiong, a representative of the European Bank for Reconstruction and Development, shared information on current or planned EBRD programs in Ukraine related to renewable energy, municipal, infrastructure, and industrial sustainability, financial inclusion, and digital transformation. The experts shared information on the use of guarantees and opportunities for co-financing and adapting programs to the challenges of the pandemic. The full presentation of the speaker can be found at the link.

The representative of the European Investment Bank – Marion Hoenicke spoke about opportunities for small and medium-sized businesses. The main goal of the EIB program is to help the private sector to expand and obtain financing through risk-sharing. The mechanism is as follows: EFSD financing is provided by the EIB, which transforms it into a real risk-sharing tool and uses it to work with local banks. With the support of the EIB, banks are ready to work more actively with SMEs although the bank activities previously did not cover the sector. In this context, the EIB aims to change the behavior of banks and interest them in active cooperation with business. So far, the bank has planned guarantees of 100 million euros, which are expected to help attract 800 million euros of potential financial loans. Learn more about the possibilities of cooperation and the results of the implemented programs in Ukraine at the following link.

Jim Brands, a representative of the Dutch entrepreneurial development bank FMO, spoke about his programs, which provide opportunities for Ukrainian entrepreneurs. The expert spoke about two guarantee programs that were launched last year. Currently, the bank’s program offices are not present in Ukraine, but Ukrainian entrepreneurs can also participate and are invited to do so. The first program – NASIRA – is designed for young entrepreneurs, as well as women and migrants who are engaged in business, and those businessmen affected by the pandemic. As a part of this program, the bank provides either a guarantee or technical support. The second program is the FMO venture program for those who want to invest in digital startups. It can be applied to agrotech, fintech, green energy, but the bank is interested in other promising sectors. Learn more about the bank programs at the link.

The full recording of the event can be viewed below.

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