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EBRD guarantee to OTP BANK JSC in Ukraine to enable €120 million of lending to private sector

06/ 05/ 2024
  The European Bank for Reconstruction and Development (EBRD) is extending an unfunded portfolio risk-sharing facility to OTP BANK JSC in Ukraine, to unlock €120 million of new financing for Ukraine’s private sector amidst the ongoing war waged by russia. The EBRD’s facility will cover up to 50 per cent of OTP BANK JSC’ credit risk on newly issued sub-loans worth €120 million to private businesses operating in Ukraine. This credit enhancement mechanism enables OTP BANK JSC to finance critical industries such as agriculture, manufacturing, transport and logistics, supporting companies’ operations and preserving access to critical goods as a vital step in safeguarding people’s livelihoods. Total enabled financing under similar EBRD guarantees, signed since the start of russia’s full-scale war on Ukraine, amounted to close to €900 million as of end-2023.  The EBRD facility will be supported by first loss risk cover funded by the EBRD Crisis Response Special Fund (CRSF) (USA, France, Canada, Italy, Japan, Norway, Switzerland, the United Kingdom, Germany, Netherlands, Denmark) as part of the Bank’s resilience package arrangements.This agreement between the EBRD and OTP BANK JSC is an extension of cooperation in support of Ukrainian businesses which began in 2022. One element of the facility is a programme to enhance the competitiveness of micro-, small- and medium-sized enterprises (MSMEs) in the European Union’s Eastern Partnership countries. Up to 15 per cent of the risk-shared loans will support private MSMEs’ long-term investments in EU compliant and green technologies, improving their competitiveness on domestic and foreign markets. Eligible sub-borrowers will also receive EU-funded technical assistance and investment incentives upon completion of their investment projects under its EU4Business initiative. The EBRD has deployed €4 billion in Ukraine since the start of the full-scale war. In addition to supporting the private sector, its strategic priorities in the country are to support energy, food safety and critical infrastructure.

The European Bank for Reconstruction and Development (EBRD) is extending an unfunded portfolio risk-sharing facility to OTP BANK JSC in Ukraine, to unlock €120 million of new financing for Ukraine’s private sector amidst the ongoing war waged by russia.

The EBRD’s facility will cover up to 50 per cent of OTP BANK JSC’ credit risk on newly issued sub-loans worth €120 million to private businesses operating in Ukraine. This credit enhancement mechanism enables OTP BANK JSC to finance critical industries such as agriculture, manufacturing, transport and logistics, supporting companies’ operations and preserving access to critical goods as a vital step in safeguarding people’s livelihoods. Total enabled financing under similar EBRD guarantees, signed since the start of russia’s full-scale war on Ukraine, amounted to close to €900 million as of end-2023. 

The EBRD facility will be supported by first loss risk cover funded by the EBRD Crisis Response Special Fund (CRSF) (USA, France, Canada, Italy, Japan, Norway, Switzerland, the United Kingdom, Germany, Netherlands, Denmark) as part of the Bank’s resilience package arrangements.This agreement between the EBRD and OTP BANK JSC is an extension of cooperation in support of Ukrainian businesses which began in 2022. One element of the facility is a programme to enhance the competitiveness of micro-, small- and medium-sized enterprises (MSMEs) in the European Union’s Eastern Partnership countries.

Up to 15 per cent of the risk-shared loans will support private MSMEs’ long-term investments in EU compliant and green technologies, improving their competitiveness on domestic and foreign markets. Eligible sub-borrowers will also receive EU-funded technical assistance and investment incentives upon completion of their investment projects under its EU4Business initiative.

The EBRD has deployed €4 billion in Ukraine since the start of the full-scale war. In addition to supporting the private sector, its strategic priorities in the country are to support energy, food safety and critical infrastructure.

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