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Financing opportunities from BGK for businesses under the Ukraine Investment Facility

10/ 04/ 2024
  To discover the opportunities for Ukrainian and foreign businesses seeking finance for their projects offered by the BGK - Bank Gospodarstwa Krajowego, including under the Ukraine Facility Pillar 2, the EBA held the extended Ukraine Recovery Committee meeting with BGK experts. BGK is a Polish state development bank and a national promotional institution of Poland with A-/stable rating by Fitch, and A2-/ in foreign and domestic currency (equal to the rating of Poland) by Moody’s. Balance sheet total amounts to 207 bln PLN (44 bln EUR). BGK focuses on supporting sustainable socioeconomic development of Poland. In 2022, 84% of the amount of support generated by BGK helped to address 11 of 17 UN sustainable goals. Since 2020, BGK has been accredited by European commission – pillar assessment. BGK has become European Commission’s Implementing Partner for such programs as InvestEU Fund, NDICI, EFSD+, blending. BGK focuses on the projects in Poland but also supports Polish exports, currently in 87 countries, Ukraine included. Main facilities offered for Polish exporters are as follows: Export Letter of Credit  Buyer’s bank credit (Polish company as an exporter, in cooperation with KUKE) - subject to KUKE approval Payment guarantee under the counter-guarantee of a foreign bank (Polish company as a beneficiary) Buyer’s credit (Polish company as an exporter) - subject to KUKE approval Please, find out more about the BGK financial products in the presentation. Ukraine Facility Guarantee Under the Ukraine Investment Facility, proposed by the European Commission, the funds of 50 bln EUR will be divided in 3 pillars. BGK, along with other EU national development banks, will be allowed to apply for the instruments under the second pillar to mobilize investments thanks to the risk sharing mechanisms. BGK investigates the possibility to support Ukraine’s rebuilding efforts via long term investment loans secured with Ukraine Facility Guarantee (the terms of the investment are still to be announced by the EC). In this regard, BGK foresees two potential financial projects: 1)         Direct loans for investment projects for both European and Ukrainian private partners with the following characteristics: Equity: minimum 30% of the total project costs (max 70% of debt financing); Size of the project: minimum EUR 5 mln, maximum not determined yet; Currency: EUR (the loan has to be denominated and repaid in EUR); Tenor: to be determined, possibly financing up to 10+ years. 2)         Intermediated financing through local Ukrainian banks Limits risks for creation and support of local market; Easily implementable in the prolonged war scenario; Indirectly can support Polish businesses with tailor-made solutions for certain sectors of Ukrainian economy. Video recording of the meeting is available via the link. Please note: The EBA members are encouraged to submit proposals outlining the financial assistance required under the Ukraine Facility Pillar 2. Also, please do not hesitate to reach out to us for contacts of colleagues from BGK. Should you have any questions or interested in mentioned opportunities, please contact [email protected]  We thank BGK and its experts – Karol Tofil, Head of International Partnerships Office, Department for International Development, and Feliks Kobierski, Chief Expert in International Expansion and Trade Finance Department – for the cooperation!  

To discover the opportunities for Ukrainian and foreign businesses seeking finance for their projects offered by the BGK – Bank Gospodarstwa Krajowego, including under the Ukraine Facility Pillar 2, the EBA held the extended Ukraine Recovery Committee meeting with BGK experts.

BGK is a Polish state development bank and a national promotional institution of Poland with A-/stable rating by Fitch, and A2-/ in foreign and domestic currency (equal to the rating of Poland) by Moody’s. Balance sheet total amounts to 207 bln PLN (44 bln EUR).

BGK focuses on supporting sustainable socioeconomic development of Poland. In 2022, 84% of the amount of support generated by BGK helped to address 11 of 17 UN sustainable goals. Since 2020, BGK has been accredited by European commission – pillar assessment. BGK has become European Commission’s Implementing Partner for such programs as InvestEU Fund, NDICI, EFSD+, blending.

BGK focuses on the projects in Poland but also supports Polish exports, currently in 87 countries, Ukraine included. Main facilities offered for Polish exporters are as follows:

  1. Export Letter of Credit 
  2. Buyer’s bank credit (Polish company as an exporter, in cooperation with KUKE) – subject to KUKE approval
  3. Payment guarantee under the counter-guarantee of a foreign bank (Polish company as a beneficiary)
  4. Buyer’s credit (Polish company as an exporter) – subject to KUKE approval

Please, find out more about the BGK financial products in the presentation.

Ukraine Facility Guarantee

Under the Ukraine Investment Facility, proposed by the European Commission, the funds of 50 bln EUR will be divided in 3 pillars. BGK, along with other EU national development banks, will be allowed to apply for the instruments under the second pillar to mobilize investments thanks to the risk sharing mechanisms.

BGK investigates the possibility to support Ukraine’s rebuilding efforts via long term investment loans secured with Ukraine Facility Guarantee (the terms of the investment are still to be announced by the EC). In this regard, BGK foresees two potential financial projects:

1)         Direct loans for investment projects for both European and Ukrainian private partners with the following characteristics:

  • Equity: minimum 30% of the total project costs (max 70% of debt financing);
  • Size of the project: minimum EUR 5 mln, maximum not determined yet;
  • Currency: EUR (the loan has to be denominated and repaid in EUR);
  • Tenor: to be determined, possibly financing up to 10+ years.

2)         Intermediated financing through local Ukrainian banks

  • Limits risks for creation and support of local market;
  • Easily implementable in the prolonged war scenario;
  • Indirectly can support Polish businesses with tailor-made solutions for certain sectors of Ukrainian economy.

Video recording of the meeting is available via the link.

Please note: The EBA members are encouraged to submit proposals outlining the financial assistance required under the Ukraine Facility Pillar 2. Also, please do not hesitate to reach out to us for contacts of colleagues from BGK. Should you have any questions or interested in mentioned opportunities, please contact [email protected] 

We thank BGK and its experts – Karol Tofil, Head of International Partnerships Office, Department for International Development, and Feliks Kobierski, Chief Expert in International Expansion and Trade Finance Department – for the cooperation!  

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