The European Bank for Reconstruction and Development (EBRD) has expanded its cooperation with ProCredit Bank Ukraine, extending a new risk-sharing facility to support lending to critical industries in Ukraine. The EBRD's guarantee of €7.5 million, announced on Tuesday, will back up to 50% of the credit risk of €30 million in newly originated financing from ProCredit Bank to private businesses in Ukraine.
This follows similar facilities signed with ProCredit Bank in May and November 2022. Since the start of the war, the EBRD’s enabled financing in Ukraine under similar guarantees amounts to €738 million. The guarantee will assist ProCredit Bank Ukraine in continuing to lend to Ukrainian private companies operating in critical industries such as agriculture, manufacturing, food production, transport and logistics, energy security and retail.
Up to 15% of the risk-shared sub-loans will be directed to small and medium-sized enterprises (SMEs) seeking to invest in EU-compliant sustainable technologies. These SME investments will be supported by technical assistance and investment incentives funded by the European Union (EU) under the EU SME Competitiveness Programme.
JSC ProCredit Bank Ukraine is a wholly-owned subsidiary of ProCredit Holding AG & Co. KGaA, leading the market in financing of SMEs in Ukraine. SMEs account for more than 98% of the bank’s loan book.
In 2022, EBRD deployed €1.7 billion in Ukraine and mobilized an additional €200 million from partner banks. The bank committed to deploying €3 billion there in 2022-23 and has so far mobilized €1.5 billion from international donors. EBRD’s primary focus for Ukraine during the war is on maintaining energy and food security, restoring critical infrastructure at the national and municipal level, providing trade finance and supporting the private sector.
On the same day, the EBRD also announced a program to support SMEs in southern Türkiye, affected by the twin earthquakes that struck on February 6. The program will provide each business with a grant that covers 85% of the reconstruction and repair costs, for a maximum of €60,000 ($64,275). This initiative is financially supported by Japan's Finance Ministry and will be implemented in the quake-hit provinces of Adana, Adiyaman, Diyarbakir, Elazig, Hatay, Gaziantep, Kahramanmaras, Kilis, Malatya, Osmaniye, and Sanliurfa.
The Reconstruction Assistance and Grant programme follows the EBRD's €1.5 billion investment plan for the region over the next two years. The plan aims to reduce the economic impact of the disaster and includes the €600 million Disaster Response Framework. Arvid Tuerkner, the EBRD's managing director for Türkiye said this new SME programme will foster a more sustainable reconstruction and robust recovery. Since 2009, EBRD has invested more than €18 billion in Türkiye, mainly in the private sector.
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