EBRD, Raiffeisen boost МSMEs funding in Ukraine
- EBRD providing €75 million guarantee to Raiffeisen Bank JSC in Ukraine
- Innovative mechanism unlocks funding for MSMEs
- 30 per cent of the project to finance green technologies
The European Bank for Reconstruction and Development (EBRD) and Raiffeisen Bank JSC in Ukraine (Raiffeisen Bank) are strengthening cooperation to boost funding available for Ukrainian micro, small and medium businesses (MSMEs).
The EBRD is providing Raiffeisen Bank with an unfunded guarantee of up to €75 million in local currency linked to the bank’s domestic sovereign bond portfolio. Additional risk-taking capacity freed-up by the guarantee will allow Raiffeisen Bank to commit fresh funds to Ukrainian businesses, increasing support to the real economy.
The facility constitutes a new instrument not available in the Ukrainian market to date and follows innovative Guarantee for Growth facility pioneered in Albania in 2020.
Raiffeisen Bank’s lending under the mechanism will have a particular focus on supporting local MSMEs which are vital for sustainable growth of Ukraine’s economy. At least 30 per cent of the funds will be used to finance high performance sustainable technologies advancing the country’s environmental and climate mitigation aspirations and are in line with the Bank’s Green Economy Transition (GET) approach.
“We are proud that our partnership with EBRD supports the economy with additional volumes of funding to small and medium enterprises and encourages entrepreneurs to explore green technology projects. The participation in this facility confirms Raiffeisen Bank’s commitment to Ukraine, its status as one of the biggest lenders in the country, and innovative approach to support its growth plans,” said Oleksandr Pysaruk, CEO of Raiffeisen Bank.
Matteo Patrone, EBRD Managing Director for Eastern Europe and the Caucasus said “Together with our long-standing partner Raiffeisen we are now expanding the Guarantee for Growth to a new market, Ukraine. The project will improve access to finance for MSMEs at a critical time while also encouraging investments in green technologies. I am pleased that the trust and confidence we have built with Raiffeisen enables us to innovate and benefit businesses and economies where both banks are active.”
As part of the project, the EBRD is working with the National Bank of Ukraine to ensure that the local prudential framework is aligned with the European Union banking sector standards. The programme complements the work under the Vienna Initiative where the EBRD promotes alignment of regulatory practices in its region with international standards.
Raiffeisen Bank is the fourth largest bank in Ukraine in terms of total assets and the third largest bank in terms of performing loans. The bank provides a wide range of services to 2.8 million clients countrywide. Since October 2005, it has been part of the Austrian banking group Raiffeisen Bank International AG.
The EBRD is a leading institutional investor in Ukraine. To date, the Bank has invested more €15.5 billion in 507 projects across the country, with a focus on assisting economic stabilisation, anchoring reforms, strengthening energy efficiency and energy security, and supporting agricultural and industrial projects as well as smaller businesses.
