EBRD expands Ukraine bank financing with €140 million in new commitments

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EBRD expands Ukraine bank financing

Highlights

EBRD commits €140 million in new financing to Ukraine, including €30 million to ProCredit Bank Ukraine, €10 million to Bank Lviv, and €50 million tranches each with Oschadbank and Raiffeisen Bank Ukraine.
Oschadbank receives a €50 million tranche as part of the €100 million Energy Security Support Facility, targeting decentralized energy generation and energy-efficiency, prioritizing war-affected borrowers.
Since 2022, EBRD instruments have enabled nearly €8 billion of finance to Ukrainian businesses and households, maintaining its role as the country’s largest institutional investor.

Financing package targets SMEs and energy resilience

As reported by European Bank for Reconstruction and Development, the new package includes a €30 million equivalent local-currency senior loan for ProCredit Bank Ukraine, a €10 million equivalent local-currency tranche for Bank Lviv, and two €50 million portfolio risk-sharing tranches with Oschadbank and Raiffeisen Bank Ukraine.

The ProCredit Bank Ukraine facility, denominated in hryvnia, is designed to expand long-term local-currency financing for Ukrainian small and medium-sized enterprises and corporates. The EBRD says the funding helps borrowers limit foreign-exchange risk, keep operating in difficult conditions and invest with greater confidence; the facility is backed by the European Commission through the Ukraine Investment Framework and by the U.S. through interest-rate subsidy support.

For Bank Lviv, the €10 million commitment marks the third tranche of the EBRD’s €40 million local-currency loan, which the bank describes as the largest hryvnia loan it has provided to a partner bank in Ukraine since the start of the full-scale invasion. Part of that funding is earmarked for capital investments that improve competitiveness and alignment with European Union standards, with support from the U.S., Sweden, the EU and UK-backed British International Investment.

The Oschadbank tranche forms the second part of a €100 million Energy Security Support Facility between the two lenders. The financing is intended to expand lending for decentralized energy generation, energy storage and energy-efficiency projects as Ukraine’s energy infrastructure remains under attack.

Support broadens wartime economic recovery effort

The €50 million commitment to Raiffeisen Bank Ukraine represents the fourth and final tranche under the EBRD’s €200 million unfunded portfolio risk-sharing facility. It is set to support working-capital and investment financing for private businesses across key sectors, while also using an Enterprise Security Enhancement mechanism that allows partial debt relief for borrowers whose financed assets suffer war-related damage.

The Oschadbank facility also directs priority financing to borrowers most affected by the war, including veterans, internally displaced persons, returnees, people with disabilities, and women- and youth-led enterprises. Support for that program includes European Commission backing through the Ukraine Investment Framework, first-loss risk cover from France and Dutch incentive grants for household energy-security investments.

The EBRD says it remains Ukraine’s largest institutional investor and has increased its activity in the country since Russia’s full-scale invasion began in 2022. Since the start of the war, its instruments for Ukraine’s financial institutions have enabled almost €8 billion of finance for tens of thousands of businesses and households.

In our earlier article on HSBC’s raised year-end target for Europe’s STOXX 600, we covered how improving sentiment was driven by expectations of stronger earnings and growing confidence that the region can weather recent economic and energy disruptions. We also noted the bank’s view that a weaker euro and a more domestic revenue mix could support corporate profits, alongside shifts in country positioning such as an upgrade of Italy and a downgrade of France.

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