The European Bank for Reconstruction and Development and EU4Business have launched a credit line for Ukrainian SMEs where individual borrowers can receive loans of up to EUR 3 million in UAH equivalent.
Thousands of Ukrainian SMEs are expected to benefit from funds worth up to EUR 60 million, the EBRD press service noted.
The credit line will support privately-owned businesses registered in Ukraine with up to 250 employees. Individual borrowers can receive up to €3 million in Ukrainian hryvnia (UAH) equivalent. The local currency loans will protect borrowers from FX-related risks and have long maturities.
The credit line will initially be operated through the State Export-Import Bank of Ukraine (UkrEximBank), which has earmarked an allocation of funds worth EUR 22 million (US$ 25 million) and OTP Leasing Ukraine with an allocation of EUR10 million.
Additional loan resources of around EUR 28 million are expected in the near future and will be available to other local financial institutions set to join the credit line.
Participating companies will also receive support in adjusting their production to relevant EU Directives, which will allow them to access the EU single market as competitive contenders.
Matteo Patrone, EBRD Managing Director, Eastern Europe and the Caucasus, said: “This credit line is about integration both in a geographical and an economic sense. Following the establishment of the DCFTA between the EU and Ukraine, multiple opportunities have opened for domestic businesses. The launch of the EU4Business-EBRD Credit Line provides local SMEs, which create almost 80 per cent of jobs in the country but are currently responsible for only about 40 per cent of GDP, with additional access to finance, so they can develop further, become more competitive and comply with EU standards.”
In addition, the EU4Business-EBRD Credit Line will also offer grant incentives to qualified projects. Ukrainian SMEs willing to use eligible technologies, achieve full compliance with sanitary, phytosanitary and food safety regulations or implement complex projects that comply with several EU regulations, will be able to receive an incentive grant for up to 15% of the project cost.
Ambassador Hugues Mingarelli, Head of the EU Delegation to Ukraine: “The EU works hard to ensure that these credit lines bring concrete benefits to the Ukrainian small and medium enterprises — and contribute to both economic growth in Ukraine and stronger economic ties between Ukraine and the EU. In 2018 Ukrainian exports to the EU grew by 15 per cent, imports by 11.5 per cent compared to the previous year; we see these DCFTA credit lines as instrumental in continuing these positive trends."
UNIAN memo. EBRD has been operating in Ukraine since 1993, being the largest international investor in Ukraine.
Over the period of cooperation, EBRD has financed 410 projects in Ukraine totaling EUR 13 billion, including seven projects worth EUR 1.577 billion in the state sector.