EBRD guarantee to Raiffeisen Bank Ukraine to unlock €100 million of new business finance

• EBRD provides unfunded portfolio risk-sharing facility to Raiffeisen Bank Ukraine 

• Facility will unlock €100 million of new financing for Ukrainian businesses 

• Focus on agribusiness and critical industries, with EU support for competitiveness upgrades 

The European Bank for Reconstruction and Development (EBRD) is extending an unfunded portfolio risk-sharing facility to Ukraine’s Raiffeisen Bank Ukraine to unlock €100 million of new finance for Ukraine’s business sector amid the ongoing war waged by Russia.  

The EBRD’s facility will cover up to 50 percent of Raiffeisen’s credit risk on new finance worth €100 million to businesses operating in Ukraine. This credit enhancement mechanism enables Raiffeisen to finance the agribusiness sector and other critical industries, such as manufacturing, transport and logistics, supporting company operations and preserving access to critical goods as a vital step in safeguarding people’s livelihoods. 

Total enabled financing under similar EBRD guarantees signed from the start of Russia’s full-scale war on Ukraine until end-May 2024 amounts to about €1.1 billion.  

One element of the facility is a programme to enhance the competitiveness of micro, small and medium-sized enterprises (MSMEs) in the European Union’s (EU) Eastern Partnership countries. Up to 20 per cent of the risk-shared loans will support private MSMEs’ long-term investments in EU-compliant and green technologies, improving their competitiveness on domestic and foreign markets. Eligible sub-borrowers will also receive EU-funded technical assistance upon completion of their investment projects under the bloc’s EU4Business initiative and investment incentives from the USA via the Crisis Response Special Fund. 

In new additions to such risk-sharing agreements, sub-borrowers that have suffered asset destruction, loss or relocation due to the war or those engaged in reintegrating veterans into the workforce are eligible for additional investment incentives. 

The war has affected the availability of Ukraine’s skilled workforce, with several million people living outside the country or internally displaced inside Ukraine and hundreds of thousands more serving in the armed forces. A key element in planning the country’s continued economic resilience is boosting its human capital by attracting more people to return and re-enter the country’s much reduced workforce. 

Raiffeisen Bank Ukraine is the fourth largest bank in Ukraine and the largest private bank with 6.7 per cent market share by assets as at end 2023. The bank has 320 branches and 1,567 ATMs, servicing 2.65 million active clients offering conventional banking products to corporate, SME and retail customers. The EBRD has long-standing and successful relationship with RBU since 1998. 

The EBRD has deployed more than €4.2 billion in Ukraine since the start of Russia’s full-scale war in February 2022. As well as supporting the private sector, its strategic priorities in the country are to support energy and food security and maintain critical infrastructure. EBRD shareholders have recently agreed to provide a €4 billion paid-in capital increase to enable the Bank to continue investing at current levels in wartime, with the potential for more investments when reconstruction starts.