EBRD guarantee to Ukraine’s JSC OTP Bank to enable €120 million of lending to private sector
The European Bank for Reconstruction and Development (EBRD) is extending an unfunded portfolio risk-sharing facility to Ukraine’s JSC OTP Bank (OTPU), to unlock €120 million of new financing for Ukraine’s private sector amidst the ongoing war.
The EBRD’s facility will cover up to 50 per cent of JSC OTP Bank’s credit risk on newly issued sub-loans worth €120 million to private businesses operating in Ukraine. This credit enhancement mechanism enables OTPU to finance critical industries such as agriculture, manufacturing, transport and logistics, supporting companies’ operations and preserving access to critical goods as a vital step in safeguarding people’s livelihoods.
Total enabled financing under similar EBRD guarantees, signed since the start of Russia’s full-scale war on Ukraine, amounted to close to €900 million as of end-2023.
This agreement between the EBRD and JSC OTP Bank is an extension of cooperation in support of Ukrainian businesses which began in 2022. 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 Eastern Partnership countries.
Up to 15 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. Upon completion of their investment projects, eligible sub-borrowers will receive investment incentives financed by the European Union under its EU4Business initiative, as well as technical assistance.
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