The European Investment Bank (EIB), the bank of the European Union, will provide a €20 million top-up to the existing loan with the Export-Import Bank of Ukraine (Ukreximbank). Additional financing will be made available in local currency to Ukrainian small and medium-sized enterprises (SMEs). The European Union supports the operation with a grant contribution, which will help improve terms and conditions of the funding made available to SMEs.
The EU contribution forms part of the European Union's wider EU4Business initiative, which brings together EU support for SME development and improves the business environment in the Eastern Partnership region.
The loan supports private sector development, including recovery of SMEs from the economic impact of the COVID-19 pandemic, which is one of the five flagship objectives of the European Union`s Economic and Investment Plan for the Eastern Partnership in Ukraine. It is one of the four financing agreements in the region combining EIB loans and EU grants worth a total of €171 million that were finalised in the margins of the EU – Eastern Partnership Summit in Brussels.
EIB Vice-President Teresa Czerwińska, who is responsible for operations in Ukraine, said: “SMEs are the backbone of the Ukrainian economy and have been hit particularly hard by the COVID-19 crisis. Improved access to affordable finance in local currency is one of our main priorities, especially at a time when SMEs need strong support to overcome the challenges and the liquidity shortfall created by the COVID-19 pandemic. We are thankful for the European Union’s support and happy to be further extending our long-standing cooperation with Ukreximbank.”
Katarína Mathernová, Deputy Director-General for Neighbourhood Policy and Enlargement Negotiations, Head of the Support Group for Ukraine, said: “Within the current pandemic context, it is even more important to align efforts to ensure the sustainable recovery of businesses and reduce as much as possible the implicit negative socio-economic consequences derived from the slowdown of economic activity. Thanks to this new agreement between the EIB and Ukreximbank, an additional number of Ukrainian small and medium businesses will be able to get improved access to affordable long-term finance in local currency for creating new jobs and new sources of income.”
Acting Chairman of the Management Board of Ukreximbank Serihiy Yermakov said: “The loan provided by the EIB testifies successful ongoing partnership between Ukreximbank and the EU Bank that started ten years ago. We are grateful that the EIB and the EU continue to stand by us during these challenging times, as this partnership allows us to keep up our support to Ukrainian SMEs to live through the COVID-19 pandemic”.
Team Europe supports sustainable and faster social and economic development of Ukraine
The EIB loan also benefits from the Currency Exchange Fund, an innovative financial institution, which provides long-term local currency and interest rate derivatives in emerging market currencies to its investors and their clients.
The operation supports implementation of EU’s new Economic and Investment Plan, designed to accelerate post–COVID-19 recovery and increase the resilience of Ukraine and other Eastern Partnership countries by generating economic growth and employment opportunities.
Note to editors:
About the EIB:
The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals.
About the EIB in Ukraine:
The EIB has worked with Ukraine since 2007. Ukraine has been the main recipient country of EIB support in the Eastern Neighbourhood, accounting for more than 60% of EIB lending activity in this region. The Bank focuses on social and economic infrastructure, transport and connectivity, local private sector development, energy efficiency, climate action and innovation. Today, the EIB is one of the largest investors in Ukraine with signed projects of more than €7 billion.
Joint-stock company State Export-Import Bank of Ukraine (JSC Ukreximbank) is 100% state-owned. It is one of the major operators in the Ukrainian banking market, serves a considerable proportion of Ukrainian enterprises’ export and import activities and has unique experience in the Ukrainian market in various areas of export-import banking, including documentary business and trade finance. It acts as the sole financial agent of the Government of Ukraine with respect to loans from foreign financial institutions that are originated, borrowed or guaranteed by Ukraine. Ukreximbank has the widest foreign network of correspondents and long-standing reliable partners worldwide of all Ukrainian banks. It is favoured with credit lines from global financial institutions for short-term documentary and trade finance transactions and is the only Ukrainian bank recognised by 36 primary export credit agencies as a direct borrower/guarantor for medium and long-term financing. Ukreximbank has a well-developed branch network covering all main regions and industrial centres of Ukraine.
The Neighbourhood Investment Platform (NIP) is supports EU partner countries covered by the European Neighbourhood Policy (ENP) in their efforts towards better governance and economic and social development, through matching loans from European public finance institutions (including EIB) with Community grants. NIP supports infrastructure projects mainly in the energy, transport and environment sectors. The NIP also supports development of the private sector. Technical assistance (TA) grants are used to improve the implementation of financed projects, thereby enhancing policy coherence between EIB project decisions, country and sectoral economic reforms and overall ENP objectives.
EU Economic and Investment Plan (EIP) On 2 July, 2021, the European Commission and the EU High Representative for Foreign Affairs and Security Policy outlined a proposal on how to take forward priorities for cooperation with our Eastern partners in the years to come. This agenda is based on the five long-term objectives, with resilience at its core, as defined for the future of the Eastern Partnership in March 2020. It will be underpinned by a €2.3 billion Economic and Investment plan in grants, blending and guarantees, with a potential to mobilise up to €17 billion in public and private investments.
Olga Sushytska, [email protected], tel.: +38 067 243 63 55