EBRD extends risk cover to Raiffeisen Bank Ukraine to enable EUR 100 mln for energy investments

The European Bank for Reconstruction and Development (EBRD) is further supporting energy security in Ukraine by extending an unfunded portfolio-risk-sharing facility to Raiffeisen Bank Ukraine (RBU), to enable EUR 100 million worth of energy investments.

"Raiffeisen Bank Ukraine joins Ukrgasbank, Privatbank and Oschadbank to participate in the EBRD's Energy Security Support Facility (ESSF) – a landmark programme that enables the country's financial sector to enhance access to financing for critical energy security investments in Ukraine," the EBRD said in a press release on its website.

Under the ESSF, EBRD's portfolio guarantee will partially cover the risk on a total of EUR 100 million of sub-loans extended by RBU to micro, small and medium-sized enterprises (MSMEs) and eligible corporate and household clients for the implementation of decentralised energy generation, storage and energy efficiency measures critical for Ukraine's energy security.

All ESSF sub-borrowers will receive technical assistance with structuring and implementation of their investments. At least 70% of sub-loans will support green economy transition (GET) eligible projects.

Up to 20% of the total sub-loans will support financing of the long-term capital investments of MSMEs to upgrade their technologies and equipment to European Union (EU) standards under the EU4Business-EBRD Credit Line. Eligible sub-borrowers will receive EU-funded technical assistance and grant support.

Residential sub-borrowers (households and housing associations) will receive up to 2% of the total investments under this project, and will also benefit from grant support funded by the EBRD Crisis Response Special Fund (CRSF).

Grant support for eligible sub-borrowers will cover 10-30% of their investment costs financed under the ESSF. Higher incentives will be provided for businesses and households most affected by the war on Ukraine, including those impacted by asset destruction, loss, or relocation due to the war, as well as sub-borrowers facilitating the reintegration of war veterans, persons with disabilities, internally displaced persons, and/or those located in the acutely war-affected territories of Ukraine, according to the press release.

The EBRD facility will be supported by partial first-loss risk cover guarantees extended by France and the European Union's Ukraine Investment Framework (UIF).

"This is the third portfolio-based risk sharing agreement between Raiffeisen Bank and the EBRD since February 2022. These agreements have enabled us to provide over EUR 220 million in financing to Ukrainian clients, along with up to EUR 2 million in incentives for successfully completed investment projects," said Oleksandr Pysaruk, CEO of Raiffeisen Bank Ukraine.

Raiffeisen Bank is Ukraine's largest private bank and fourth largest bank overall. Through its vast branch network, it serves 2.6 million active clients, offering conventional banking products to corporate, SME and retail customers.

The EBRD has already allocated EUR 74 million of EU grant support for Ukrainian MSMEs under the EBRD-EU4Business Credit Line, including EUR 5.5 million to projects through RBU.