Loans to small and medium-sized enterprises (SMEs) in Ukraine and to selected larger companies, as well as for renewable energy projects, will become available to a greater number of domestic firms following the signing of a Risk Sharing Facility (RSF) under the EU4Business initiative, between the European Bank for Reconstruction and Development (EBRD) and Raiffeisen Bank Aval in Kyiv on 22 January.
Under the programme, the EBRD will share the risk on individual loans made by Raiffeisen Bank Aval to SMEs in the total amount of up to €20 million over a period of three years. The RSF will help increase the size and tenor of loans to businesses across the country. This will be achieved through the enhanced risk-taking capacity of Raiffeisen Bank Aval in partnership with the EBRD.
Borrowers under the RSF will benefit from various technical cooperation programmes, including a comprehensive package of technical assistance available from the EBRD through the EU4Business programme, financed by the European Union. In particular, Ukrainian firms will tap into the best international expertise available in areas such as financial management, IT development, and the optimisation of production and management processes.
Volodymyr Lavrenchuk, CEO of Raiffeisen Bank Aval, noted: “We are pleased to announce the start of our cooperation with the EBRD within the framework of another important project, which widens our capacity for long-term financing and technical support of medium-sized businesses. Last year, we issued loans to more than 1,100 companies, including 300 new clients. The programme is an opportunity to double our support for Ukrainian companies in their business development. This sphere has been and remains one of the priorities of our bank.”
Sevki Acuner, EBRD Director for Ukraine, said: “We would like to welcome our long-term partner Raiffeisen Bank Aval to the EBRD’s Risk Sharing Facility. I am sure that this project will contribute to the development of SME lending and the growth of the banking sector in the country. It will improve access to finance for Ukrainian companies, upgrade their business practices, and help to share risk among responsible lenders.”
Last month, the European Investment Bank (EIB) also signed an agreement with Raiffeisen Bank Aval, providing €12 million in guarantees for the support of lending to SMEs, also as part of the EU4Business initiative.