Programmes

The EBRD DCFTA Programme assists the development of the SME sector and its capacity to take advantage of DCFTA opportunities through a variety of investments supported by grant funding from the EU for risk mitigation, investment incentives to SMEs and technical assistance.

Objectives

The overall purpose of the Programme is to support DCFTA-related priority improvements in SMEs operating in Georgia, Moldova and Ukraine following the signing of the Association Agreements in 2014. Specifically, to increase the number of investments that enable SMEs to respond to challenges and opportunities created by the DCFTA, improve the availability and terms of long term-funding for businesses in the three beneficiary countries and facilitate cross-border trade operations. 

Beneficiaries

Local financial intermediaries and SMEs in Georgia, Moldova and Ukraine

Activities

The EBRD DCFTA Programme consists of four main sections:

• Facilitating DCFTA-related investment through enhanced SME access to finance, including:
  
  • Credit lines to PFIs for on-lending to SMEs with fewer than 500 employees;
  • Incentive payments to SMEs drawing new debt financing from PFIs for long-term DCFTA investments (specifically, investment for purchase of specific approved technologies required under the DCFTAs; investment in sectors related to either export or import substitution under the DCFTAs; investment for compliance with AA/DCFTA priority EU Directives);
  • Local currency interest rate subsidy in Ukraine for on-lending to SMEs.
• Enhancing short- and medium-term trade finance for businesses via local financial intermediaries to facilitate cross-border trade and domestic distribution operations – Technical assistance is provided to enhance the capacity of PFIs in trade finance, with a particular focus on serving SMEs in areas linked to DCFTAs. Activities (including training, advisory services, trade finance industry events and e-learning) promote and implement best practices, prudent banking principles and regulations, advanced trade finance banking know-how, in-depth understanding of legal issues associated with trade, integration of participating entities into the international trade finance community including through networking events, and serving the needs of SMEs involved in trade.
• Business advice for SMEs to enhance their technical, managerial, market knowledge and investment project development capacity (activities under this section are not financed by the Action, but are financed by the EU under the Advice for Small Business programme);
• Policy dialogue to improve the domestic operating environment for SMEs (The activities under this section are financed under Phase 1 of the Programme – EU4Business EBRD Credit Line).

Results

By the end of the project, the following results should have been achieved:

• 7 PFIs will be involved in extending sub-loans to SMEs
• 12 PFIs will be involved in providing trade finance instruments
• €600 million in new trade facilitation financing
• 400 sub-loans to SMEs or investments implemented by SMEs for DCFTA purpose
• €113 million in new financing extended to SMEs
• 16,000 estimated jobs sustained
• 900 trade transactions supported