📋 Tender Overview
Location: Ukraine
Project number: 55094
Business sector: Financial institutions
Notice type: Private
Environmental category: FI
EBRD Finance Summary: EUR 30,000,000
Total Project Cost: EUR 120,000,000
Project Description
A Resilience and Livelihoods Guarantee ("RLG"), under the Resilience and Livelihoods Framework, in the form of an unfunded portfolio risk-sharing facility covering up to 50 per cent of the credit risk in sub-loans with the total value of EUR 120 million equivalent (the "Covered Portfolio") to be originated by JSC OTP Bank ("OTPU", the "PFI") in Ukraine.
The Project will be delivered in two equal tranches each including EUR 15 million of EBRD's guarantee to cover EUR 60 million of the Covered Portfolio with Tranche B being uncommitted.
The Project will include a sub-limit under the SME Competitiveness Programme in the European Union's (EU) Eastern Partnership ("EaP SMEC" sub-limit, assigned with a separate EBRD project number 55095) of up to €18 million or 15% of the Covered Portfolio to finance long term capital investments of micro-, small-, and medium sized enterprises ("MSMEs") to upgrade their technologies and equipment to EU standards, including investments in sustainable and green technologies (at least 70% of EaP SMEC sub-limit), thereby enhancing businesses' competitiveness. Eligible sub-borrowers will also receive EU funded technical assistance and grant support in the form of investment incentives upon the completion of their investment projects.
Project Objectives
The Facility will be used to support lending to Ukrainian private companies operating in the primary and secondary agriculture and other critical industries (inter alia food processing, retail, logistics), with the ultimate goal of preserving livelihoods in Ukraine.
Transition Impact
The Facility will support the Resilient, Inclusive and Competitive TI qualities.
The Resilient quality stems from credit enhancement mechanism provided by the RLG, which enables OTPU to finance Ukrainian agricultural value chains and other critical industries and to preserve food and energy security, maintain consumption and access to critical goods as a vital step in safeguarding people's livelihoods and to reduce losses due to supply chain disruptions.
The Facility will also support the Inclusive quality by providing funding to the Ukrainian businesses affected by the war, aimed at safeguarding their human and organisational capital. Providing affected businesses with financing will enable them to remain operational, may potentially limit staff shrinkages, and will allow entrepreneurs to preserve their organisational capital, i.e., the know-how needed to create systems of production combining human skills and physical capital.
The Facility also contributes to a Competitive quality (via EaP SMEC sub-limit) by improving MSME investments in line with EU standards, enhancing their competitiveness in domestic and export markets.
