π Tender Overview
Location:
Ukraine
Project number:
55977
Business sector:
Financial institutions
Notice type:
Private
Approval date:
26 Feb 2025
Status:
Exploratory
English-language PSD published:
20 Jan 2025
Project Description
A EUR 52 million 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-leases with the total value of EUR 160 million equivalent (the "Covered Portfolio") to be originated by OTP Leasing, LLC ("OTPL", the "PFI") in Ukraine.
The facility will be provided in two equal tranches with EUR 26M of EBRD's guarantee to cover EUR 80M of the Covered Portfolio each; Tranche B is provided on an uncommitted basis.
Up to EUR 48 million of risk shared sub-leases will finance SMEs' long-term investments under the EU4Business-EBRD Credit Line with Incentives (within a dedicated sub-limit assigned with a separate EBRD project number 55978). This will enable financing of long-term capital investments of SMEs to upgrade their technologies and equipment to EU standards, including investments in sustainable and green technologies (at least 70% of the sub-limit), thereby enhancing their competitiveness. Eligible sub-borrowers will also receive technical assistance funded by the EU and grant support in the form of investment incentives upon the completion of their investment projects.
Project Objectives
The Facility will support lending to Ukrainian 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 OTPL 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 with a specific focus on severely affected vulnerable groups, such as war veterans, internally displaced persons, refugees, and other impacted communities. Providing war-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 the Competitive quality (via SMECI sub-limit) by improving SMEs' technology investment