EBRD to share up to 50% of Ukrainian PrivatBank's risks on MSME loans totaling 240 mln euros

MOSCOW. Aug 4 (Interfax) - The European Bank for Reconstruction and Development (EBRD) will take on up to 50% of the credit risk on PrivatBank's newly issued loans to micro, small and medium enterprises (MSMEs), totaling up to 240 million euros.

This first cooperation project with the nationalized PrivatBank was approved by the EBRD Board of Directors on July 19, 2023, but the relevant documents have not been signed yet, Ukrainian media said, citing information on the EBRD website.

The project to support newly issued loans consists of two tranches of 120 million euros each, it said. A decision on the second tranche will be adopted later.

The size of the EBRD's guarantees as part of the first tranche is 30 million euros, but the bank also plans to draw a sublimit of 24 million euros under the EU/EBRD SME Competitiveness Program in Eastern Partnership.

In late July, the EBRD signed documents under a similar program with Lvov-based KredoBank, providing a 25-million-euro guarantee facility, which covers 50% of the credit risk of newly originated financing provided by KredoBank up to a total value of 100 million euros, subject to a portfolio cap of 50%. The EBRD then put the overall amount of financing backed by such guarantees since the start of the crisis at 468 million euros.

PrivatBank is fully owned by the state and was the largest systemically important bank in Ukraine with a 23% market share by assets or $15 billion at end-2022. It specializes in servicing retail and MSME clients through a country-wide network of 1,200 branches and 7,300 ATMs.