Ukrainian business received €1.6 billion from the EU

On March 7, the Steering Committee of the Ukraine Investment Framework announced a call for proposals for indirect lending operations to micro, small and medium-sized enterprises through banks. The competition is aimed at expanding access to finance, in particular for businesses in war-affected regions, as well as companies founded by IDPs, veterans and other groups affected by the war. Additionally, support is provided for demining activities.

The total maximum amount of the competition is EUR 1.6 billion, including EUR 1.4 billion in loan guarantees and another EUR 200 million in grants and technical assistance.

“The new competition for the banking sector under the UIF is an important step in directing investments to the private sector. We aim to create conditions under which small and medium-sized enterprises, which provide about 80% of jobs in Ukraine, will have greater access to the necessary financing. A special emphasis is placed on supporting enterprises operating in the affected regions, employing veterans, internally displaced persons and representatives of vulnerable groups. It is important not only to stabilize the economy, but also to create conditions for its sustainable growth, including through the development of small and medium-sized businesses,” said Yulia Svyrydenko, First Vice Prime Minister of Ukraine and Minister of Economy of Ukraine.

The program helps small and medium-sized businesses obtain financing, reducing risks for banks. As a result, entrepreneurs can get loans with lower collateral requirements, which is especially important for the development of their business.

Key terms of the competition:

  • At least 50% of the funding is for businesses in the affected regions, IDPs, veterans, or those who employ people from these groups.
  • At least 75% of funding is provided for SMEs and 25% for SME+, according to the priorities of the competition
  • Additional support is available for companies engaged in demining.
  • At least 50% of the funds are for capital investments.
  • The more funding is allocated to support vulnerable groups, the higher the level of guarantee coverage a bank can receive.
  • Up to 60% of the grants will be provided for business projects that combine production modernization, energy security and support for enterprises affected by the war.

As part of the announced competition, international financial organizations (IFOs) are currently preparing their proposals for funding. They will then be approved by the European Commission and the Ukrainian government. New funding for Ukrainian businesses is expected to be available in the second half of this year.

At the moment, businesses can contact partner banks to apply for funding, which will become available after the initiatives are approved.

Today, more than 15 partner banks are already operating under the UIF, including PrivatBank, Oschadbank, Ukreximbank, Ukrgasbank, Raiffeisen Bank, Ukrsibbank, Kredobank, and Bank Lviv. The list of banks may be expanded.

For a complete list of partner banks and current SME financing programs under the Ukraine Investment Framework, Ukrainian businesses are encouraged to review the Fundraising Guide, which provides detailed information on available programs from Ukrainian banks in cooperation with international financial institutions.

In addition, the UIF Governing Board approved eight new investment programs to support Ukraine’s economy. They were submitted as part of the first stage of the UIF funding competition, which was announced in September 2024.

“These are projects in strategic sectors for the state, in particular aimed at rebuilding and compensating for destroyed housing, restoring municipal infrastructure, modernizing hospitals, reconstructing power grids, developing renewable energy, transport logistics, and industry. It is very important for us to implement initiatives that are critical for the state, to support business, and to minimize risks for investors through the mechanisms of the Ukraine Investment Framework,” said Oleksiy Sobolev, First Deputy Minister of Economy of Ukraine.

These investment programs will be implemented by partners, in particular:

  • The European Bank for Reconstruction and Development (EBRD),
  • The Council of Europe Development Bank (CEB),
  • Polish Development Bank (BGK),
  • Czech Development Bank (NRB),
  • Slovak Export-Import Bank (Eximbank)
  • The World Bank – the International Bank for Reconstruction and Development (IBRD).

For reference:

The Ukraine Investment Framework (UIF) is an investment mechanism created to support Ukraine’s economic recovery and modernization. Its total budget is EUR 9.3 billion. The main goal of this program is to mobilize investments in the Ukrainian economy to restore, reconstruct and modernize the country. In September 2024, the European Commission announced the first call for proposals under the Ukraine Investment Framework to attract investment in its recovery and development.

*The list of UIF partner banks is expected to expand

 

Source: https://me.gov.ua/