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The European Bank for Reconstruction and Development (EBRD) is extending its support for Ukraine by establishing an unfunded portfolio risk-sharing facility with OTP Leasing. This move aims to facilitate €80 million in new leasing finance for businesses across Ukraine, continuing operations amidst the ongoing conflict with Russia.
The EBRD will share up to 50% of the credit risk associated with new leasing agreements valued at €80 million. This arrangement allows OTP Leasing to extend financial services to key sectors like agribusiness, manufacturing, and transport and logistics.
By doing so, it plays a crucial role in maintaining company operations and ensuring the availability of essential goods, which are key to preserving livelihoods in the region.
Since the commencement of the conflict in Ukraine, similar EBRD initiatives have mobilised nearly €900 million in financing as of the end of 2023.
The current agreement builds on a partnership initiated in 2022 aimed at reinforcing Ukrainian businesses. It includes a specific programme designed to boost the competitiveness of Micro, Small, and Medium-sized Enterprises (MSMEs) in countries part of the EU’s Eastern Partnership.
A significant portion of the risk-shared loans, up to 27.5%, will back private MSMEs investing in EU-compliant and sustainable technologies, thereby enhancing their market position both locally and internationally. These sub-borrowers will also benefit from EU-funded technical support and investment incentives after completing their projects, under the EU4Business initiative.
Support for the EBRD facility includes first-loss risk coverage funded by the United States through the EBRD Crisis Response Special Fund. Contributors to this fund include major global economies such as the United States, France, Canada, Italy, Japan, Norway, Switzerland, the United Kingdom, Germany, the Netherlands, and Denmark, all part of the Bank’s resilience package arrangements.
OTP Leasing, a subsidiary of OTP Bank Plc and established in 2008, leads the market in Ukraine in leasing finance, operating leases, and fleet management services. By the end of 2023, it held a 41% share of the country’s leasing portfolio.
The EBRD has committed over €4.1 billion in Ukraine since Russia’s escalation of the conflict in February 2022, continuing its support for the private sector and infrastructure development.
