EBRD and EU commit fresh funds to support Ukrainian businesses
20.03.2020 14:26 "Agro Perspectiva" (Kyiv) —
Long-term leases through LLC OTP Leasing will stimulate continuous activity
• EBRD four-year EUR15 million loan to OTP Leasing Ukraine
• Long-term local currency lending to support Ukrainian SMEs
• Project supported by the EU with incentive grants under EU4Business initiative
The EBRD and Ukraine’s leading leasing company LLC «OTP Leasing» (OTPL) are helping domestic small and medium-sized enterprises (SMEs) continue their business activities despite the current market turmoil caused by the outbreak of the coronavirus (COVID-19) infection. A 4-year EBRD senior loan of up to EUR15 million to OTPL will facilitate long-term leases to SMEs across the country. The funding will be available under the EU4Business-EBRD Credit Line provided in the context of the Deep and Comprehensive Free Trade Agreement (DCFTA) between the European Union (EU) and Ukraine.
Following the decision of the EBRD Board of Directors to provide an emergency aid package for its clients in all countries, including Ukraine, the Bank is not only remaining open for business but also stands ready to increase the scope of its assistance should this be required.
The financing to OTPL clients will be available in both Ukrainian Hryvnia and/or Euro. Lending in Ukrainian Hryvna will protect borrowers from foreign currency-related risks and offer long maturities.
In addition, the EU will provide grants as investment incentives to eligible enterprises to reduce the cost of their capital expenditure on upgrades of technology and production processes in line with EU standards and regulations.
EBRD Managing Director for Eastern Europe and the Caucasus Matteo Patrone said: «The deal we signed with our partners from OTP Leasing Ukraine shows that we are planning the development of business beyond today. We are particularly grateful to the EU for the continuous commitment to our common goals in difficult times. Private and public sectors clients, including SMEs, can fully rely on our support and flexibility. Our objective is to maintain the record volume of business we had in 2019 and apply our resources in the areas where they are required most.»
OTP Leasing CEO Andrey Pavlushyn said: «We are very glad to have signed 4 transactions with the EBRD for the amount of EUR52 million. Today’s deal will help us finance at least 100 local businesses across the country. This is also an opportunity for us to further increase our SME market share and diversify our lease portfolio.»
OTP Leasing, a limited liability company incorporated in Ukraine and owned by OTP Bank PLC of Hungary, has been a well-established market player in Ukraine for more than a decade. The latest EBRD loan will allow OTP Leasing to increase the terms of leases it offers and provide them in local currency.
The EBRD is a leading institutional investor in Ukraine and to date has committed more than EUR14.54 billion in over 460 projects to the country.