The European Investment Bank (EIB) and the European Investment Fund (EIF) – jointly the EIB Group – today signed a guarantee agreement with Ukrgasbank to support the equivalent of EUR 50 million of lending to small and medium-sized enterprises (SMEs) in Ukraine.

The agreement aims to facilitate access to finance for Ukrainian SMEs by providing a 70% guarantee for each loan granted by Ukrgasbank. Thanks to the guarantee, EUR 50 million of SME loans will be made available at more favourable terms, including reduced collateral requirements.

This guarantee transaction is expected to unlock additional financing for SMEs and ultimately to sustain jobs and new business opportunities in Ukraine. The guarantee is funded by the European Union (EU) through the Neighbourhood Investment Facility under the EU4Business initiative.

The EIB Group has joined forces with the EU to strengthen economic development in the countries that have signed Association Agreements with the EU – namely Georgia, Moldova and Ukraine – by providing financial and technical support targeted at SMEs in these three countries. The EU supports private sector development in the Eastern Partnership countries through its EU4Business initiative by enhancing access to finance for SMEs, improving the business environment and providing advisory services to local businesses.

Ukrgasbank is a state-owned bank in Ukraine with more than 22 years of experience in the Ukrainian banking sector providing both traditional and innovative products and services. The bank serves around 900 000 private and over 46 000 corporate and SME customers. The bank operates through a network of some 230 branches across Ukraine and has a strategic focus on financing clean energy.

Katarina Mathernova, Deputy Director-General in the Directorate-General for Neighbourhood Policy and Enlargement Negotiations of the European Commission said: "SMEs are the cornerstone of the Ukrainian economy. They are in need of increased and better access to affordable and long-term finance in order to continue to grow. Contributing to improved conditions for access to finance is one of our main priorities under the EU4Business initiative. It is about bolstering the economy for the benefit of Ukrainian citizens. I am pleased that today, the EU, including the EIB and EIF, is delivering on this priority."

Christoph Kuhn, Director of the Mandate Management Department at the EIB, stated: “Improving SMEs’ access to long-term finance is crucial for strengthening the position and increasing the competitiveness of this important sector of the Ukraine’s economy. This operation will contribute to the diversification of the national economy and help to raise the proportion of GDP generated by SMEs in Ukraine.”

Maria Leander, Secretary General of the EIF, said: “The signature of this guarantee agreement is an important step for the EIF in supporting the development of the SME segment in Ukraine.”

Kyrylo Shevchenko, Ukrgasbank CEO noted: “We are proud that Ukrgasbank is one of the first financial institutions in Ukraine to sign the guarantee facility agreement under the EU4Business initiative. We are confident that this guarantee facility is an appropriate instrument to stimulate lending to SMEs that contribute to a more diversified and open economic structure, and act as an engine for employment generation. Given the green focus of Ukrgasbank first of all we see application of this facility to renewable energy projects that more often than not, have insufficient collateral coverage”.