EBRD backs OTP Leasing to boost SME financing in Ukraine

By bne IntelliNews May 3, 2024

The European Bank for Reconstruction and Development (EBRD) has stepped in to bolster financing for small and medium-sized enterprises (SMEs) in Ukraine, providing a guarantee to OTP Leasing to the tune of €80mn, according to Ukraine Business News.

Under the terms of the agreement, the EBRD guarantee will cover 50% of OTP Leasing’s new subleasing contracts, aimed at supporting Ukrainian enterprises, particularly those operating in primary and secondary agricultural sectors, as well as key industries like food production, retail, and logistics.

The financing will be provided in two tranches of €40mn each, with the first tranche already confirmed. This initiative aims to enhance access to funding for Ukrainian businesses, particularly for long-term capital investments aimed at modernising technologies and equipment to meet EU standards, including investments in green technologies.

Approximately 70% of the sub-limit will be directed towards financing such long-term capital investments, thereby facilitating the modernisation and sustainability of Ukrainian enterprises.

Moreover, sub-borrowers will benefit from EU-funded technical assistance and grant support as incentives for their investment projects upon completion.

OTP Leasing, a Ukrainian company established in 2008 and part of the European financial OTP Group, will play a pivotal role in implementing this initiative. By 2023, OTP Leasing had already captured approximately 41% of the market by the volume of its leasing portfolio, amounting to $268mn.

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