The European Bank for Reconstruction and Development (EBRD) will provide ProCredit Bank Ukraine with a €60mn portfolio risk guarantee, enabling the lender to issue up to €200mn in new loans to small and medium-sized enterprises, reported Ukraine Business News.

The unfunded guarantee will partially cover ProCredit’s credit risk on fresh lending to private businesses, including companies founded by military veterans. The financing will target firms in sectors considered critical to Ukraine’s wartime economy, such as agriculture, manufacturing, trade, transport and logistics.

The EBRD said it was the largest guarantee extended to ProCredit Bank Ukraine since thew war began in 2022. The support comes as Ukrainian businesses face persistent liquidity constraints, supply-chain disruptions and elevated borrowing costs.

Around 20% of the sub-loans issued under the guarantee will support long-term investments in EU-compatible green technologies aimed at raising competitiveness and reducing energy intensity. Borrowers will also be eligible for technical assistance and investment grants funded by the EU through its EU4Business initiative once their projects are completed.

The guarantee falls under the EU-backed Ukraine Investment Framework, under which EBRD guarantees partially offset the EU’s first-loss exposure. The EBRD said it has channelled nearly €3.29bn in financing to Ukrainian clients since the start of the war, working through 40 instruments and 12 partner institutions. The EU has already allocated €75.4mn in grant funding to Ukrainian SMEs under the EU4Business–EBRD programme.