The European Bank for Reconstruction and Development (EBRD) is extending a local-currency loan worth the equivalent of €20 million to Ukraine’s Bank Lviv, to facilitate access to finance for private small- and medium-sized enterprises affected by Russia’s ongoing war on the country.
Since Russia’s full-scale invasion of Ukraine in February 2022, many Ukrainians have relocated to the western part of the country from other regions, some bringing their businesses with them. The funding will help companies continue their operations and safeguard livelihoods, which is crucial for fostering economic recovery and resilience.
The loan will have a tenor of three years and help Bank Lviv to maintain a sustainable and diversified funding base to provide Ukrainian businesses with much needed access to medium-term finance. The loan’s funding costs will be supported by the interest rate subsidy from the United States’ SME Local Currency Lending Programme in Ukraine.
At least 30 per cent of all the sub-loans financed will support eligible green projects, in line with the EBRD’s Green Economic Transition (GET) approach.
The loan, which was signed at the Ukraine Recovery Conference in Berlin, underscores the collaborative spirit guiding international efforts to bolster Ukraine’s economy. This collaboration between the EBRD, Bank Lviv and the United States exemplifies this unified approach.
Owned by European shareholders, JSC Bank Lviv is one of the fastest-growing banks in the west of Ukraine with 19 branches mostly located in the region as well as its headquarters in the regional capital Lviv. The bank primarily deals with MSMEs and has undergone a major transformation towards sustainable business expansion in its home region, increasing its loan portfolio from €38 million in 2017 to €167 million in the first quarter of 2024.
The EBRD has deployed more than €4.2 billion in Ukraine since the start of the war. EBRD shareholders have recently agreed to provide a €4 billion paid-in capital increase to enable the Bank to continue investing at current levels in wartime, with the potential for more investments when reconstruction starts. As well as supporting the private sector, the EBRD’s strategic priorities in the country include energy security, vital infrastructure, food security and trade.
