The EBRD is lending €20 million to a leading Ukrainian pharmaceuticals manufacturer, JSC Farmak, under its €2 billion Resilience and Livelihoods Framework supporting countries affected by the war on Ukraine.
The financing, which will provide working capital to a manufacturer with a 5.7 per cent pre-war share of Ukraine’s pharmaceuticals market, will support production and improve access to essential medicines for people living in Ukraine.
Supporting the pharmaceutical sector during the war on Ukraine is a key element of Bank’s five-pronged support plan for the real economy of Ukraine and the surrounding region. The EBRD is also supporting trade, energy security, vital infrastructure and food security.
Like all projects under the Framework, the EBRD will share risk with partners.
A first loss guarantee of 44.5 per cent is expected to be provided through the EU-EBRD Municipal, Infrastructure and Industrial Resilience Guarantee Programme, which is funded by the European Union under its European Fund for Sustainable Development (EFSD). Through this programme, the European Commission primarily engages in the energy transition of countries in the European Neighbourhood South and European Neighbourhood East by supporting energy efficiency and green technologies investments to support decarbonisation paths and the accomplishment of sustainable development goals. Additionally, it also supports borrowers which have been negatively impacted by either the COVID-19 pandemic or, more recently, the military conflict in Ukraine.
In addition, a first loss risk guarantee of 5.5 per cent will be provided through the EBRD’s Shareholder Special Fund Risk Sharing Programme. On the basis of both guarantees, total donor guarantee will cover 50% of the loan amount.
The EBRD was swift to condemn the Russian invasion of Ukraine on 24 February and pledged to stand by Ukraine. In early April, the EBRD’s Board of Governors voted to suspend open-endedly the access of Russia and Belarus to EBRD finance and expertise, and the Bank is closing its offices in Russia and Belarus.
As well as a resilience package for Ukraine and neighbouring countries affected by the war, the EBRD has pledged to help finance Ukraine’s reconstruction once conditions permit.