Ukraine: EIB supports early recovery and SME sector with EUR 600 million
- Dec 22, 2014
The European Investment Bank’s (EIB) agreed to provide two loans under the Bank’s 2014-2016 EUR 3 billion lending plan to Ukraine: EUR 200 million to finance early recovery of small-scale damaged infrastructure in order to cope with the consequences of the conflict ravaging parts of East Ukraine; EUR 400 million in support of projects promoted by SMEs and midcaps.
The European Investment Bank’s (EIB) agreed to provide two loans under the Bank’s 2014-2016 EUR 3 billion lending plan to Ukraine:
- EUR 200 million to finance early recovery of small-scale damaged infrastructure in order to cope with the consequences of the conflict ravaging parts of East Ukraine
- EUR 400 million in support of projects promoted by SMEs and midcaps
The Ukraine Early Recovery loan focuses on investments in the Ukraine Government-controlled Donetsk and Luhansk Regions and the surrounding areas of Kharkiv, Dnipropetrovsk and Zaporizhzhia. It will back undertakings to re-establish and improve public service delivery of water and sanitation, electricity, and heating. It also covers repairs to roads and railways and the reconstruction of destroyed bridges and the refurbishment of damaged public buildings, including administrative buildings, schools, health centres and hospitals, postal services, and other social infrastructure.
EIB funds will also help municipalities in regions that are accommodating a significant influx of internally displaced persons to better cope with the increased pressure on social infrastructure and shelter capacity.
The loan supporting investments by SMEs and midcaps is intended to address the scarcity of long-term funding in the private sector in Ukraine which has been aggravated by the current political and economic unrest. This is in line with the objectives of the EIB External Lending Mandate, which includes local private sector development, and in particular support to SMEs. This operation also covers the objectives set out by the Association Agreement and DCFTA agreement signed by the Ukrainian Government with the EU, aimed at establishing conditions for enhanced economic and trade relations between the Union and Ukraine.
EIB Vice-President László Baranyay commented: “The recovery of Ukraine and its economy is vital to improving the living conditions of Ukrainian citizens and to supporting the country as it deals with the consequences of the present difficult situation. With the loans signed today, EIB lending in 2014 in Ukraine has reached almost EUR 1 billion as part of the EUR 3 billion lending package scheduled for 2014-2016.”
The EIB’s lending commitment in Ukraine has reached a total of EUR 3.1 billion since the start of EIB operations in Ukraine in 2007. Earlier this year the EIB signed loans to finance the upgrade of gas transmission infrastructure along the Urengoy-Pomary-Uzhgorod pipeline (EUR 150 million), the improvement of the storage and food-processing infrastructure of the MHP Group (EUR 85 million) and LLC Firma Astarta (EUR 50 million), and the extension of the Beskyd Railway Tunnel (EUR 55 million).
Both EIB loan operations signed today are secured by the EU comprehensive guarantee under the EIB’s 2014-2020 external lending mandate.