The European Bank for Reconstruction and Development (EBRD) has provided a €25mn line of credit to allow Ukraine’s KredoBank to extend trade finance to customers in the beleaguered country.

KredoBank, which is wholly owned by Polish lender PKO Bank Polski, will use the trade finance facility for guarantees and cash advances, the EBRD says.

The bank’s participation in the EBRD’s trade finance programme is part of a €50mn investment announced on July 26, which also includes a €25mn guarantee facility to share up to 50% of the risk on newly originated financing.

The multilateral development bank says the credit “will equip KredoBank with an important financial instrument which will strengthen its expertise in trade finance and address an increased demand from local businesses to support foreign trade”.

“According to the calculations of PKO Bank Polski, the World Bank and the government of Ukraine, by 2032 Ukraine may need financing of up to US$750bn,” says Andrzej Kopyrski, PKO Bank Polski’s deputy CEO. “That is why this and each subsequent agreement on financial support for the Ukrainian economy is extremely important.”

The EBRD has channelled significant levels of financing to Ukraine since Russia’s February 2022 invasion of the country. In March that year the London-headquartered lender announced a €2bn resilience package and says it provided Ukraine with a total trade finance turnover of €459mn last year.

In June this year the EBRD lent €50mn to Ukreximbank towards financing for corporate clients.