The European Bank for Reconstruction and Development (EBRD) will support the new Ukrainian government’s efforts to tackle major challenges by providing finance to strengthen the country’s banking system, upgrade infrastructure and generally improve the climate for foreign and domestic investors, says a new country strategy published during the bank’s recent annual meeting in Belgrade.

Having successfully come through a difficult political test, Ukraine is now taking important steps towards integrating into the European and world economy. The EBRD, a major investor in the country, having already invested €1.7bn through 67 projects, can play an important role in supporting Ukraine in this process, as follows:

  •  Business climate and competitiveness: The bank will support the private sector by encouraging and sharing risk with foreign direct investors and increasing investment in large local manufacturing, service, property and agribusiness projects. It will also take more equity and extend debt with longer maturities, as well as promote syndications. The EBRD will seek to enhance integrity and corporate governance in local private-sector projects and support environmental and energy efficiency-related projects. It will also look for ways to develop local-currency financing instruments based on the approach used in other countries in the region.


  •  Financial sector: The EBRD will actively support consolidation in the banking sector by providing equity finance, particularly in the context of mergers of domestic banks or market entry by foreign strategic investors. Special attention will be paid to the provision of credit lines for micro and SME finance, mortgage, leasing, energy efficiency and warehouse receipts. The bank also plans to start working with insurance companies and other non-bank financial institutions.


  •  Infrastructure: The bank will support the restructuring and modernisation of Ukraine’s roads, railways, harbours and airports, as well as the power and oil and gas sectors so important for one of the fastest growing economies in the region. It will be done through a combination of sovereign-guaranteed projects that help promote commercialisation, as well as non-sovereign guaranteed projects where appropriate. The EBRD will work with the European Investment Bank (EIB) on certain projects to ensure optimum efficiency and to support implementation by Ukraine of the EU Action Plan. At the same time, the EBRD will seek to extend its support of much-needed municipal infrastructure projects in Ukrainian cities.