The UK development finance institution British International Investment (BII) has announced plans to provide a risk sharing agreement of up to £30mn to Ukraine via the European Bank for Reconstruction and Development’s (EBRD) Trade Facilitation Programme.

BII tells GTR that the agreement is “is focused on several eligible Ukrainian issuing banks” and will run for three years, after which it will be reviewed.

It is expected to support trade in an array of goods including agricultural goods and food commodities, clothing, metal equipment, chemicals, construction and industrial equipment and household goods. BII notes it will not finance fossil fuel products.

The development finance institution says in a press release that “BII’s main focus is to support Ukrainian trade finance needs in this current time of crisis”. This agreement forms part of the UK government’s additional £250mn allocation to the BII to support Ukraine’s reconstruction, announced last year. BII says it will only invest alongside partners such as the EBRD that have “long-standing and strong experience investing in Ukraine”.

“We warmly welcome BII to this cooperation on our trade finance work by development finance institutions,” says Francis Malige, managing director of financial institutions at the EBRD.

“Such collaborations are a key element in our financing for Ukraine, increasing the scale, efficiency, and quality of recovery efforts.”

The BII says the EBRD’s programme is particularly important as foreign commercial banks are “reducing their risk exposure on Ukrainian trade finance transactions”.

It is one of many trade-focused deals providing support for Ukraine since the war began which have sought to fill part of the commercial financing gap that opened up after Russia’s February 2022 invasion.

Last year the EBRD arranged a €50mn loan to Ukraine’s export-import bank, Ukreximbank, to expand its lending capacity, as well as extending a €25mn credit line to expand KredoBank’s trade financing in the country.

The UK also provides a £3.5bn credit line for UK exports to Ukraine via its export credit agency, which was amended in July to allow for the purchase of military goods and services.

Separately, the EU launched an export credit facility for Ukraine last month, with an initial pilot of €300mn.