On 7 March, the Steering Board of the Ukraine Investment Framework launched a call for proposals for indirect lending operations to micro, small and medium-sized enterprises through banks. The call is aimed at expanding access to finance, in particular for businesses in war-affected regions, as well as companies founded by IDPs, veterans and other groups impacted by the war. In addition, support is provided for demining activities.

The total maximum amount of the call is EUR 1.6 billion, including EUR 1.4 billion in loan guarantees and another EUR 200 million in grants and technical assistance.

“The new call for proposals for the banking sector under the UIF is an important step in channelling investment into the private sector. We aim to create conditions under which small and medium-sized enterprises, which provide about 80% of jobs in Ukraine, will have greater access to the necessary financing. A special emphasis is placed on supporting businesses operating in the affected regions and employing veterans, internally displaced persons and members of vulnerable groups. It is important not only to stabilise the economy, but also to create conditions for its sustainable growth, including through the development of small and medium-sized businesses,” said Yuliia Svyrydenko, First Deputy Prime Minister and Minister of Economy of Ukraine.

The programme helps small and medium-sized businesses to obtain financing, reducing risks for banks. As a result, entrepreneurs can get loans with lower collateral requirements, which is especially important for the development of their business.

Key terms of the call:

• At least 50% of the funding is for businesses in the affected regions, IDPs, veterans or those employing people from these groups.
• At least 75% of the funding is provided for SMEs and 25% for SME+, according to the priorities of the call.
• Additional support is available for demining companies.
• At least 50% of the funds are for capital investments.
• The more funding is allocated to support vulnerable categories, the higher the level of guarantee coverage a bank can receive.
• Up to 60% of the grants will be allocated to business projects that combine production modernisation, energy security and support for enterprises affected by the war.

As part of the announced call, international financial institutions (IFIs) are currently preparing their proposals for funding. They will then be approved by the European Commission and the Government of Ukraine. New funding for Ukrainian businesses is expected to be available in the second half of this year.

Currently, businesses can contact partner banks to apply for funding, which will be available after the submitted initiatives have been approved.

Today, more than 15 partner banks are already working within the UIF, including PrivatBank, Oschadbank, Ukreximbank, Ukrgasbank, Raiffeisen Bank, Ukrsibbank, Kredobank and Bank Lviv. The list of banks may be expanded.

For a full list of partner banks and current SME financing programmes under the Ukraine Investment Framework, Ukrainian businesses are encouraged to review the Practical Handbook, which provides detailed information on available programmes from Ukrainian banks in cooperation with international financial institutions.

In addition, the UIF Steering Board approved eight new investment programmes to support Ukraine’s economy. They were submitted as part of the first stage of the UIF funding call announced in September 2024.

“These are projects in strategic sectors for the state, in particular aimed at rebuilding and compensating for destroyed housing, restoring municipal infrastructure, modernising hospitals, reconstructing power grids, developing renewable energy, transport logistics and industry. It is very important for us to implement initiatives that are critical for the state, to support business, and to minimise risks for investors through the mechanisms of the Ukraine Investment Framework,” said Oleksii Sobolev, First Deputy Minister of Economy.

These investment programmes will be implemented by partners, in particular:

• The European Bank for Reconstruction and Development (EBRD),
• The Council of Europe Development Bank (CEB),
• Polish Development Bank (BGK),
• Czech Development Bank (NRB),
• Slovak Export-Import Bank (Eximbanka)
• The World Bank – the International Bank for Reconstruction and Development (IBRD).

Background

The Ukraine Investment Framework (UIF) is an investment facility established to support Ukraine’s economic recovery and modernisation. Its total budget is EUR 9.3 billion. The main objective of this programme is to mobilise investments in the Ukrainian economy for the country’s recovery, reconstruction and modernisation. In September 2024, the European Commission announced the first call for proposals under the Ukraine Investment Framework to attract investment in its recovery and development.

* The list of UIF partner banks is expected to expand.