On Monday, January 25, a loan agreement was concluded between the Ministry of Finance, IFC, a member of the World Bank Group, and Ukrgasbank with the possibility of converting credit funds into the authorized capital of the bank.
The President of Ukraine Volodymyr Zelenskyy stressed that the reform of the public banking sector is one of the key prerequisites for strengthening the stability of Ukraine's financial system and increasing its credit and investment potential.
"We remain committed to our goal of creating a reliable and competitive banking system that is largely privately owned and will allow public sector banks to become effective market participants," said the President of Ukraine.
According to Prime Minister Denys Shmyhal, the signed agreement is a model of successful reform of the public banking sector.
"For the first time, an efficient Ukrainian state-run bank will get an international partner. This is the best indicator for increasing confidence on the part of international investors. I believe that the partnership with IFC will accelerate the introduction of the world's best practices in banking governance," said the Prime Minister.
IFC will provide a EUR 30 million loan, which will create the conditions for the transformation of the bank. Thus, Ukrgasbank will become the first privatized major state-owned bank in Ukraine.
According to the Minister of Finance Serhii Marchenko, the withdrawal of the state from the capital of Ukrgasbank is among the objectives of his Ministry in the implementation of the strategy of reforming the public banking sector.
"Today, we have taken one of the key steps to achieve this goal. In addition, the implementation of this transaction is a fulfillment of one of Ukraine’s commitments under the joint Stand-by Arrangement with the IMF. It will also be a strong signal to all investors that the country meets its commitments to reform Ukraine’s banking sector and build a sustainable banking model based on world best practices," Finance Minister Serhii Marchenko said during the trilateral agreement signing ceremony.
The Governor of the National Bank of Ukraine Kyrylo Shevchenko noted that the conclusion of this agreement is a step towards increasing competition and investment attractiveness of Ukrainian banks.
"Our joint mission with the Government for the coming years is to further implement best corporate governance practices. This, in turn, will allow to increase the investment attractiveness of our state-owned banks and create an opportunity for quality investors to enter into their capital. And I am sure we will succeed in this matter," said Kyrylo Shevchenko.
Interim Managing Director and Executive Vice President of IFC Stephanie von Friedeburg, for her part, stressed that for several years IFC has supported the aspirations of Ukrgasbank, helping it to set the tone in the sector focused on green finance.
"Now it will be an example for other state-owned banks that are planned to privatize. This investment is a core stage of our partnership, which paves the way for a green future for Ukraine," said Stephanie von Friedeburg.
The IFC loan will help Ukraine achieve energy efficiency in various sectors of the economy, as well as increase renewable energy sources in the energy balance.