Europe

EBRD strikes risk-sharing deal for Ukraine trade finance

Development finance institutions in the UK and France have struck risk participation deals together worth US$57mn for the European Bank for Reconstruction and Development’s (EBRD) trade finance exposure in Ukraine.  

British International Investment and Proparco have agreed to cover US$37mn and US$20mn respectively of the EBRD’s trade facilitation programme (TFP) financing in Ukraine, the EBRD says in a statement.  

Through the TFP, the EBRD provides guarantees for the issuing and confirmation of letters of credit and other documentary credit products, as well as some lending, by commercial banks. 

“The EBRD currently has sufficient limits to support the cross-border activities of its partner banks in Ukraine,” a bank spokesperson tells GTR, but British International Investment and Proparco’s contributions “will further strengthen the EBRD’s capacity to expand these limits in the future”. 

The deals are open-ended framework agreements and operate on a revolving basis, the spokesperson adds. The programme has 12 participating confirming banks and 11 issuing banks in Ukraine, according to the EBRD website.

Proparco chief executive Françoise Lombard says the institution is “proud to partner with the EBRD and British International Investment on this vital initiative”.  

“Strengthening trade finance is crucial – it enables Ukrainian banks to maintain essential trade operations, keeping businesses running and ensuring critical supplies reach those in need,” she says. “[Development finance institutions] stand firmly alongside Ukraine, supporting its journey toward a stronger, more resilient future.” 

Since Russia’s 2022 invasion of Ukraine, multilateral lenders like the EBRD and International Finance Corporation have been crucial to keeping funds flowing to Ukrainian lenders and their trade clients.  

The London-headquartered EBRD says its trade programme “has supported more than €1.4bn in trade transactions for the most crucial goods for the Ukrainian economy since the war began”.