EBRD, EU provide fresh funds for Ukrainian MSMEs via ProCredit Bank

EBRD, EU provide fresh funds for Ukrainian MSMEs via ProCredit Bank

  • EBRD €25 million equivalent loan to boost ProCredit Bank’s lending to Ukrainian small businesses
  • Funds available in local and foreign currency
  • Green technology is focus of new credit line

The European Bank for Reconstruction and Development (EBRD) is providing a loan equivalent to €25 million, available in hryvnia or in euros, to ProCredit Bank for on-lending to micro, small and medium-sized enterprises (MSMEs) in Ukraine. At least 70 per cent of the funds will be dedicated to financing green technology.

Sub-borrowers will be able to invest in equipment, machinery and technology that meets European Union (EU) standards for product quality, health and safety measures as well as environmental protection. The EU provides funding to identify the most suitable equipment and technology as well as for investment incentives covering up to 15 per cent of the cost of eligible technologies upon their successful implementation.

The funding is available under the EU4Business-EBRD credit line , which aims to increase the capacity of small businesses in Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine to access and compete in the EU market.

The loan agreement was signed by Francis Malige, EBRD Managing Director for Financial Institutions, and Viktor Ponomarenko, General Manager of ProCredit Bank, on the sidelines of the EBRD 2021 Annual Meeting and Business Forum.

ProCredit Bank is a market leader in financing local MSMEs in Ukraine. The bank is a 100 per cent-owned subsidiary of ProCredit Holding, based in Germany.

The EBRD is a leading institutional investor in Ukraine. In the past two years alone, the Bank committed €2 billion to the economy. Financing smaller businesses directly and via financial institutions is a particular focus of the EBRD’s work in Ukraine. The investments are combined with support for policies that promote the fight against corruption, good governance of state-owned enterprises, structural reforms and a more transparent business environment.

EBRD, EU support Ukrainian berry producer Amethyst Ole

EBRD, EU support Ukrainian berry producer Amethyst Ole

Ukrainian king of antioxidants for European markets

Can you imagine an organic food product that could boost the health of your heart and overall immune system, is an excellent source of dietary fibre, vitamin C and vitamin K and contains a large number of antioxidants?It sounds too good to be true, but this is not the Elixir of Life. You can easily find this “superfood” product in your local market or nearest superstore!

Lowbush blueberries, also known as wild blueberries, were discovered 13,000 years ago and harvested by Native Americans, but the first highbush was developed and cultivated only around 120 years ago. Frederick Coville, an American botanist, was the first to start experimenting with wild berries, searching for the right plants to cultivate. The first commercial crop of highbush blueberries was sold in 1916. Little did Mr Coville know that, less than a century later, blueberry production would reach 45 million kilogrammes per year in the United States of America alone, and the berries would be shipped to South America, Australia, New Zealand, Japan, Europe and almost every remote corner of the world.

In Ukraine, Amethyst Ole supplies local and international berry lovers with blueberries, the ultimate “superfood” organic product. The European Bank for Reconstruction and Development (EBRD) and the European Union (EU) have helped the company to upgrade its production and boost exports.

Paving a path to export goods from micro farmers

Amethyst Ole is located in the picturesque village of Rudnya Bystra in northern Ukraine. It procures and processes wild berries – blueberries in particular. Local businesses and micro-farmers in the Zhytomyr, Khmelnytsk, Rivne and Volyn regions harvest wild berries and bring them to designated collection points scattered around various villages. By midnight, Ole picks up the berries and takes them to the production site. Every batch is processed within four hours of arrival. This ensures that the berries remain fresh and retain their healthy properties.

“When we started in 2011, we already had extensive experience of retailing berries, but with Ole we wanted to concentrate on quality over quantity and, even more importantly, create jobs for locals and give farmers an opportunity to have their goods sold outside Ukraine. With blueberry exports on the rise, we ship to Poland, Italy, France, the Netherlands, Germany, Austria, Belgium and many other countries,” says Vasyl Chamor, Ole’s Chief Operating Officer.

Freshly picked berries are unloaded in a cooling corridor at -5℃ and then stored in a freezer room at -22 to -25℃ before reaching the processing line. First, a spiral conveyor fans the berries and separates off the leaves, gravel and any other waste. The blueberries are then automatically sorted according to size before reaching the electronic cleaning machine. This state-of-the-art
machine, is a custom-built photographic berry separator, has 16-colour video cameras that allow a 360-degree view of the processed berries.

“This machine is necessary to ensure that only top-quality berries reach the final physical quality check and inspection line before being packed and shipped,” Vasyl explains.

After a final quality check, the blueberries are electronically weighed and packed. Every package goes through a metal detector and is checked for radiation levels. In addition, every batch of berries undergoes regular spot checks for harmful particles.

“We take consumer safety very seriously. Our goal is to ensure that our processing machinery and methods meet the high standards set by the EU. That is why we have all our equipment and processes certified. This includes all relevant certifications for ISO, organic and natural product processing and hazard analysis standards,” Vasyl adds.

Lastly, the company stores the packed blueberries in freezing chambers at approximately -35℃ until they are shipped to customers.

The processes at Amethyst Ole show that the company is a well-oiled machine, reaping the benefits of evolving technology that streamlines the workflow and makes it more efficient. The EU4Business-EBRD credit line helped the berry processor to upgrade machinery and purchase crate-washing equipment, as the company was able to take out a loan through local partner institution Bank Lviv.

Boosting the private sector

Amethyst Ole is just one of the 470 Ukrainian businesses that have benefited from EBRD-EU4Business credit line funds.

Small and medium-sized businesses are vital for sustainable economic development in any country. For agriculturally focused countries like Ukraine, it remains challenging to access technologies and meet industry standards, especially for businesses that are located outside big cities and regional centres.

Through partner banks, the EBRD and the EU support firms in Ukraine and other Eastern Partnership countries with finance and grant incentives to meet international standards and
regulations. This unlocks new opportunities and markets for SMEs, boosts export volumes and builds better economies in the long run.

Private Enterprise ‘Rusynska Miasna Company’ (RMC)

Private Enterprise ‘Rusynska Miasna Company’ (RMC)

The core business activity of the RMC is pig breeding. Despite the COVID pandemic, the five employees of the company are safe and healthy.  Keeping the required social distance is not hard in this type of business and additional measures, such as the introduction of personal protection measures, ensured that employees and management were also largely unaffected by COVID-19 during meetings and personal interactions.

At the end of 2020, the situation on the pork market in Ukraine, as well as around the world, was unstable and unpredictable. However, in the spring and summer months of 2020, Ukrainian pig farmers were in a better situation than their counterparts in the EU, since abroad many slaughterhouses were closed due to outbreaks of coronavirus among workers, resulting in disruptions in the supply chain and the industry in Europe.

RMC’s management is optimistic and confident about its future as local food supply has become more system relevant than ever during the pandemic and meat is always in high demand in Ukraine. Although cafes and restaurants are closed, consumption is growing slowly but steadily. To support the growth in the domestic and export markets, RMC already invested in a Semi-Trailer at the end of 2019, just before the onset of the COVID-19 pandemic and invested in the purchase of equipment for farming and fattening of pigs in February 2021. The last investment project was verified in March 2021. The grant payments on both projects certainly helped the company to make additional investments into the realisations of its growth targets as well as in protecting workers under the new conditions.

1st Loan – Financed by OPTL in December 2019

Loan Amount

€ 92,213

Grant Amount

€ 9,221

Invested in:

Semi-Trailer

2nd Loan – Financed by Bank Lviv in September 2020

Loan Amount

€ 250,837

Grant Amount

€ 25,084

Invested in:

Feeding and drinking systems, ventilation system, drug dispenser for drinking systems, boar box, feed silos

Khrystyna’ Limited Liability Company

Khrystyna’ Limited Liability Company

Located in Berezhany (approximately 90km from Lviv) the company ‘Khrystyna’ produces corrugated cardboard and products made from corrugated paper cardboard and from wastepaper.  The company recently purchased a new paper lamination machine with printing and cutting capability. The project was verified in March 2021.

With the onset of the COVID pandemic in early 2020, the company immediately introduced all sanitary measures to protect its 55 employees and organised the production processes in a way to minimize physical contacts between employees. Even though the company did not suffer any direct negative impact of COVID-19 on its business activities, structural problems in the sector, which seriously affected the paper industry at a global level, were also felt by Khrystyna LLC. Due to the quarantines and lockdowns introduced in Ukraine and other European countries, wastepaper collection was disrupted and the price for wastepaper tripled. The shortages in wastepaper supply practically led to a collapse of the domestic wastepaper supply market. With the new machine, which was financed through a EU4Business-EBRD Credit Line loan and the 10% grant received after the successful verification of the project, the company has been able to focus its production on corrugated cardboard until the situation of the recyclable materials market returns to normal. The project was financed by Bank Lviv.

Loan Amount

€ 13,237

Grant Amount

€ 1,324

Invested in:

Lamination Machine

Ardenz Boiler Equipment Plant

Ardenz Boiler Equipment Plant

The company ARDENZ is a Ukrainian manufacturer of steam boilers, metal tanks, reservoirs and containers.  More than a hundred years old, the company has experienced many ups and downs in its long history. Around 10 years ago, it was even questionable if it could continue its production or if it would finally have to shut its doors forever. With dedication and courage, the new owners managed to turn around the company and make it into the success story that it is today. From near closure to 65 employees, significant capacity expansion and a firm eye on ambitious export targets for the next years, the company has firmly reclaimed its place in its market segment and is expected to become an international player to be reckoned with.  Part of the recent expansion included the purchase of a modern laser cutting machine, financed through a EU4Business-EBRD Credit Line loan that was disbursed by ‘OTP Leasing’ LLC. Despite COVID-19 restrictions, the project was successfully verified in January 2021.

Similar to most of the other countries, the infection rates in Ukraine were somewhat higher in the winter than in the summer season. Even though some staff of Ardenz did get infected, despite personal protection measures implemented, the winter tends to be low season for the production of boilers and the effect on the business was minimal.  Furthermore, the company had organized its production processes to the extent where staff became interchangeable early on in the pandemic, further minimizing any effects on production in case of quarantined staff or COVID-related sick leave.

With continuous improvement in production, business development but also with the ongoing adaptations to operate successfully under the conditions imposed by the pandemic, the future of the company looks promising and the management will explore the possibility of reapplying for another EU4Business-EBRD Credit Line loan.

 

Loan Amount

€ 270,126

Grant Amount

€ 27,013

Invested in:

Laser cutting machine

Primary Energy Savings

106 kWh/year

Material Saving

146 tonnes/year t

GHG Savings

17 kgCO2/year

Energy Saving Ratio

35%

EBRD and EU support small businesses in Ukraine via Crédit Agricole

EBRD and EU support small businesses in Ukraine via Crédit Agricole

22 Apr 2021

The European Bank for Reconstruction and Development (EBRD) is providing a loan of €25 million to Crédit Agricole Bank Ukraine to increase the competitiveness of micro, small and medium-sized enterprises (MSMEs) in the country. The loan is backed by grant funding from the European Union under its EU4Business initiative.

The new financing will enable the bank to expand its leasing solutions, in Ukrainian hryvnia, to MSMEs, so that these firms can invest in upgrades of machinery, equipment and technologies that comply with EU product quality, health and safety, and environmental protection standards. The lender aims to dedicate at least 70 per cent of the loan to financing green technologies, in line with the EBRD’s Green Economy Transition (GET) approach.

In addition to long-term financing, lessees will receive grant support, funded by the EU, in the form of investment incentives on completion of their upgrade projects.

The funding is available under the EU4Business-EBRD Credit Line (https://eu4business.eu/projects/) ‒ a joint initiative by the EBRD and EU to help companies bring their products and services in line with EU standards, foster workplace health and safety, and advance green practices.

    • EBRD €25 million loan to boost Crédit Agricole’s leasing operations in Ukraine
    • Bank makes more climate finance available for local micro- and small businesses
    • Leasing opportunities backed by EU grants

The programme is also available in Georgia and Moldova, and recently extended to other Eastern Partnership countries to make economies greener, more competitive and more sustainable.

Alexander Pavlov, Deputy Director for Ukraine, Financial Institutions, said: “Access to finance and technology is crucial for sustainable growth of Ukrainian private sector and MSMEs in particular. Leasing is an important alternative way of financing SMEs and we are pleased to increase our support to development of leasing solutions through strong and reliable financial sector partners such as Crédit Agricole.”

Crédit Agricole has been operating in Ukraine (https://www.ebrd.com/ukraine.html) since 1993 and provides a full range of banking services there. In particular, it is a leader in car leasing and a strategic partner to agribusinesses.

Carlos de Cordoue, the CEO of Crédit Agricole, said: “Crédit Agricole is a reliable, long-term partner of the EBRD and I embrace this new stage of our cooperation. By joining efforts, we are supporting businesses to upgrade their machinery fleets, improve competitiveness in the domestic market and grow exports. For that, Crédit Agricole has an effective tool: financial leasing which is becoming more and more popular among our clients. And now, thanks to this programme, leasing of the machinery is even more affordable and financially favourable.”

Ukraine is a top three investment destination for the EBRD. In the past two years alone, the Bank has committed €2 billion to the economy. Financing smaller businesses directly and through financial institutions is a particular focus of the EBRD’s work in Ukraine.

The EBRD also finances infrastructure, energy efficiency and energy security, agricultural and industrial projects. The investments are combined with support for policies that promote the fight against corruption, good governance of state and a more transparent business environment.

Improving animal welfare in pig farming

Improving animal welfare in pig farming

Zootechnologia LLC, a Ukrainian enterprise without foreign investments, is situated in the Kherson region. The farm started its work in 2005 by buying two pig complexes in Novoraysk village, Beryslav district (there is a sow unit now) and Vinogradovo village, Tsurupynsk district (a finishing unit) in the Kherson region. The basis of the reproductive herd are the double breed hybrids Landrace — Big White. Terminal boars of the Duroc breed are used to produce commercial piglets.

One of the most sensitive steps in animal farming is the transportation. To minimize the stress of the animals during transport, the company invested in a modern specialized trailer through a leasing agreement with OTPL. Apart from safer and higher comfort transport conditions for animals, the new vehicle is also more fuel efficient and more reliable.

The project was assessed under the simplified rules of the LET process. After the successful project verification, the company received 10% of the loan value as a grant incentive, funded under the EU4Business initiative of the European Union. The project verification was carried out under the special COVID-19 rules set by the EU, which ensure that investment projects can be verified despite COVID restrictions and that investors can receive their grant.  The timely verification and grant payment is important to all companies, but even more so to companies that contribute to safeguarding the food supply during these times.

With the investment, the company now meets a wide variety of European standards, including:

    • Directive 2007/46/EC of the European Parliament and of the Council of 5 September 2007 establishing a framework for the approval of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles (Framework Directive) 
    • Regulation (EC) No 661/2009 of the European Parliament and of the Council of 13 July 2009 concerning type-approval requirements for the general safety of motor vehicles, their trailers and systems, components and separate technical units intended therefor
Loan Amount € 72,902
Grant amount € 7,290
EU Directives met Regulations on motor vehicles and trailer safety
Invested in Pezzaioli SBA 63, Vehicle (Trailer)

Improving worker motivation and process efficiency in agriculture

Improving worker motivation and process efficiency in agriculture

 ‘Zlatopil’ is an agricultural company that has been operating since 1996. The enterprise cultivates about 900 hectares of land located in the Globyno district of the Poltava region.  The company produces wheat, corn, sunflower, soy and winter rapeseed and frequently spearheaded modern farming methods. Recently the company introduced precision agriculture principles, reducing fertilizer requirements and accordingly increased its profitability while reducing negative environmental impact.

In support of its goals towards higher efficiency and profitability, the company also invested in two new seeders, a combine harvester and a tractor, reaping the benefits of a EU4Business-EBRD Credit Line loan.  The equipment was delivered in time for the harvest season.

Apart from improving the capacity and efficiency of the farming processes, the new equipment also provides better health and safety conditions for workers and is much more fuel efficient than the equipment that was replaced. Furthermore, the new equipment is more reliable, reducing maintenance cost and down periods and is simple to use. Equipment operators now also enjoy a quiet cockpit and a dust-free workplace that is cool in the summer and warm in the winter. 

The project was assessed under the simplified rules of the LET process. After the successful project verification, the company received 10% of the loan value as a grant incentive, funded under the EU4Business initiative of the European Union. The project verification was carried out under the special COVID-19 rules set by the EU, which ensure that investment projects can be verified despite COVID restrictions and that investors can receive their grant.  The timely verification and grant payment is important to all companies, but even more so to companies that contribute to safeguarding the food supply during these times.

With the investment, the company now meets a wide variety of European standards, including:

    • Regulation (EU) No 167/2013 of the European Parliament and of the Council of 5 February 2013 on the approval and market surveillance of agricultural and forestry vehicles
Loan Amount € 299,999
Grant amount € 29,999
EU Directives met Regulations farm machinery, improved health and saftey
Invested in Seeders Combine harvester Tractor
Energy Savings and GHG reduction 144.19 MWh/y 38.46 tCO2/y Energy Savings Ratio: 61.3%

Contributing to secure food supply

Contributing to secure food supply

The company Vladana is an important agrarian enterprise located in the Suma region in North-Eastern Ukraine. The company initially took advantage of the opportunities of the ′EU4Business-EBRD Credit line in Ukraine’ by investing in a Cultivator and a Seeder through a leasing contract with OTPL.  The company was very happy with the cooperation and subsequently invested in a Telehandler.

The new equipment has a significant impact on the company’s productivity.  Most importantly however, the equipment is more fuel efficient and also provides vastly superior working conditions for operators.

The last project, relating to the investment in a modern Telehandler, was assessed under the simplified rules of the LET process. After the successful project verification, the company received 10% of the loan value as a grant incentive, funded under the EU4Business initiative of the European Union. The project verification was carried out under the special COVID-19 rules set by the EU, which ensure that investment projects can be verified despite COVID restrictions and that investors can receive their grant.  The timely verification and grant payment is important to all companies, but even more so to companies that contribute to safeguarding the food supply during these times.

With the investment, the company now meets a wide variety of European standards, including:

    • Regulation (EU) No 167/2013 of the European Parliament and of the Council of 5 February 2013 on the approval and market surveillance of agricultural and forestry vehicles 
    • Directive 2007/46/EC of the European Parliament and of the Council of 5 September 2007 establishing a framework for the approval of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles (Framework Directive) 
    • Regulation (EC) No 661/2009 of the European Parliament and of the Council of 13 July 2009 concerning type-approval requirements for the general safety of motor vehicles, their trailers and systems, components and separate technical units intended therefor
Loan Amount € 59,225
Grant amount € 5,923
EU Directives met Regulations farm machinery, improved health and saftey
Invested in Telehandler
Energy Savings and GHG reduction 34.31 MWh/y 9.15 tCO2/y

Reducing raw material input in bottle cap production

Reducing raw material input in bottle cap production

JSC “LACMA” is a plastic packing manufacturer, founded in 1992. The main products of the company are screw caps, spouts for doy packs and flip top caps. The company employs 91 people and its annual production volume constitutes 700 million caps. The company supplies more than 60 producers of beer, carbonated/noncarbonated mineral water and carbonated drinks.

LACMA purchased two 48-slot high-performance hot-channel injection moulds with temperature controllers for production of the screw caps for PET bottles. Just over 71% of the €1.06 million investment was financed with a EU4Business-EBRD Credit Line Loan.

The purpose of the investment was to reduce the consumption of materials and waste per unit of output in the production of plastic caps for plastic bottles with a threaded neck. Furthermore, new equipment is more energy efficient than the existing equipment. It will also increase the production capacity for bottle caps by 22%, and it reduces the consumption of polyethylene used in the manufacturing process by around 32-34%.

After the successful project verification, the company receives 15% of the loan value as a grant incentive, funded under the EU4Business initiative of the European Union. The project verification was carried out under the special COVID-19 rules set by the EU, which ensure that investment projects can be verified despite COVID restrictions and that investors can receive their grant.  The timely verification and grant payment is important to all companies, but even more so to companies that contribute to safeguarding that local production can supply other processing industries and that contribute to employment in the country.

With the investment, the company now meets a wide variety of European standards, including:

    • Directive 2006/42/EC of the European Parliament and of the Council of 17 May 2006 on machinery, and amending Directive 95/16/EC (recast) 
Loan Amount € 757,244
Grant amount € 113,586
EU Directives met Regulations on machinery, on waste, on health and safety of workers
Invested in Two high performance hotrunner 48-cavity injection mould, with temperature controller for the production of screw caps