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.

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

New Corn LLC – Leases new Tractor

New Corn LLC – Leases new Tractor

Approximately 50% of Ukraine’s 603,000 km2 land mas is devoted to agriculture, and Ukraine’s arable land is amongst the finest in the world.  It is therefore not surprising that Ukraine belongs to the largest corn producers in the world and corn exports are an important part of the economy.  Helping producers align with European Directives and improving their cost structure, for example through energy savings, is the dedicated goal of the EU4Business-EBRD Credit Line. New Corn LLC took advantage of this opportunity and leased a new Tractor from the EU4Business-EBRD Credit Line Partner Finance Institution OTPL. The new Tractor corresponds with European regulations and is therefore also fully aligned with energy efficiency standards, resulting in environmental improvements especially regarding CO2 emissions. 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.

Invested in:

  • Tractor New Holland T7060

Loan & Grant:

  • Loan Amount: EUR 64,624.98
  • Grant Amount (10%): EUR 6,462.50

Value Added Benefits:

  • Primary Energy Use Avoided: 53.18 MWh/yr
  • GHG Emissions Avoided: 14.6 t CO2/year;
  • In addition, the investment leads to better Health h& Safety conditions of the workers

EU Directives Met

  • Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency, amending Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC and 2006/32/EC Text with EEA relevance
  • Regulation (EC) N. 661/2009 of the European Parliament and of the Council concerning type-approval requirements for the general safety of motor vehicles, their trailers and systems, components and separate technical units intended therefore