KYIV
The World Bank approved a $100 million loan, to be paid out to Ukraine’s Ukreximbank, in order to provide further financing for small and medium-sized businesses affected by restrictions imposed to curb the spread of COVID-19.
The loan is being allocated under Ukraine’s “Access to long-term finance” project, as additional financing for the country’s COVID-19 response, the bank said in a press release. State-owned Ukreximbank will use the funds for loans to SMEs, in particular by offering sub-loans of longer maturity than that currently available on the market.
“These new loans from Ukreximbank will create jobs, stimulate competitiveness, help Ukrainian companies find new customers abroad, increase revenues, and contribute to poverty reduction as Ukraine recovers from the pandemic,” Arup Banerji, World Bank Regional Country Director for Eastern Europe, said.
The ongoing $150 million “Access to long-term finance” project, which was implemented in the summer of 2018, has already had a positive effect on Ukraine’s SME sector. More than 50 entrepreneurs from all over Ukraine have already received financial support as part of the project. The majority of businesses supported by the project are in the agriculture and food processing industries, a sector in which where Ukraine’s exporters hold a natural comparative advantage and where SMEs traditionally dominate.
The project also provided loans to companies in production industries including the manufacturing of mining equipment and refrigerators, dental and electric equipment, plastic packaging, wood processing, and carpet-weaving. The extra financing allowed them to compete with larger businesses.
The World Bank’s current investment project portfolio in Ukraine is worth about $3.3 billion, covering 11 ongoing investment projects and one programme for results operation. The investment projects improvements in basic public services and areas such as water supply, sanitation, heating, power, energy efficiency, roads, social protection, education and healthcare, as well as private sector development.
The World Bank has committed more than $13 billion in about 70 projects and programmes since Ukraine first joined the bank in 1992.