IFC, DFC, and Raiffeisen Bank Ukraine Join Forces to Support Ukrainian Businesses

·       Two new risk sharing facilities totaling $210 million to shore up SMEs and larger corporates, especially in agriculture and clean energy

·       Facilities help provide critical financing to maintain operations, preserve jobs, and create value add

Kyiv, Ukraine November 20, 2024—IFC, the U.S. International Development Finance Corporation (DFC), and Raiffeisen Bank Ukraine today announced the establishment of two new risk sharing facilities (RSFs) totaling approximately $210 million-equivalent. The facilities are set to address the critical financing needs of small and medium enterprises (SMEs) and larger corporates (midcaps) in Ukraine, helping them to grow their businesses, and preserve and create jobs.

Risk sharing facilities enable multilateral development banks to share some of the risk of loss to lenders extending credit, particularly in a volatile market.

Through the first RSF, IFC and Raiffeisen Bank Ukraine will support smaller businesses, particularly in agribusiness, with up to $50 million shared equally. IFC’s participation is backed by a partial guarantee through its Economic Resilience Action (ERA) Program, with support from the Swiss State Secretariat for Economic Affairs SECO.

The second RSF, totaling €150 million, comprises contributions of up to €50 million from IFC and $50 million from DFC, with a focus on midcaps. Approximately 30 percent is expected to finance longer-term renewable energy generation and energy-efficiency projects to bolster Ukraine’s energy security. This is the first direct cooperation between IFC and DFC to establish a risk-sharing facility. IFC’s participation is backed by a partial guarantee from the French government with additional support from the UK’s Foreign, Commonwealth, and Development Office, both via IFC’s ERA Program. DFC’s financing is supported is through collaboration with the U.S. Agency for International Development (USAID).

Ines Rocha, IFC’s Regional Director for Europe, said: "These new facilities underscore our commitment to supporting Ukraine's private sector in challenging times. By enhancing access to finance for Ukrainian businesses–the engine of the country’s economy—we aim to help sustain operations, preserve jobs, and maintain the supply of essential goods and services. A significant portion of this financing will support renewable energy and energy efficiency projects, which are crucial for bolstering energy security and promoting sustainable growth. Our collaboration also highlights the strength of international partnerships in fostering economic resilience and sustainable growth in Ukraine."

Russia’s invasion has severely impacted Ukraine’s private sector, disrupting supply chains, causing power outages and workforce shortages, and constraining the ability of banks to provide much needed financing. According to the World Bank data, a significant number of firms continue to exit the market, with 17 percent citing financial constraints.

The new RSFs aim to provide critical financing to businesses and represent IFC’s fourth and fifth risk-sharing investments in Ukraine since February 2022, complementing previously committed RSFs under the Small Loan Guarantee Program, supported by the European Commission.  

IFC has invested almost $2 billion to date, including $1.25 billion for its own account and $718 million mobilized from partners, to support Ukraine’s private sector and prepare for reconstruction.

Ukraine is also one of DFC’s largest markets, with $1.7 billion invested across sectors, including small business lending, energy, health, and more. This transaction marks the first direct cooperation for IFC and DFC to establish an RSF to promote access to finance by Ukrainian businesses.