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EBRD Guarantees Ukraine’s JSC OTP Bank to Enable Lending

Banking

The European Bank for Reconstruction and Development announced that it is extending an unfunded portfolio risk-sharing facility to Ukraine’s JSC OTP Bank, the local unit of Hungary’s lender OTP, to unlock EUR 120 million of new financing for Ukraine’s private sector amidst the ongoing war waged by Russia.

The EBRD’s facility will cover up to 50% of JSC OTP Bank’s credit risk on newly issued sub-loans worth EUR 120 million to private businesses operating in Ukraine.

This credit enhancement mechanism enables OTPU to finance critical industries such as agriculture, manufacturing, transport and logistics, supporting companies’ operations and preserving access to critical goods as a vital step in safeguarding people’s livelihoods, according to the statement.

Total enabled financing under similar EBRD guarantees, signed since the start of Russia’s full-scale war on Ukraine, amounted to close to EUR 900 million as of end-2023.  (source: EBRD)

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