Ukraine’s Oschadbank joins EBRD’s Energy Security Support Facility

This article is brought to you in association with EBRD.

• Oschadbank joins EBRD’s Energy Security Support Facility (ESSF) with support from the EU and France 

• EBRD partially covers credit risk for partner banks on loans for decentralised energy generation, energy storage and energy efficiency measures  

• Overall ESSF will enable €700 million worth of lending for energy security investments  

Oschadbank has become the third bank in Ukraine to join the EBRD’s Energy Security Support Facility (ESSF), a landmark programme that enables the country’s financial sector to provide better access to financing for energy security investments. It follows Ukrgasbank and PrivatBank, which joined the ESSF in September. 

The Bank is extending unfunded portfolio-risk-sharing facility partially covering credit risks in up to €100 million of newly originated sub-loans by Oschadbank. This will support the bank’s lending to micro, small and medium-sized enterprises (MSMEs), medium-sized corporate clients, regional municipalities and private households for the implementation of decentralised energy generation, storage and energy efficiency measures critical for Ukraine’s energy security.  

All ESSF sub-borrowers will receive technical assistance with structuring and implementation of their investments. At least 70 per cent of sub-loans will support green economy transition (GET) eligible projects.  

Up to 20 per cent of the total sub-loans will support financing of the long-term capital investments of MSMEs to upgrade their technologies and equipment to European Union (EU) standards under the EU4Business-EBRD Credit Line. Eligible sub-borrowers will receive EU-funded technical assistance and grant support funded by the EBRD Crisis Response Special Fund (CRSF). 

Residential sub-borrowers (households and housing associations) will receive up to 10 per cent of the total investments under this project, and will also benefit from grant support funded through CRSF.  

Grant support for eligible sub-borrowers will cover 10-30 per cent of their investment costs financed under the ESSF. Higher incentives will be provided for businesses and households most affected by the war on Ukraine, including those impacted by asset destruction, loss, or relocation due to the war, as well as sub-borrowers facilitating the reintegration of war veterans, persons with disabilities, internally displaced persons, and/or those located in the acutely war-affected territories of Ukraine.  

The EBRD facility will be supported by partial first-loss risk cover guarantees extended by France and the European Union’s Ukraine Investment Framework (UIF). 

The ESSF programme is another example of the EBRD’s response to the energy crisis in Ukraine amidst  Russian attacks on its critical energy infrastructure, causing a loss of more than 9,000 MW of generating capacity in the country and significantly impacting Ukraine’s ability to maintain economic and industrial operations.  

Through the ESSF, the Bank partially covers the risk of partner financial institutions on a total of €700 million of sub-loans for investment in decentralised energy generation, energy storage and energy efficiency measures. Ukrainian businesses, state-owned enterprises, including municipalities, municipal companies and households are eligible for ESSF sub-loans, thus strengthening their resilience to both immediate energy security risks and the medium-term impacts of climate change.   

State-owned Oschadbank is ranked the second largest bank in Ukraine by assets and retail deposits. With about 1,150 branches and 16,000 employees, it provides services to over 3,600 corporate, 230,000 MSME and about 6 million retail customers. Oschadbank is a universal bank that gives priority to expanding its retail and MSMEs franchise while retaining a firm position in corporate business.  

The EBRD has already allocated €66 million of EU grant support for Ukrainian MSMEs under the EBRD-EU4Business Credit Line, including €4.3 million to projects through Oschadbank.  

The EBRD is Ukraine’s largest institutional investor. It has deployed €6.2 billion in the country since 2022 and has secured agreement for a further €4 billion capital increase to continue lending at these levels in wartime, with the potential for more once full reconstruction begins.