The International Finance Corporation (IFC) has teamed up with Ukraine’s OTP Leasing to create a €50 million risk-sharing facility that will help small and medium businesses access credit in war-torn Ukraine, according to official statement. IFC will cover up to half the credit risk, with maximum exposure of €25 million, while targeting sectors like agriculture, manufacturing, trade, energy, and logistics. The program prioritizes sustainable energy projects that can help rebuild Ukraine’s shattered power grid.
Russia’s invasion devastated Ukraine’s economy through supply chain breakdowns, constant power outages, and massive labor shortages. Corporate lending plummeted from 12.8 percent of GDP in 2021 to just 9.2 percent last year as banks pulled back from risky loans. The leasing sector, which many businesses rely on for equipment financing, crashed by nearly 60 percent in 2022 and still hasn’t fully recovered.
The new facility focuses heavily on green energy solutions, offering a 10 percent capital cost reduction to companies that choose renewable energy over polluting alternatives. Ukraine has lost almost two-thirds of its power generation capacity since the war started, making small-scale, decentralized energy systems crucial for survival. The program will fund climate-smart agriculture projects, green vehicles, and small renewable energy installations that can operate independently of the main grid.
OTP Leasing CEO Andrii Pavlushyn said the partnership will help provide “sustainable and innovative leasing solutions” during these tough times. British officials, whose government supports the program through IFC’s Economic Resilience Action initiative, see it as part of building Ukraine’s long-term green economy recovery.
This deal is part of IFC’s broader Ukraine program that has delivered $2.5 billion since February 2022. The risk-sharing approach helps unlock private financing in volatile markets – IFC expects its entire Ukraine portfolio to generate about $1 billion in new private sector lending.
