IFC, UKRSIBBANK Launch €66M Risk-Sharing Facility to Support Ukrainian Midcaps

The facility is designed to meet the urgent financing needs of medium-sized and larger corporates (commonly referred to as midcaps), which form a critical segment of Ukraine’s economic structure.

In a strategic move aimed at revitalizing Ukraine's private sector amidst ongoing economic turbulence, the International Finance Corporation (IFC) and UKRSIBBANK—jointly owned by BNP Paribas and the European Bank for Reconstruction and Development (EBRD)—have launched a new risk-sharing facility (RSF) worth €66 million. The facility is designed to meet the urgent financing needs of medium-sized and larger corporates (commonly referred to as midcaps), which form a critical segment of Ukraine’s economic structure.

A Strategic Response to a Challenged Economy

Ukraine’s economy, though notably resilient, continues to grapple with the far-reaching effects of Russia’s invasion. Supply chain interruptions, intermittent power outages, and labor shortages have significantly disrupted business continuity across sectors. According to the World Bank Group’s fourth Rapid Damage and Needs Assessment (RDNA4), as of December 31, 2024, the country had incurred direct physical damages of $176 billion, economic losses of $589 billion, and faces reconstruction needs amounting to $524 billion over the next decade.

Amid these challenges, many Ukrainian businesses—especially midcaps—find themselves under increasing financial strain, as credit availability in the corporate sector remains constrained. Although there has been a mild uptick in business lending since 2024, banks still prioritize low-risk assets, leaving many growth-oriented companies without access to essential credit for capital investment and operational scaling.

The Structure and Impact of the RSF

The newly launched RSF will allow UKRSIBBANK to significantly increase lending to midcap enterprises across vital sectors such as agribusiness, manufacturing, trade, and logistics. These sectors are not only central to Ukraine’s domestic stability but are also key contributors to its exports and foreign currency reserves.

The structure of the RSF enables IFC to assume 50% of the credit risk, up to a maximum of €33 million. This approach is intended to de-risk UKRSIBBANK’s loan portfolio, thereby encouraging more aggressive lending to companies that might otherwise be overlooked. The facility is expected to unlock approximately $100 million in new credit lines for midcaps, aiding them in business continuity and growth.

Energy Security and Sustainability at the Forefront

Recognizing Ukraine’s precarious energy situation, the RSF earmarks approximately 20% of its portfolio to fund small-scale renewable energy and energy efficiency initiatives. These projects will play a critical role in rebuilding Ukraine’s energy infrastructure, which has been a frequent target of military strikes.

By supporting local generation capacity and modernizing systems for better efficiency, this component of the RSF is expected to reduce greenhouse gas emissions by 34,080 tons of CO₂ equivalent annually. These efforts directly contribute to Ukraine’s short-term energy recovery needs while reinforcing long-term sustainability and resilience.

International Support and Broader Strategic Goals

IFC’s involvement in this facility is backed by a partial guarantee from the government of France. Meanwhile, the United Kingdom’s Foreign, Commonwealth & Development Office (FCDO) is providing additional financial incentives to encourage midcaps to adopt longer-term, sustainability-focused initiatives.

The partnership is part of a larger IFC strategy that includes six risk-sharing investments in Ukraine since the onset of the war. These initiatives together are expected to channel nearly $1 billion in financing to midcaps and small businesses, facilitating both economic recovery and job creation.

Voices from the Partnership

Laurent Dupuch, chairman of the management board of UKRSIBBANK, emphasized the facility's human and economic dimensions, stating:

"By supporting businesses and entrepreneurs, we are not just financing projects. We are investing in Ukraine's economic resilience and the confidence of Ukrainians in their future. Cooperation with IFC will allow more companies to access loans."

He also noted the broader social impact of the facility:

“Through the new program, we can strengthen key sectors, businesses, and entrepreneurs that sustain livelihoods and ensure energy security. However, it also has a significant social impact, as people, jobs, and communities are often behind every business.”

Ines Rocha, IFC’s Director for Europe, highlighted the broader vision:

"Ukraine’s private sector has a key role to play in meeting reconstruction needs, preserving and creating jobs. This investment will not only support employment but also bolster the country's efforts to ensure energy security and resilience.”

A Pivotal Step Toward Recovery

The €66 million RSF marks a significant milestone in Ukraine’s journey toward economic stabilization and sustainable growth. By focusing on high-impact sectors and supporting renewable energy and efficiency, this facility reflects a well-rounded approach to reconstruction that balances immediate needs with future resilience.

As Ukraine continues its long road to recovery, partnerships such as this between IFC and UKRSIBBANK underscore the critical role of international finance and collaboration in enabling local businesses to lead the way toward a more stable, sustainable, and self-reliant economy.