IFC and OTP Leasing Launch €50M Facility to Bolster Ukraine’s SMEs and Green Energy

Energy infrastructure has been particularly hard-hit, with nearly two-thirds of Ukraine’s generation capacity lost since the start of the invasion.

 

The International Finance Corporation (IFC), a member of the World Bank Group, has joined forces with OTP Leasing, one of Ukraine’s leading leasing companies, to launch a landmark €50 million Risk Sharing Facility (RSF). The initiative seeks to expand financing for small and medium-sized enterprises (SMEs) and midcaps, while strategically channeling funds toward renewable energy, energy efficiency, and climate-smart solutions that strengthen Ukraine’s resilience amid the ongoing war.

Supporting Ukraine’s Private Sector Under Strain

Russia’s invasion has had a devastating impact on Ukraine’s economy. With supply chains disrupted, power systems damaged, and the labor force strained by displacement and mobilization, Ukraine has experienced a sharp contraction in private sector activity. Corporate credit has fallen steeply from 12.8 percent of GDP in 2021 to just 9.2 percent in 2024. The leasing sector—an essential alternative financing channel—suffered an almost 60 percent collapse in 2022 and has only partly recovered thanks to government interventions and international support.

Energy infrastructure has been particularly hard-hit, with nearly two-thirds of Ukraine’s generation capacity lost since the start of the invasion. Decentralized and renewable energy systems are now seen as critical for both economic continuity and national security.

A New Leasing Boost for Green and Resilient Growth

The new €50 million RSF will enable OTP Leasing to extend additional leases to SMEs and midcaps, especially those investing in sustainable and innovative solutions. Key sectors targeted include agriculture, manufacturing, trade, logistics, and energy. Businesses adopting small-scale renewable energy generation, energy-efficient technologies, climate-smart agriculture, or green vehicles will be prioritized.

To encourage uptake of environmentally friendly solutions, the facility incorporates a 10 percent capital expenditure buydown mechanism. This incentive, supported by development partners, will make sustainable technologies more affordable by effectively lowering initial investment costs for lessees compared to conventional, more polluting alternatives.

Under the agreement, IFC will assume up to 50 percent of the credit risk, with its maximum exposure capped at €25 million. This structure ensures that lending continues despite Ukraine’s volatile environment, while reducing the burden on OTP Leasing.

Backed by IFC’s Economic Resilience Action Program

The RSF is anchored in IFC’s broader Economic Resilience Action (ERA) Program for Ukraine, launched in 2022 to sustain the private sector during wartime conditions. The program has already delivered $2.5 billion in financing, including $940 million in mobilized funds from partners. The United Kingdom’s Foreign, Commonwealth & Development Office (FCDO) is contributing directly to this project, underscoring international support for Ukraine’s long-term recovery.

Andrew Ockenden, Chargé d’Affaires of the British Embassy in Kyiv, emphasized the strategic value of the initiative:

“The UK stands firmly behind Ukraine's green, sustainable economic recovery. This deal will not only respond to immediate needs of SMEs but help build a more sustainable future economy for Ukraine and help develop green technologies that might later be exported abroad. This reflects the priorities behind the 100-Year Partnership Agreement signed earlier this year between Prime Minister Keir Starmer and President Volodymyr Zelenskyy.”

Partnership for Economic Resilience

OTP Leasing CEO Andrii Pavlushyn highlighted the deal’s importance for Ukraine’s private sector:

“We are proud to partner with IFC on this important €50 million RSF deal, which includes a capital expenditure buydown component. This collaboration will strengthen our ability to provide our clients with sustainable and innovative leasing solutions, promote economic growth, and support Ukraine’s resilience in challenging times.”

Lisa Kaestner, IFC’s Senior Country Manager for Ukraine, added:

“This partnership with OTP Leasing will expand access to financing for Ukrainian businesses, particularly in critical sectors like agribusiness, manufacturing, and logistics. The initiative will help businesses invest in sustainable energy solutions such as climate-smart agriculture, small-scale renewable energy generation, and energy-efficient projects.”

IFC’s Broader Commitment to Ukraine

RSFs are part of IFC’s wider toolkit to share credit risk with financial institutions, encouraging continued lending in high-risk markets. In Ukraine alone, IFC’s RSF program is expected to unlock approximately $1 billion in new private-sector financing.

Beyond private sector support, IFC’s work complements the World Bank Group’s broader response, which has reached more than 20 million Ukrainians. Assistance has ranged from keeping schools and hospitals open to supporting businesses and repairing essential infrastructure.

Looking Ahead

The IFC-OTP Leasing partnership underscores a dual mission: supporting Ukraine’s immediate economic survival while laying the foundation for long-term, green, and resilient growth. By channeling financing into energy efficiency, renewable power, and sustainable industries, the RSF represents not just crisis support but a strategic bet on Ukraine’s future role as a hub for clean technologies and resilient industries in Europe.