European Union allocates additional €20 million for Ukrainian SMEs via joint BGK, KredoBank and PrivatBank programme

During the Common Future Congress in Poznań, Bank Gospodarstwa Krajowego signed agreements with two Ukrainian banks - KredoBank and PrivatBank. These agreements implement the provisions of the agreement between BGK and the European Union (EU) regarding the extension of support for Ukrainian SMEs (so-called top-up). The EU has allocated an additional €20 million in support from the Ukraine Facility Pillar II to increase the credit attractiveness of KredoBank and PrivatBank for Ukrainian companies operating near the war zone.

BGK continues its activities in the field of EU guarantee support for the micro, small and medium-sized enterprise sector in Ukraine. Until now, the Polish development bank has secured KredoBank's lending activities for companies operating in Ukraine. This enabled access to financing for micro, small and medium-sized enterprises - mainly in areas close to the war zone (red and yellow zones), where access to bank financing is particularly difficult.

From the beginning of 2023 until July 2024, more than 100 companies, mainly from the agri-food and industrial sectors, benefited from the €20 million of support, creating almost 6,000 jobs.

Now, in accordance with the agreement concluded with BGK on 28 August this year, the EU will allocate an additional €20 million to support Ukrainian companies (the total amount will therefore increase to €40 million). Of this amount, €10 million will be allocated for further cooperation with KredoBank. The second €10 million will go to the another financial institution to join the programme - PrivatBank.

Thanks to the funds obtained, PrivatBank's lending activity will be additionally secured by EU guarantee. Financing will be provided to cover the energy needs of the SME sector in Ukraine near hostilities (red zone).

"The EU is proud to further expand access to finance for SMEs in Ukraine, especially those hardest hit by Russia’s war of aggression. This reflects the EU’s commitment to continue to stand by Ukraine and cater to the needs of vulnerable communities, in this case, businesses in areas where financing is difficult to obtain, and ultimately the people they employ. We are happy to work with BGK, whose strong track record of working in war-affected and de-occupied territories ensures a solid socio-economic impact."

Oliver Várhelyi,European Commissioner for Neighbourhood and Enlargement Negotiations.

"As a development bank with a pillar assessment by the EC, we can actively participate in the implementation of European actions and funds supporting Ukrainian companies. The agreements signed today confirming the allocation of an additional pool of €20 million to guarantee the lending of two Ukrainian banks are the best proof of the effectiveness of the program that has been implemented for many months. This is about real support for Ukrainian business in areas close to the war zone, where it is difficult to obtain new financing."

Miroslaw Czekaj, President of the Management Board of Bank Gospodarstwa Krajowego.

"KredoBank was one of the first commercial banks in Ukraine to start issuing loans to entrepreneurs operating in the so-called “red” and “orange” zones. Thanks to the funding provided by KredoBank in partnership with the European Commission and BGK, our clients have created almost 6,000 jobs. As of now, the agricultural sector is one of the key areas of our lending having almost 50 per cent of the total limit of the current EU programme. We greatly appreciate our long-term cooperation with international partners. The Ukrainian private sector, which is currently operating in a high-risk area, needs even more financial support to survive and provide critical resources to Ukrainians living in these areas."

Jakub Karnowski, First Vice President of KredoBank S.A.

"We are grateful to Bank Gospodarstwa Krajowego and the European Commission for supporting our country and business at this crucial time, and for their confidence in PrivatBank. We are proud to join the efforts of international partners and work every day to strengthen the Ukrainian economy. As Ukraine's largest state-owned bank serving more than 880 business clients, we appreciate every new investment opportunity for Ukraine's micro, small and medium-sized enterprises, which have shown resilience and continue to operate in extremely difficult conditions and close to the front lines."

Levgen Zaigraiev, czlonek zarzadu PrivatBank

Additional Information

Ukraine Investment Framework

The EU's Ukraine Investment Framework is an integral pillar of the €50 billion EU Facility for Ukraine (the so-called Ukraine Facility), which aims to attract public and private investment for the reconstruction and rehabilitation of Ukraine. It is equipped with financial instruments worth a total of €9.3 billion, including €7.8 billion in loan guarantees and €1.51 billion in blended financing. The goal of the Ukraine Investment Framework is to mobilize €40 billion in investments for the reconstruction, modernization and long-term growth of Ukraine, supporting the goals and implementation of the Plan for Ukraine in line with EU policy priorities.

Kredobank was founded in Lviv in 1990, the National Bank of Ukraine has classified it among the banks of systemic importance of Ukraine, and it belongs to the PKO Bank Polski financial group - Poland's largest financial institution and one of the largest financial groups in Central and Eastern Europe. The group's parent company is Poland's largest bank, PKO Bank Polski, with a 100-year history, one of Europe's most stable banks according to the European Banking Supervision Administration's stress test results (July 2021). Kredobank offers a full range of services to retail customers, small, medium and large business enterprises in Ukraine. The bank actively provides loans to small, medium and large businesses, offering a number of special programmes and grants in cooperation with the EBRD and the European Commission, and actively participates in state programs to support Ukrainian business. The bank has achieved a national credit ranking of uaAAA with a stable outlook and a short-term credit ranking of uaK1 according to Standard-Rating and Expert Rating agencies.

PrivatBank is the largest state-owned bank in Ukraine. The bank serves more than 18 million individual customers and more than 900,000 active business customers, with more than 70 percent of Ukrainians using its services. The bank is a leader in the retail segment, introducing new and improving existing services for small and medium-sized businesses, and has created a strong digital ecosystem and a wide network of more than 1,186 branches, 6,850 ATMs and more than 308,000 POS terminals across the country. PrivatBank's team is made up of more than 19,000 employees. PrivatBank works to drive Ukraine's economy, supporting residents and businesses despite the war.