The World Bank’s Board of Executive Directors approved an Additional Financing loan to Ukraine in the amount of US$150 million for the Second Export Development Project (EDP 2).The project supports export and real sector growth in Ukraine by providing medium and long-term investment and working capital finance to Ukrainian private exporting enterprises. The project also aims to further improve the ability of the Ukrainian banking sector to intermediate financial resources to the enterprise sector by providing a wider variety of better quality lending products.
“Ukraine needs more competitive and diversified exports to sustain economic growth in these volatile global times. This project was a key source of financing for exporters during the crisis. By providing additional financing now, we hope to extend its impact into a lasting recovery,” said Martin Raiser, World Bank Country Director for Ukraine, Belarus and Moldova.
The Additional Financing loan will supplement the existing EDP2 credit line and will extend the EDP2 project implementation through the end of 2014.
EDP 2, approved in 2006, is a successor to the previously successful EDP 1 project (1996-2003). The borrower and the main implementation agency remains the State Export-Import Bank of Ukraine (Ukreximbank). Of the US$ 150 million Additional Financing loan provided by the World Bank, US$ 45 million will be used by Ukreximbank for direct financing of its exporting clients, while US$ 105 million will be used for lending by Ukreximbank to eligible financial intermediaries for their further on-lending to Ukrainian exporters.
The loan will be provided to Ukreximbank as a LIBOR-based flexible variable spread loan repayable in 30 years, including a 6-year grace period, and will be provided a state guarantee by Ukraine.
Since Ukraine joined the World Bank in 1992, World Bank commitments to the country total about US$ 7 billion for 39 projects and programs.