The European Bank for Reconstruction and Development (EBRD) is providing €20 million to OTP Leasing, the country’s largest leasing company, with a strong presence in the agricultural sector.

This will allow OTP Leasing to support private companies operating in primary and secondary agriculture and other critical industries, from food processing to retail, logistics and pharmaceuticals.

It will also support long-term capital investments of micro-, small- and medium-sized enterprises to upgrade their technologies and equipment, stimulating the uptake of greener technologies.

The facility, composed of two elements, will cover up to 50% of the credit risk of €80 million in newly originated contracts provided by OTP Leasing, subject to a portfolio cap of 50%.

This funding brings the total volume of similar guarantees signed since the start of Russia’s full-scale war on Ukraine up to €368 million.

In response to the war, the EBRD has committed to raise its investment in Ukraine to €3 billion in 2022-23. 

To mitigate risks on its investments the EBRD cooperates with donors and partners. In this case, half of the risk from the new exposure will be offset by First Loss Risk Cover provided by a donor.

Alongside food security, the EBRD’s investment focus in wartime Ukraine is on energy security, vital infrastructure, trade and the private sector.

In addition to a resilience package for Ukraine and neighbouring countries affected by the war, the EBRD has pledged to help finance Ukraine’s reconstruction once conditions permit. OTP Leasing has an approximate 45 per cent market share in Ukraine in terms of leasing portfolio.

European bank results to normalise after strong 1Q 2023: Fitch