IFC, together with OTP Leasing, one of Ukraine’s leading leasing companies, has launched a €50 million risk-sharing facility (RSF) to expand financing opportunities for small and medium enterprises (SMEs) as well as larger companies (midcaps). The initiative is designed to support key sectors including agriculture, manufacturing, trade, energy, and logistics, with a strong emphasis on sustainable energy solutions that can help strengthen Ukraine’s energy resilience.
Since the start of Russia’s invasion, Ukraine’s economy has faced severe challenges, including supply chain disruptions, power shortages, and labor constraints, all of which have led to a significant decline in productive capacity. Corporate lending has dropped sharply, falling from 12.8 percent of GDP in 2021 to 9.2 percent in 2024, while the leasing sector—an important alternative for accessing credit—contracted by nearly 60 percent in 2022 before beginning a partial recovery with support from government and development finance institutions. At the same time, the country has lost close to two-thirds of its energy generation capacity, highlighting the urgent need for decentralized and resilient power systems.
The new RSF will enable OTP Leasing to provide additional leases, particularly to underserved SMEs and midcaps, with a focus on projects that promote renewable energy, energy efficiency, climate-smart agriculture, and low-emission transport such as green vehicles. Under the agreement, IFC will share up to 50 percent of the credit risk, with its maximum exposure capped at €25 million. To further encourage sustainable investment, the facility also includes a 10 percent capital expenditure buydown mechanism that will make clean energy and climate-smart solutions more financially attractive compared to conventional alternatives.
Andrii Pavlushyn, CEO, OTP Leasing Ukraine, stated, “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.”
Andrew Ockenden, Chargé d’Affaires, British Embassy Kyiv, mentioned, “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 be later exported to other countries. This approach reflects key priorities behind the 100-Year Partnership Agreement that Prime Minister Keir Starmer and President Volodymyr Zelenskyy signed earlier this year.”
Lisa Kaestner, IFC’s Senior Country Manager for Ukraine, remarked, “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. These efforts aim to strengthen the country’s economic resilience during a time of unprecedented challenges.”
IFC’s role in this project, including the risk-sharing arrangement and the buydown incentive, is supported by its Economic Resilience Action (ERA) Program for Ukraine, with funding assistance from the United Kingdom’s Foreign, Commonwealth & Development Office. The RSF program is a key IFC instrument that allows financial partners to share credit risk on eligible portfolios, thereby facilitating new private-sector financing even in high-risk environments. Across Ukraine, IFC’s RSF initiatives, including this latest project, are expected to unlock around $1 billion in new private-sector financing.
Since February 2022, IFC has committed $2.5 billion to support Ukraine’s private sector under the ERA Program, including $940 million in mobilized financing. The program combines IFC’s own investments with blended finance contributions from development partners to help mitigate risks and sustain business activity in the country. IFC’s broader efforts form part of the World Bank Group’s comprehensive response package for Ukraine, which has already supported over 20 million people by helping businesses remain operational, ensuring the government can deliver essential services, and maintaining critical infrastructure such as schools, hospitals, and energy systems.
Discover more from SolarQuarter
Subscribe to get the latest posts sent to your email.
