The Project is to be implemented by the Ministry of Finance of Ukraine granting loans to the participating banks selected, which in turn will finance the loan projects of their clients.
As per the announcement of the Ministry of Finance of Ukraine to select banks to participate in the project, qualifying as a participant requires these criteria to be met:
- meet the criteria approved by Resolution of the Cabinet of Ministers of Ukraine No. 606 of July 10, 2019 “Implementation Issues of the Joint Project “Ukraine Agri-food APEX Loan” (Ukraine Agri-Food Value Chain Project) with the European Investment Bank”, which include the following key requirements:
- non-modified audit opinion in the most recent year,
- compliance with the National Bank of Ukraine normative indicators and other requirements,
- positive operational profit,
- not under sanctions, not working with individuals/companies under sanctions, and in compliance with FATF regulations.
- submit an official letter signed by an authorised person, indicating the expected amount of funding under the Project, together with the documents on the list approved by the Cabinet of Ministers Resolution referred to above.
Key benefits for financial institutions participating in the Project:
1. Better interest rate financing in EUR or USD.
2. Up to 10-year financing term
3. Reputational benefits that come from partnership with the European Investment Bank
4. Free technical support for project participants (whether for financial institutions or borrowers
Sub-projects are selected by participating banks themselves subject to EIB criteria and in line with the terms and conditions of the Financing Agreement.
The key parameters for sub-projects (sub-loan for investments):
- maximum amount of a sub-project: up to the EUR 50 million equivalent;
- maximum financing using EIB funds: up to 50% of the investment cost of the sub-project, up to the EUR 12,500,000 equivalent;
- maximum amount of working capital financing using EIB funds:
- up to the EUR 5.0 million equivalent.
A participating bank is required to submit a sub-loan package for each sub-project to include the following documents:
- description of a sub-borrower and sub-project (sub-loan for investments),
- sub-borrower’s investment program (if applicable),
- the detailed list of sub-borrower’s associates,
- environmental and social report and documents,
- procurement documents for the sub-project (sub-loan for investments),
- a confirmation note by the Participating Bank that the sub-borrowers do not engage (authorise or permit any affiliate or any other person acting on their behalf to engage) any prohibited activity, do not enter into a business relationship with any person subject to sanctions and do not provide any funds either directly or indirectly to any person to whom sanctions are imposed,
- a confirmation note by the participating bank and sub-borrowers that all funds invested in the sub-project (sub-loan for investments) are not of unlawful origin, in particular those derived from money laundering, and that they are not related to terrorist financing,
- any further information the EIB, Ministry of Finance and Ukreximbank may reasonably request.