IBRD

The Second Export Development Project (EDP2)

Additional Financing for EDP2

Energy Efficiency Programme

THE SECOND EXPORT DEVELOPMENT PROJECT (EDP2)

The JSC Ukreximbank was the only Ukrainian bank participating in the Export Development Project of the International Bank for Reconstruction and Development (IBRD). The EDP was a special investment programme offering credit, technical and information assistance to Ukrainian exporters.

Loan Agreement was signed in 1997. Total amount of credit line for financing export development projects in Ukraine was USD 60 mln and EUR 7.7 mln. 32 exporting enterprises with leading standings in different sectors of Ukrainian economy participated in the Project. The line was completely utilized and on June 30, 2004 the Project was accomplished.

Second Export Development Project (EDP2) was approved by the IBRD Board of Executive Directors in July 2006 in the amount of US$154.5 million. In September 2006, both the Guarantee Agreement between Ukraine and the IBRD and the Loan Agreement between the Bank and IBRD were signed. Ukrainian parliament ratified the Guarantee Agreement by adoption of the Law of Ukraine of 1 December 2006 #423-V. The loan became available for use by the Bank on 20 March 2007.

The primary objective of EDP2 is to provide medium and long-term working capital and investment finance to private exporting enterprises using financial intermediation to involve pre-selected Ukrainian commercial banks to further fund investment needs and working capital of Ukrainian privately-owned exporting companies.

EDP2 programme was amended in June 2009 to provide additional flexibility and to increase its effectiveness in the light of the financial crisis as the Bank was allowed to extend sub-loans out of EDP2 funds directly to existing clients who were eligible exporting companies.

There are a number of sub-projects approved within the EDP2 programme. The loan proceeds supported investment and working capital requirements of over 25 eligible Ukrainian exporters enabling the participating exporting companies to better withstand the impact of the global financial and economic crisis and achieving in a number of cases a significant increase in export revenues.

Given the success of Second Export Development Project (EDP2) programme and based on the Bank’s forecasts of export demand, the Bank initiated consultation with the IBRD and the Government with the view of increasing the programme financing by additional US$150 million. The Bank is confident that an expanded EDP2 facility would not only ensure continuity in the efforts to support national exports, but provide additional momentum to the project and its overall developmental impact.

ADDITIONAL FINANCING FOR EDP2

On May 11, the Cabinet of Ministers of Ukraine resolved on expediency of additional export development financing against the sovereign guarantee. On August 25, 2011, the Board of Executive Directors of the World Bank approved the loan in the amount of USD 150 million for the period up to 30 years under the Additional Financing for the Second Export Development Project for JSC Ukreximbank. On October 4, 2011 both the Guarantee Agreement between Ukraine and IBRD and the Loan Agreement between IBRD and JSC Ukreximbank were signed.

The Additional Financing will increase the existing facility amount under the EDP2 and boost activity in the framework of the underlying project. The Additional Loan will contribute to continuing positive dynamics of the previous export development project implementation, enhancement of impact of the existing facility on the national exporters’ activity.

Ukreximbank will act as a borrower of funds and will be responsible for Project implementation and bear all credit risks. The World Bank long-terms loan funds will be provided to the Ukrainian exporters, which are in compliance with the Project eligibility criteria.

The Additional Financing funds will increase Ukreximbank potential to render a wide range of services for facilitating export by the most cost-effective means for the customers, which is a critical prerequisite for support of the export development activity of the Ukrainian companies. The Project is expected to result in growth of the Ukrainian corporate sector export volume in the near-term outlook and enhancement of its capacity to support and ensure the export growth in the medium- and long-term outlook.

ENERGY EFFICIENCY PROJECT

Energy Efficiency Project (EEP) was approved by the IBRD Board of Executive Directors in May 2011 in the amount of US$200.0 million. In June 2011, both the Guarantee Agreement between Ukraine and the IBRD and the Loan Agreement between the Bank and IBRD were signed. Ukrainian Parliament ratified the Guarantee Agreement by adopting the Law of Ukraine on 4 October 2011 #3812-VI. The Loan gained effectiveness in November 2011.

The purpose of the Energy Efficiency Project is reduction of the energy intensity in the Ukrainian industry and decrease of energy losses in the residential sector, particularly, in heating and household maintenance. Ukreximbank will apply the 30-year maturity funding to provide medium- and long-term financing of energy efficiency investment projects to Ukrainian industrial and municipal enterprises. Ukreximbank will provide loans under the Project both directly to the final beneficiaries as well as via Ukrainian commercial banks selected pursuant to the eligibility criteria established jointly with the World Bank.