Financial sector news

UAH 90.9 million was paid by authorised banks to farmers under the programme of partial compensation for the cost of agricultural machinery and equipment made in Ukraine (25%). The Ministry of Economy approved the relevant orders within three months of the state support programme.

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In particular, they received compensation:

• in April - over UAH 220 thousand (3 farmers);
• in May - over UAH 18.6 million (93 farmers);
• in June - almost UAH 72.2 million (204 farmers).

Over the three months of the programme, 300 agricultural enterprises purchased 460 units of Ukrainian machinery and equipment worth UAH 435.5 million.
According to the data received from authorised banks, almost UAH 62 million of partial compensation for the purchase of Ukrainian-made agricultural machinery and equipment is planned to be paid to farmers in July.

Today, the Ministry of Economy of Ukraine has signed the second cooperation agreement under the state program “State Stimulation of Industrial Parks Creation”. Ukrgasbank became the second state-owned bank to join the program. Support for industrial parks is part of the Made in Ukraine policy initiated by President Volodymyr Zelenskyy.

As a result, the initiator or management company of industrial parks can apply for state incentives in two key areas.

 

The second area provides an opportunity to receive compensation for the costs of connecting and connecting to engineering and transport networks. This compensation will reduce the financial burden on project initiators and facilitate the faster commissioning of industrial parks. It should be reminded that during the martial law period, compensation is provided only for connection to the power grid.

The signing of the agreement with Ukrgasbank is an important step in the development of industrial parks. Cooperation with the banking sector will provide initiators with access to non-repayable financing for infrastructure development and compensation for the cost of connecting to utility networks, which will greatly simplify project implementation and create attractive conditions for investors.

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The Ministry of Economy is expected to sign a similar agreement with another state-owned bank in the near future. This will expand opportunities to attract state funding and support for industrial park projects, promote their development and increase the international competitiveness of the Ukrainian economy.

As a reminder, 86 industrial parks have already been registered in almost all regions of Ukraine. 60 of them have management companies, 10 have participants, and 16 have other entities. During the first and second quarters of 2024, 11 industrial parks were included in the Register, which is more than in 2022. Also this year, 5 parks were excluded.

The state budget of Ukraine for 2024 provides UAH 1 billion to stimulate the creation of industrial parks. In March 2024, the Procedure for the use of budget funds was approved. The updated Procedure provides for the provision of funds on a non-refundable basis (50% of the estimated cost) to management companies of industrial parks for the arrangement or construction of engineering and transport infrastructure, as well as reimbursement of 50% of the cost of connection to the power grid.

Management companies will be able to implement larger projects, as the maximum incentive amount has been increased from UAH 60 million to UAH 150 million, with co-financing of the work in a 50-50 ratio. Management companies of industrial parks from the de-occupied territories will be able to implement projects in a co-financing ratio of 80 to 20.

Certain safeguards have also been introduced. Each applicant undertakes to build at least 5,000 square meters of industrial buildings on the territory of the industrial park within 3 years and to attract at least 2 participants. All incentives will be provided through escrow accounts to be opened by applicants in state-owned banks.

Why is the development of industrial parks so important for Ukraine?

 

The development of industrial parks and thus attracting investment in the real sector is part of the “Made in Ukraine” policy initiated by President Volodymyr Zelenskyy.

Several leading banks have signed an Addendum to the Memorandum on Bank Lending for Energy Infrastructure Rehabilitation Projects aimed at detailing the terms of financing to make it as clear, accessible and systematic as possible.

The signing of the Memorandum itself, which took place on June 25, was the first step towards broad financing and practical implementation of a large-scale program to restore the country's war-affected power system.

According to the Addendum, the basic interest rate on the loans will be 13.5% per annum or UIRD3M + 0.5% for the first year of financing. Starting from the second year, the rate will be floating and will not exceed UIRD12M + 3%.

To ensure transparency and accessibility of information, each bank participating in the Memorandum undertakes to publish loan product standards on its official websites. These standards will take into account the client's risk profile and lending conditions, such as the type of project, level of own contribution, loan amount, term, availability and sufficiency of collateral, as well as sureties or guarantees.

Governor of the National Bank of Ukraine Andriy Pyshnyi  during an expanded meeting of the Presidium of the Congress of Local and Regional Authorities chaired by President of Ukraine Volodymyr Zelenskyy said,that 19 Ukrainian banks have now joined the memorandum. According to the document, they will be able to provide preferential lending for energy infrastructure restoration projects.

"This is an unprecedented, historic moment. We managed to unite 19 banks under this memorandum, which provides support for the restoration of energy infrastructure. An important element is that this memorandum united state, commercial and capital development banks at the same time," emphasized Andriy Pyshnyi.

Addendum to the MEMORANDUM OF BANK LOANS FOR ENERGY INFRASTRUCTURE REPAIR PROJECTS