LONDON, ENGLAND — The E.U. – jointly with the European Bank for Reconstruction and Development (EBRD) – have put in place the SME Direct Support Facility (facility) for small- and medium-sized businesses (SMEs) in the countries of the Deep and Comprehensive Free Trade Area (DCFTA). The facility supports the increase of SMEs’ competitiveness, ease their access to finance, helps them with new trade opportunities and compliance with new food safety, technical and quality standards, as well as with environmental protection measures.
The latest project under the EU-EBRD DCFTA SME Direct Support Facility - and first of its kind in Ukraine - is a $5 million loan to LLC V.V. Kischenzi, a privately owned diversified agricultural producer based in the Cherkassy region of central Ukraine. Kischenzi, operates a variety of businesses ranging from grains and vegetables growing to dairy and pig farming. Around 60% of its output is successfully exported to the E.U. and other markets. The loan will be covered by a first-loss guarantee from the E.U. grant under the above facility.
The proceeds of the loan will be used to upgrade its fleet of combine harvesters and to acquire supplementary agricultural equipment like cultivators. The project will help Kischenzi strengthen its export potential and implement modern state-of-the-art farming technics and standards thus creating a successful benchmark for the industry in Ukraine.
By supporting this transaction, the EBRD and the E.U. are continuing to provide more resources to support agribusiness, a key growth driver of the Ukrainian economy - and help small businesses in Ukraine unlock new opportunities available under the Deep and Comprehensive Free Trade Area.
The agreement between the E.U. and Ukraine including the DCFTA started Jan. 1. The E.U. pays special attention to support of the private sector, especially smaller businesses, so they can benefit from this agreement, stimulate economic growth and create jobs in Ukraine.
The EBRD and E.U. are also cooperating on DCFTA-related activities in Moldova and Georgia, the two other eastern European countries that have signed Association Agreements with the E.U.
These activities are part of the larger DCFTA Facility for SMEs, which will unlock new investments for small and medium-sized enterprises in the three countries, largely from new loans by international financial institutions, such as the EBRD and the European Investment Bank (EIB).
The EBRD is the largest international financial investor in Ukraine, the EBRD said. As of Jan. 1, the bank had a total cumulative commitment of €11.9 billion in 357 projects throughout the country.