The US International Development Finance Corporation (DFC) issued a $40 million loan portfolio guarantee to Raiffeisen Bank that will allow the bank to issue $50 million in loans to micro, small and mid-size businesses in Ukraine over the next eight years.
The DFC guarantee, developed with technical support from United States Agency for International Development (USAID), will cover up to 80% of the risk of default on loans made by Raiffeisen Bank to qualified borrowers under the guarantee, the bank said in a press release.
The DFC is increasingly active in Ukraine, having contributed $250 million to a $480 million loan to help MHP, Ukraine's largest chicken producer, refinance debt, boost output and expand its agricultural waste-to-energy facilities. It is also expected to offer insurance on a $195 million bond next year for Ukrainian state nuclear power generator Energoatom.
Ukrainian Economy Minister Yulia Svyrydenko also said earlier this month after a meeting with DFC CEO Scott Nathan in Washington, DC that the DFC plans to send a special representative to Ukraine to help foreign investors find insurance and financing to participate more easily in the reconstruction of the country.
