The EU-funded FinancEast programme has announced the results of first four months of its operation. From December 2019 to April 2020, the European Union provided UAH 123.5 million in subsidies and compensation to micro, small and medium-sized enterprises (MSMEs) in the government-controlled territories of Donetsk and Luhansk regions. The programme provides for the reimbursement of up to 50% of the cost of investment projects for instance for leasing or loans to purchase agricultural machinery, equipment and vehicles, installation, construction or reconstruction of buildings.
"Donetsk and Luhansk regions need now more than ever assistance and investments for sustainable economic and social recovery," says Ambassador Matti Maasikas, Head of the EU Delegation to Ukraine. “We have already made a good start: since the beginning of the year, EU4Business FinancEast has funded almost 70 micro- and small business investment projects. This figure will now grow with the help of the European Union grant."
FinancEast is implemented by the German State Development Bank KfW and the Business Development Fund within the framework of the “EU Support to the East of Ukraine” project and the European Union's EU4Business initiative. Its main partners are OJSC Oschadbank and OTP Leasing. In particular, since the start of the programme, Oschadbank has provided funding for the implementation of 24 investment projects in loans worth UAH 66.5 million, of which the EU has compensated UAH 32 million. In turn, OTP Leasing financed 43 investment projects totalling UAH 176.5 million, of which the EU compensated UAH 91.5 million. The share of investment projects from the Luhansk region was 58%, and from the Donetsk region - 42%.
"We are aware of the importance of economic growth in the Donbas region," said Andriy Martemyanov, FinancEast Coordinator. “Ukrainian government-controlled territories of the Donetsk and Luhansk regions have suffered significant economic losses, so our goal is to restore the investment attractiveness of these regions. It was for this purpose that we initiated the implementation of the FinancEast programme. The number of received applications and already financed MSME investment projects shows that in the first months of the programme it has become an important part of the process of restoring the economic development of Donbas."
To implement the programme, the European Union has allocated a grant of EUR 9.5 million. FinancEast started on December 20, 2019 and will continue until 2022 or earlier if all funds are used. Oschadbank and OTP Leasing continue to actively receive applications from MSMEs to finance investment projects. More details about the programme can be found on the website.
Background information:
The Business Development Fund was created on the basis of the German-Ukrainian Fund, which was founded by the German State Development Bank KfW, the Cabinet of Ministers of Ukraine and the National Bank of Ukraine.
The EU4Business is an EU initiative that supports a private sector in the Eastern Partnership countries, including Ukraine. It aims to improve a business climate through offering professional advice and access to financing for small and medium-sized businesses. Support under the EU4Business initiative is provided jointly with other organisations. The initiative promotes economic growth and job creation.
