Since the beginning of June, the banks have received 1,975 applications from businesses requesting a total of UAH 46.4 billion in loan financing for energy infrastructure reconstruction projects. UAH 5.8 billion worth of applications have already been approved (agreements have been or are about to be signed). The gross portfolio of loans taken out by legal entities to meet their energy needs totals UAH 972 million.
This is according to the results of an NBU survey that polled 20 banks about the loans they made between 1 June and 1 September 2024 to finance business projects to restore energy infrastructure.
Specifically, in August:
- 781 applications for a total of UAH 7.3 billion were filed
- 808 applications worth a total of UAH 2.2 billion were approved
- 224 loans totaling UAH 523 million were granted.
The loans made to businesses have since June financed a total of 97.4 megawatts (MW) of capacity (according to early data that covers about 85% of the portfolio). Most of the funds went towards the construction of solar power plants (32 MW) and the purchase of diesel and gasoline generators (33 MW) and gas-piston cogeneration plants (18 MW). The projects being funded are located in 21 of Ukraine’s oblasts.
The banks are also lending to households. Over the past week, they have received 405 loans totaling UAH 27 million. The gross portfolio of loans made to individuals to address their energy needs currently stands at UAH 89 million.
“From the example set by the joint lending push to help the energy sector, we have seen just what the banking sector is capable of when it acts as one. The volume of the loans granted to businesses and households is growing by the week in a surge that has pushed the gross portfolio over UAH 1 billion. The project is gathering speed. Loan disbursements have started in 21 oblasts. It’s a very good outcome,” said NBU Governor Andriy Pyshnyy.
Be reminded that with the NBU’s facilitation, 20 banks that together hold over 85% of the sector’s net assets signed a memorandum in June 2024 to finance energy recovery. The banks’ offers cater to the needs of different SMEs, large businesses, and households. In particular, entrepreneurs can raise financing for projects to build solar power plants, wind farms, biogas power plants, gas-turbine and gas-piston power plants, and to purchase industrial batteries, storage devices, and more.
The base lending rate under the memorandum starts at 13.5% per annum (or UIRD3M + 0.5% for the first year of financing, and no more than UIRD12M + 3% thereafter).
As per its Lending Development Strategy, the NBU is keeping a balance between tightening the requirements for banks – so that they remain resilient – and maintaining their ability to lend to the economy in general and enhance their capability to finance the rebuilding of power generation capacities in particular.
To this end:
- for the duration of martial law and the year after it expires or is lifted, temporary specifics of credit risk assessment have been established for specialized loans that facilitate the financing of investment projects by banks
- increased collateral liquidity ratios have been introduced for energy equipment and distributed generation equipment that is accepted as collateral against loans made after 1 June 2024 to purchase said equipment.
The new capital requirements are to be implemented within a one-year transition period allocated to help save room for stepping up lending.
On top of that, the NBU jointly with the banks is working to unify the consortium lending mechanisms in order to use this tool to implement large-scale recovery projects going forward