The National Bank of Ukraine has granted NEFCO the right to open current accounts in the local currency Hryvnia (UAH) in Ukrainian banks. This will enable NEFCO to use local accounts when making loan transactions in UAH to, in particular, small-scale projects implemented by Ukrainian municipalities.
“We are very pleased with this decision, which will make it easier for us to run our daily business and provide loans to our customers in Ukraine. In particular, this will reduce the currency risks related to our projects,” says Executive Vice President Torben Vindeløv at NEFCO.
Up until now, all of NEFCO’s loans to Ukrainian companies and municipalities have been disbursed in EUR from the Corporation’s Head office in Helsinki, Finland. This arrangement has led to currency risks, since NEFCO’s Ukrainian customers and borrowers earn most of their revenues in UAH. Small and medium-sized companies and local municipalities, in particular, have expressed an interest in receiving loan financing in UAH in order to reduce their currency risks.
“To start with, we will provide loans in UAH mainly for small-scale projects, which are implemented by Ukrainian municipalities. Larger projects will still be financed in EUR,” says Chief Investment Adviser Julia Shevchuk at NEFCO’s office in Kyiv.
NEFCO expects to disburse approximately EUR 10-15 million annually to finance Ukrainian projects with environmental benefits. Despite the rather small overall size of NEFCO’s investments, the projects are expected to have an important catalytic effect, especially in the energy efficiency sector.
NEFCO currently has 125 projects in the Ukrainian pipeline. In the municipal sector, NEFCO has granted loans to seven municipal energy efficiency projects. About 40 project applications are currently being administered and handled by the Corporation’s staff in Kyiv.