Kyiv, Ukraine, July 21, 2023—IFC today announced new funding to strengthen the resilience of Ukraine's tech sector and a risk-sharing facility to increase access to finance for the country's smaller businesses. The support is part of IFC's $2 billion Economic Resilience Action (ERA) program, launched last year to preserve economic activity and job creation amid Russia's invasion of Ukraine.
Ukraine's tech sector has demonstrated remarkable resilience despite Russia's invasion of Ukraine, with the sector adding 180,000 jobs between 2017 and 2022, and 85 percent of Ukrainian developers working full-time. However, to maintain stable service delivery and continue expansion, the sector needs better access to capital.
In response, IFC, alongside its partner fund Horizon Capital, invested $5 million in Miratech —— a global IT services and consulting company that specializes in enterprise-level CX transformations, placing it at the forefront of its industry. The investment will help the company scale and create new jobs, ultimately enhancing the country's IT sector's resilience and competitiveness. The financing, provided from IFC's own account, builds on IFC's landmark $60 million investment in Horizon Capital aimed at supporting fast-growing businesses that need capital to fund expansion.
IFC will also support Ukraine's smaller and medium enterprises (SMEs), which have become increasingly vulnerable amid the deteriorating business environment. In 2021, they accounted for 99.97 percent of all businesses in Ukraine, generated around 60 percent of growth domestic product (GDP), and employed over 7 million people. During the second half of 2022, SMEs experienced significant losses, with only 6 percent operating at pre-invasion levels.
IFC is establishing €20 million risk-sharing facility for each OTP Bank and OTP Leasing to support SMEs, especially those in agribusiness or owned by women. IFC will share half the risk on an aggregate portfolio of €40 million extended to key segments of the Ukrainian economy. These are the first risk-sharing facilities in Ukraine under IFC's Small Loan Guarantee Program, supported by the European Commission, and will help preserve jobs, provide essential goods and services, restore supply chains, and generate exports and fiscal revenues.
"A strong private sector is key for Ukraine's economic revival. Ramping up access to finance for businesses is pivotal to counter the macroeconomic turbulence and supply chain disruptions currently hampering economic activity in the country," said Alfonso Garcia Mora, IFC's Vice President for Europe, Latin America and the Caribbean. "IFC is committed to ensuring access to credit and boosting innovation as the key preconditions for Ukraine's recovery."
The World Bank Group (WBG) has played a crucial role in supporting Ukraine following Russia's invasion, with more than 13 million Ukrainians benefitting from WBG initiatives that are helping businesses to stay afloat and enabling the Government of Ukraine to provide essential services, pay wages, keep schools and hospitals open, and make critical repairs. The WBG has facilitated over $37.5 billion in emergency financing, including commitments and pledges from donors. As part of this joint work, IBRD's (the International Bank for Reconstruction and Development) Public Expenditure for Administrative Capacity Endurance (PEACE) project has enabled the Government of Ukraine to sustain support for pensioners, teachers, government employees, first responders, and internal residents displaced by the war, while the multi-donor Ukraine Relief, Recovery, Reconstruction and Reform Trust Fund (URTF) is helping to address immediate needs in critical sectors such as transport, energy and health. IFC (the International Finance Corporation) launched a $2 billion Economic Resilience Action program to provide much-needed financing to the private sector, while MIGA (Multilateral Investment Guarantee Agency) has issued $142 million in guarantees. WBG institutions are collaborating across sectors like agriculture, energy, transport, logistics, and housing to support public and private financing for Ukraine's reconstruction.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.
For more information about OTP Bank, visit: https://www.otpbank.com.ua/
For more information about OTP Leasing, visit: https://otpleasing.com.ua/
For more information about Miratech, visit: https://miratechgroup.com/
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