IFC Supports Ukraine’s Ukrgasbank to Boost Financing for Green Energy

IFC, a member of the World Bank Group, is supporting Ukrgasbank on its way to privatization, as it seeks to boost financing of sustainable energy and energy-efficient projects, including those developed by small and medium enterprises.

The privatization will be the first for a large state-owned bank in Ukraine. IFC’s new €30 million loan will incentivize the bank’s transformation enhanced by IFC’s option to convert the loan into equity shares. Since 2017, IFC has helped Ukrgasbank prepare for privatization by strengthening its corporate governance practices, commercializing its operations, and reducing state involvement in decision-making. Driven by the sound corporate governance, commercially based operations, and focus on sustainable finance, Ukrgasbank’s transformation can be used as an example for future bank privatizations in the country.

Ukraine is among the world’s most energy-intensive economies, partly due to its large industrial base. The country has supported global climate initiatives over the last two decades and is now looking to both enhance energy efficiency in its industries and increase the share of renewables in its energy mix. IFC’s loan will help achieve this by financing Ukrainian businesses to modernize to save energy costs and reduce environmental footprints.

“We are grateful to IFC for the long-standing partnership, and highly appreciate their decision to become our investor. This is an important step in the Ukrgasbank privatization strategy and towards the reduction of the state share in the banking sector. We are confident that through this partnership we will implement the world’s best practices at the bank and make it even better for both the clients and the partners,” said Andrii Kravets, the Chairman of the Board of JSB “Ukrgasbank”.

“The withdrawal of the state from the capital of Ukrgasbank is one of the tasks of the Ministry of Finance under the implementation of the public banking sector reform. Today’s agreement is one of the key steps to achieve this goal. The implementation of this transaction is also a fulfillment of one of Ukraine’s commitments under the joint Stand-by program with the IMF. It will be a strong signal to all investors that the country is carrying out its obligations to reform Ukraine's banking sector and build a sustainable banking model based on the international best practices,” said Sergii Marchenko, the Minister of Finance of Ukraine.

Stephanie von Friedeburg, Interim Managing Director, Executive Vice President, and Chief Operating Officer, IFC, said: “We are excited to build on our long-standing partnership with Ukrgasbank and support this turning point for Ukraine’s banking industry. Our financing aims to help Ukrgasbank prepare for its privatization and become a standard setter on green finance, while paving the way for a resilient recovery in Ukraine through more efficient institutions and increased private sector participation.” 

Since 2016, IFC’s advisory work, in partnership with the Austrian Federal Ministry of Finance and the Ministry of Economic Affairs and Climate Policy of the Netherlands, has helped Ukrgasbank become Ukraine’s first climate-finance bank and will continue working with the bank on developing new markets for green finance in Ukraine. In addition, as part of IFC’s work with the Energy Efficiency Fund—launched in partnership with the European Union and Germany—IFC has helped Ukrgasbank design products to enable homeowner associations implement energy-efficiency upgrades.

IFC’s SME banking advisory, in partnership with the Swiss State Secretariat for Economic Affairs SECO, helped the bank increase its SME loan portfolio by 2.5 times, thus becoming one of Ukraine’s leading banks serving that sector. Since 2017, under IFC’s Global Trade Finance Program, the bank has supported more than $105 million of cross-border trade-finance transactions, supporting import and export of goods, essential to Ukraine’s economy.

IFC’s partnership with Ukrgasbank is also part of its efforts to attract private investment into Ukraine’s financial sector and boost the country’s economic growth.

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 2020, we invested $22 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org.

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About Ukrgasbank

Ukrgasbank is a universal bank in Ukraine operating a country-wide network of nearly 270 branches with over 4 000 employees servicing more than 2.2 million individuals and over 75 000 corporate and SME customers. It is the fourth largest bank in Ukraine by assets with a 9% market share. The bank focuses on financing projects that contribute to the efficient use of resources, reduction of CO2 emissions and renewable energy development. The bank is currently the leader in financing clean energy facilities in Ukraine, with more than one third of green loans in its portfolio. The green projects financed by the bank contribute to carbon emissions reduction by more than 1.4 million tons a year. 

For more information about IFC’s development partners, visit:


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