The War Economy: How Corporate Business Survived the Second Year of War
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According to the results of 2023, the GDP of Ukraine increased by 5% after falling by 28.8% in 2022, this preliminary estimate gives Ministry of Economy.
The fastest pace of recovery was demonstrated by public administration and defense thanks to priority funding, construction with recovery projects in mind, agriculture, domestic trade and processing industry.
In order to ensure the operation of strategic sectors in the conditions of war at the state level, during 2022-2023, the relocation of production facilities, support for the creation and development of processing enterprises, industrial parks, and the implementation of further steps in the direction of European integration were carried out.
As you know, as early as 2020, the Ministry of Strategic Industries of Ukraine developed the draft Resolution “On some issues of the development of the industrial complex of Ukraine”, which lists 17 strategic branches of industry.
The main ones are: agro-industrial complex, fuel and energy industry, defense industry, transport industry and construction/building materials industry.
Support of strategic industries
After the start of hostilities, the state-owned Ukreximbank immediately concentrated on supporting the most important sectors of the economy. For this, the Bank flexibly uses its capabilities and product line, promptly changing it even in such difficult times.
In general, for 2023, in the segment of corporate business, Ukreximbank concluded new credit agreements and agreements on the provision of documentary transactions for more than the equivalent of UAH 11 billion.
Separately, it is necessary to note the significant support of the Bank in 2023 to the direction of the agro-industrial complex of Ukraine (new credit agreements more than the equivalent of UAH 5 billion), Ukrainian industry (the equivalent of UAH 2.5 billion of new credit agreements), and wholesale and retail trade (the equivalent of UAH 3 billion of new credit agreements).
APC support. The experience of “Radekhiv Sugar” LLC, the largest sugar producer in the western part of Ukraine and one of the largest Ukrainian sugar exporters, shows that a reliable financial arm during the war becomes decisive for agribusiness and food security in the domestic and foreign markets.
At the end of 2022, the sugar producer received long-term working capital financing from Ukreximbank.
In 2023, Ukreximbank increased the credit limit of “Radekhiv Sugar” LLC. A new credit line for 18 months in the amount of USD 10 million. The USA supplemented the loan in the amount of 15 million dollars. USA, which the company already uses.
Funds for refinancing working capital were provided under a joint project with the International Bank for Reconstruction and Development.
Construction industry. Ukreximbank, as the largest creditor of corporate business in the country, provides comprehensive assistance to the cement industry for the purpose of rebuilding the country.
During 2023, the Bank provided Ivano-Frankivskcement PJSC with UAH 600 million to finance working capital for the operational needs of the business, and together with the European Investment Bank, a limit of UAH 500 million was established for the increase of railway rolling stock – Ukrainian-made hopper cars in order to expansion of own transport and logistics capabilities for cement delivery.
The provided financing made it possible to increase cement production in 2023 by 32% to 3.7 million tons.
In addition, in the summer of 2023, for the Ivano-Frankivsk Cement Group, together with the International Bank for Reconstruction and Development, the Bank provided CAPEX financing in the amount of UAH 700 million for the purpose of building a new plant of dry construction mixes in the Ivano-Frankivsk Region.
The implementation of this project will make it possible to provide the Ukrainian market with high-quality domestic building materials already in 2024, since the main production of dry building mixes owned by the international corporations KNAUF and ETEX in the Donetsk region were destroyed as a result of military operations.
Energy security. During 2023, Ukreximbank provided financial support to the UPG group of companies, which is one of the top 5 suppliers of critical for the state import of fuel and lubricants, within the credit limit in the amount of 90 million USD.
Within the framework of the specified volume of financing, the Bank, as the key state financial institution of Ukraine for export and import operations, together with leading MFIs and foreign banks, implemented 25 agreements on post-import financing of the purchase of fuel to meet the needs of the domestic market of Ukraine, which became a guarantee of energy security and sustainable development of the state .
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