GGF and Megabank sign USD 10 Million energy efficiency loan agreement

  • Megabank to expand EE loan product offering to SMEs
  • First GGF loan in Ukraine
  • Estimated annual reduction of energy consumption by 26,000 MWh and CO2 emissions by over 6,100 tons

Luxembourg and Kharkiv, 12 October 2012 - The Green for Growth Fund, Southeast Europe (GGF, the Fund) and PJSC Megabank (the Bank) in Kharkiv, Ukraine signed a USD 10 million loan agreement to expand the Bank's lending capacity for energy efficiency (EE) projects at the corporate as well as small and medium enterprise (SME) level. In the process of supporting the Megabank's strategy to significantly grow its EE portfolio, the loan will also strengthen the Bank's capacity to provide sustainable long-term EE financing. As Ukraine is heavily reliant on above-market priced oil and gas imports and its economy is consuming energy far above European average, fostering a shift towards greater energy efficiency is key. The Megabank deal is the GGF's first energy efficiency loan to a financial institution in Ukraine.

The GGF loan specifically targets the manufacturing and heavy industry sectors where obsolete and energy-consuming (inefficient) machinery needs to be replaced on a large scale. Megabank's portfolio of EE subloans to be funded by the GGF's USD 10 million loan is projected to save 26,000 MWh and produce CO2 reductions of over 6,100 tons per year. To illustrate the green benefits: it would take about 61 hectares of additional forest ten years to absorb the 6,100 tons of CO2 generated in one year.*

The loan will be accompanied by comprehensive support - provided by the GGF Technical Assistance Facility - in developing an EE lending strategy and attractive EE loan products, implementing a monitoring & reporting system, as well as in conducting energy audits. The main focus will be on lending to SMEs and corporate clients in the industrial and agricultural sectors where replacement of outdated equipment still holds a large energy and CO2 saving potential.

PJSC "MEGABANK" has been operating since 1990. Among the shareholders are the European Bank for Reconstruction and Development (EBRD), KfW (The German Development Bank) and the International Finance Corporation (IFC). Megabank is a universal bank with a strategic focus on the corporate sector, which accounts for almost half of the Bank's customer base, with increasing focus on micro, small and medium enterprises as well as agriculture and food-processing industry. The Bank has an extensive branch network with 189 offices in 24 regions of Ukraine.

"The GGF is delighted to launch its operations in Ukraine by working with Megabank, a solid financial institution with a well-diversified revenue base and strong presence throughout Ukraine. It is by working with institutions like Megabank, which is committed to growth in the EE sector, that we can maximize the Fund's outreach and achieve substantial development impact, while effectively contributing towards a reduction of Ukraine's energy consumption," said Christopher Knowles, Chairman of the Green for Growth Fund, Southeast Europe.

"Funds which will be allocated by the Green for Growth Fund will not only enhance the competitiveness of our bank, but also help the Ukrainian business to realize energy saving projects", said Olena Zhukova, Chairman of the Management Board of MEGABANK, PJSC.


* Source: www.prima-klima-weltweit.de

ABOUT THE GREEN FOR GROWTH FUND, SOUTHEAST EUROPE (GGF)

Initiated in December 2009 by the KfW Entwicklungsbank (The German Development Bank) and the European Investment Bank (EIB) with the financial support of the European Commission and the European Bank for Reconstruction and Development (EBRD), the Green for Growth Fund, Southeast Europe (GGF) is dedicated to enhancing energy efficiency and fostering renewable energies in Southeast Europe, including Albania, Bosnia and Herzegovina, Croatia, FYR Macedonia, Kosovo*, Montenegro, Serbia and Turkey as well as in the nearby European Neighborhood region comprised of Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. The GGF provides refinancing to financial institutions for on-lending to enterprises and private households for energy efficiency projects. The GGF also invests directly in specialist energy service companies (ESCOs) as well as energy service and supply companies, and renewable energy projects. The activities of the GGF are supported by a Technical Assistance Facility. The GGF is a public-private partnership with an investor base of donor agencies, international financial institutions and institutional private investors. The GGF is registered under Luxembourg law as a SICAV (variable capital investment company). The GGF is privately managed by Oppenheim Asset Management Services S.à r.l., Luxembourg, in concert with the fund advisor, Finance in Motion GmbH, Frankfurt/Main, Germany, and a technical advisor, MACS Management & Consulting Services GmbH, Frankfurt/Main, Germany.


* This designation is without prejudice to positions on status, and is in line with UNSC 1244 and the ICJ Opinion on the Kosovo Declaration of independence

ABOUT PJSC MEGABANK

Operating since 1990, as at the 1st September 2012 the MEGABANK's assets amount to UAH 4,402 million (EUR 440 million), whereas loan portfolio amount to UAH 3,610 million (EUR 361 million). The bank's capital is UAH 722 million (EUR 72.2 million). MEGABANK offers a full range of classical banking services used by 475,000 customers, including 128,000 recipients of pensions and other social benefits.MEGABANK's special feature is the Integral Clearing Center (ICC) on utility payments which was established to pay utility bills and is introduced in 9 regions of Ukraine. More than 2 million Ukrainian families (12 percent of all payers of Ukraine) pay their utility bills through the ICC system. Utility bills may be paid by a single receipt at cash desks of the bank, through e-terminals, so called "m-boxes", and through internet services at the ICC website.

MEDIA CONTACT

Green for Growth Fund, Southeast Europe
Christine Prütz
E: c.pruetz@finance-in-motion.com
T: +49 (0) 69 9778 7650-22

MEGABANK, PJSC
Yana Kutina
E: yana.sq@mail.ru
T: +38 057 758 66 72

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