British International Investment

IFC Ukraine MRPA

Rest of the WorldGeneralist

IFC is a member of the World Bank Group and the largest global development institution focused on the private sector in developing countries.

Our investment

Description of the investment.

We partnered with IFC on their global trade programme for Ukraine. This $25 million risk sharing facility has been established specifically to support trade flow of essential goods into Ukraine. The facility aims to directly contribute to unlocking commercial trade between Ukraine and the rest of the world by restoring bank-to-bank intermediation, which is necessary for international trade but had become unavailable to Ukraine since the start of the war. In addition, the facility will support the restoration of Ukraine’s own trade flow which has also been critically affected by the war; including the country’s ability to source essential commodities so sustain livelihoods. The facility will bridge the trade finance gap as there is a limited number of confirming banks and guarantee providers in Ukraine.

Impact information

Applies to investments made from 2019 onwards. The tabs in this section define what we expect to achieve through the investment, assessing the potential impact of the investment against six dimensions of impact. You can find more details on our methodology of assessing impact here.

What?

Impact
  • Sustained or improved economic opportunities through increased availability of trade finance for businesses (SDG 8.1, 8.5, 8.10).

  • Sustained and potentially improved access to goods and services (SDG 1.4, 2.1)

How?

Primary Secondary

Economic enabler: The facility will support three underlining obligor banks in Ukraine, which will in turn enable the import of goods and services into the country. The benefits to the importing firms will be shared between the firm owners, employees, and suppliers.

Direct: Since the onset of war, the volume of imported goods into Ukraine has declined by 25 per cent, consumer prices have increased by 27 per cent year-on-year and one in four households has insufficient food consumption. This facility will enable increased access to goods for firms and individuals.

Who?

Stakeholder Geography Characteristics
Firm owners, employees and suppliers

100 per cent Ukraine

Goods imported include agricultural inputs, e.g. fertilisers, household appliances, consumer goods, computer and electronic products, and capital equipment.

Firm customers

100 per cent Ukraine

Given the increase in the number of Ukrainians living below the $6.85 per day poverty line, we can assume some low-income reach.

How much?

Scale Depth/Duration

We use trade enabled as a proxy. This facility may enable total trade volume of $100 million over 12 months.

Depth: This will vary depending on the goods imported and the stakeholder group benefiting. But we can surmise that due to the significant increase in the number of Ukrainians living below the $6.85 per day poverty line as well as the stress on firm performance, the depth of impact of this facility will be considerable.

Contribution/additionality

Contribution/additionality

Financial additionality: Capital is currently not offered, given the complete exit of commercial trade finance providers from Ukraine, following the outbreak of war in 2022.

Risk

External Risk
Alignment Risk
Drop-Off Risk

Impact score

Impact score (at point of investment)

The Impact Score is a tool to help us manage our performance against our strategic impact objectives. It is designed to incentivise investments that support our productive, sustainable, and inclusive objectives. You can find out more here.

The Impact Score is published for investments made from 2022 onwards. The Impact Scores are calculated at the point of investment. We publish the Impact Scores of new investments annually, once the information has been externally assured by an independent third party.

3

Environmental and social information

  • Environmental and social summary

    A high-level description of the environmental and social aspects of the investment. This may include a summary of key environmental and social risks identified during environmental and social due diligence (ESDD); key elements of an environmental and social action plan (ESAP); or ways in which we plan to support the investee improve environmental and social standards, such as through their environmental and social management system (ESMS); as well as any other priority areas agreed with the investee.

  • Environmental and social risk

    A risk category rating, which indicates the level of environmental and social risk associated with an investment. For an explanation of the categorisations used, see here. We consistently provide an environmental and social risk category for all investments screened from 2023 onwards.

Environmental and social summary

At the time of investment, BII and IFC environmental and social requirements for trade and supply chain finance are harmonised. We will continue to monitor E&S aspects related to the trades under this facility.

Environmental and social risk

Low

Reporting and Complaints Mechanism

The Reporting and Complaints Mechanism allows anyone outside BII to report alleged breaches of the business integrity or environmental and social provisions of BII’s Policy on Responsible Investing. This includes breaches made by BII, a BII investee, or a portfolio company of a fund in which BII has invested. The Reporting and Complaints Mechanism Rules are available here. Reports and complaints can be submitted by email to [email protected] or by mail. See more details on our Reporting and Complaints Mechanism here.

For any other general enquiries contact us at [email protected]

  • Key facts

    First published

    When the investment was first published on the website database.

    :
    March 2024
    Last updated

    When the last quarterly update of the website database occurred.

    :
    June 2024
    Project number

    An identifier number shared by investments in the same project.

    :
    D6278
    Status

    The current status of the investment (green flag for active and red flag for exited).

    :
    Active
    Region

    The geographical region where the country is located. We currently invest in Africa, South Asia, South East Asia and the Caribbean. In 2023, BII’s investment mandate was extended allowing it to invest in regional funds linked to Ukraine, with the majority of activity expected to begin post-war. Investments outside these regions were made prior to 2012 under previous investment mandates.

    :
    Rest of the World
    Country

    The countries where the investment delivers impact. Where impact is delivered in multiple countries, this is indicated.

    :
    Ukraine
    Sector

    We prioritise those sectors that facilitate development and need our capital the most. Our priority sectors contribute towards many of the Sustainable Development Goals. They range from investing in the power infrastructure that will provide people with better access to electricity, to investing in financial institutions that direct capital to the individuals and businesses that need it the most.

    :
    Generalist

    We provide capital in the following ways: directly – through direct equity, direct debt, guarantees and other non-intermediated financial instruments; and indirectly – principally through investment funds.

    For direct investments and fund investments, this is the date BII committed capital to the investments. This is typically the date on which legal agreements are signed by all parties.

    For the portfolio companies of our fund investments, this is the date (either the month or the quarter) on which the fund committed capital to the portfolio company.

    For direct equity investments, this is the date at which British International Investment exited the investment.

    For debt investments, this is the date at which the final debt repayment was made.

    For funds, this is the date at which the fund was terminated.

    For underlying fund investments, this is the date at which the fund manager exited the investment.

    The total amount committed, per financial instrument, per investment, on the date BII becomes subject to a binding legal obligation to provide funding or assume a contingent liability. This information is provided in US dollars.

    For direct investments, this is the amount that BII has committed to the business or project. For fund investments, this is the amount BII has committed to the fund.

    The currency in which the investment was made.

    Investment type :
    Guarantee
    Start date :
    December 2023
    Amount :
    $25m
    Currency of investment :
    USD
    Domicile

    The company or investment fund’s place of incorporation.

    :
    USA

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