The European Bank for Reconstruction and Development (EBRD) says it has signed an agreement with Ukrgasbank of Ukraine worth a total of US$40 million to support Ukrainian businesses with the aim of stimulating regional and international trade.

The facility is provided under EBRD's letter of credit (L/C) oriented Trade Facilitation Programme (TFP), which has been running since 1999.

TFP benefits

Ukrgasbank is Ukraine's fourth largest bank with a network of nearly 250 branches.

The facility will be partially earmarked for factoring operations to support the development of this product by Ukrgasbank.

According to EBRD, by joining the TFP, Ukrgasbank will become better integrated into the regional and global economy through the development of stronger trade links and relationships between companies and banks in the EBRD's region of operations and beyond.

L/C support

Through the TFP, EBRD provides guarantees to international confirming banks, taking the political and commercial payment risk of international trade transactions undertaken by banks in its countries of operations.

EBRD guarantees payment under trade finance instruments issued or guaranteed by local issuing banks to international confirming banks.

Trade finance instruments include L/Cs and other types of guarantees, bills of exchange or promissory notes, performance bonds and bid bonds.

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