In June 2023, the National Bank of Ukraine allowed Ukrainian corporate borrowers, during the existing cross-border payment moratorium, to make payments to development finance institutions ("DFIs") (e.g., foreign export credit agencies and state development institutions). However, the relaxation explicitly prohibited borrowers from making any early repayments, whether voluntary or resulting from acceleration in the case of an event of default. This restriction posed a significant challenge for DFIs in taking decisions to provide financings to Ukraine, while international financial institutions (e.g., EBRD, IFC, NIB, NEFCO, BSTDB &c.) are fully exempted from the payment moratorium.
Responding to requests from DFIs, on 6 October 2023 the National Bank of Ukraine expressly permitted early repayments in any form for DFI loans executed after 20 June 2023. This is an extremely important development because, given a lack of financings from international private banks and closure of external bond markets for Ukraine, the role of foreign development institutions of various ally countries, along with the international finance institutions, is pivotal in supporting and rebuilding Ukraine.
We are pleased to say that the joint efforts of the American Chamber of Commerce in Ukraine and Redcliffe Partners in advocating these changes have produced a successful result.
