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DEThe European Bank for Reconstruction and Development (EBRD) is providing a loan of up to €25 million to Ukrainian State Air Traffic Services Enterprise (UkSATSE), the country’s air navigation service provider. The agreement has been signed by Mark Magaletsky, Associate Director, Deputy Chairman of the EBRD in Ukraine, and Andriy Yarmak, Acting Director of UkSATSE. According to a press release of the bank, the EBRD is stepping in at a critical moment to support its long-standing client UkSATSE to help the company withstand the global economic crisis and prepare to return to normal operations in the future.
UkSATSE is not financed from the state budget, it functions only on its own funds, received for the air navigation services provided to the airlines, reads a press release of the company. As a result of the unprecedented crisis in the industry, the national air navigation service provider has been endangered by the loss of capacity to maintain its daily routine, and meet social obligations to its employees. The financing will address the liquidity and working capital needs of the company to maintain the uninterrupted provision of vital operations despite a significant reduction in air travel following the worldwide lockdown triggered by the coronavirus pandemic and public health measures to contain its spread.
“The intended use of the loan will be replenishment of the current assets for defray to the wage fund, mandatory payments and financing the operational costs, crucially important for the air navigation services provider. This will allow accumulating definite safety margin for the gradual recovery of the company from the crisis and will become the basis for the quality functionality of a strategic enterprise to the fullest extent,” stated Andriy Yarmak.
In addition, the EBRD solidarity financing will support the further integration of UkSATSE into the Eurocontrol Common Route Charges System, a system for the cost recovery of air traffic services, and Ukraine’s accession to the European Common Aviation Area agreement as well as ensuring the successful implementation of the Local Single Sky Implementation Programme.
The financing is part of the EBRD Solidarity Package, which focuses on ensuring the continuity of key services under threat by the economic impact of Covid-19. The EBRD expects to dedicate its total business investment of up to €21 billion in the period 2020-21 to combat the coronavirus crisis.
Ensuring vital infrastructure is a key challenge as providers face sharply reduced revenues while governments are forced to direct budget resources to emergency measures mitigating the consequences of the pandemic.
Matteo Patrone, EBRD Managing Director Eastern Europe and the Caucasus, said, “This is an important step to strengthen the Ukrainian air navigation service during and after the crisis. As the situation in many countries around the world remains highly volatile, it is crucial to secure the continuation of air navigation as well as prepare the provider for a bigger re-opening of air travel.”
The EBRD is the largest international financial investor in Ukraine. To date, the Bank has made a cumulative commitment of almost €14.7 billion through 468 projects since the start of its operations in the country in 1993.
