The European Bank for Reconstruction and Development (EBRD) launched the Enterprise Security Enhancement (ESE) pilot program on May 11, 2026, to provide partial debt relief for Ukrainian borrowers whose assets are destroyed by war. The initiative operates through PrivatBank and Raiffeisen Bank Ukraine to address gaps in the war-risk insurance market.
This mechanism targets capital expenditure (capex) loans for fixed assets rather than working capital. The EBRD will utilize donor-funded grants to compensate these partner banks for credit losses incurred when they forgive portions of loans held by verified war victims, ensuring businesses can reinvest instead of carrying liabilities for destroyed property.
Total pilot allocations are set at €8 million, with €6.8 million designated for state-owned PrivatBank and €1.2 million for Raiffeisen Bank Ukraine. The EBRD confirmed that the pilot is funded by the Bank’s Shareholder Special Fund, with future expansions expected to involve the European Commission under the Ukraine Investment Framework.
PrivatBank currently serves over 18 million individuals and 910,000 business clients, while Raiffeisen Bank Ukraine remains the country’s largest private lender. The program includes strict anti-double-compensation rules and minimum damage thresholds to ensure funds reach those without other recovery options.
Mikael Björknert, CEO of PrivatBank, highlighted the necessity of such protections during an interview with Kyiv Post in April. He noted that many companies have hesitated to invest due to the lack of coverage for physical destruction.
“After a while, you really need to start renewing. Otherwise, your business will go down,” stated Mikael Björknert, CEO of PrivatBank.
The CEO further emphasized that the new mechanism will allow businesses to continue operating and reinvesting funds even under constant shelling. He pointed out that investment-related requests accounted for roughly 40% of the bank’s loan applications last year.
According to the Ministry of Economy, Ukraine requires over €5 billion annually in war risk insurance to attract private capital for national recovery. The ESE pilot serves as a response to deteriorating business sentiment reported by the European Business Association in early 2026 due to ongoing strikes on civilian infrastructure.
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