The project is composed of two main components:

Component 1: Partial credit guarantees (EUR 10 mln) – recipient executed trust fund (TF). The project will contribute to the capitalization of the new PCGF, with a sound independent governance framework, which will support credit-constrained farmers and significantly improve sustainability of the current credit guarantees, thereby providing the long-term benefits for agricultural development and food security.

Component 2: Technical assistance (EUR 1.2 mln) – Bank executed TF. The TA program focuses on (i) operationalization of the PCGF, (ii) Technical assistance aimed at increasing awareness of Ukrainian small farms of opportunities for agricultural and farmland-related investments and access to financial products offered by the banks participating in the PCGF (IFC-led) and (iii) Technical assistance aimed at incrementally improving the Ukrainian investment environment that approximates EU standards and enables successful access to banking products by non-bankable small farms.

The Project development objective (PDO) is to support the operationalization of the partial credit guarantee fund (PCGF) to help improve access to financing for small farmers.

The proposed development objective is expected to achieve the following outcomes.
a. The PCGF is fully operational as an independent financial institution regulated by the National Bank of Ukraine (NBU);
b. Number of small farms cultivating less than 500 ha of agricultural land access loans through the PCGF;
c. The total volume of outstanding loan portfolio at the end of each calendar year.