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Dutch fund invests €4.5 million in Bank Lviv, as first foreign investor in Ukrainian bank since 2022 invasion

The government-run Dutch Good Growth Fund (DGGF) has invested €4.5 million in Bank Lviv, marking the first foreign investment in a Ukrainian bank since the full-scale Russian invasion of 2022.

The bank’s largest current shareholder, impact asset manager responsAbility Participations, based in Switzerland, added a €1 million investment, bringing Bank Lviv's total capital increase to €5.5 million, the bank said in a press release.

The DGGF, run by Triple Jump and PwC for the government of the Netherlands, was the first foreign investor to receive Ukrainian central bank permission to buy stakes in a Ukrainian bank since the February 2022 invasion, Bank Lviv said.

The bank didn't disclose the size of the stake the fund will take. In January of 2022, a month before the Russian invasion, the Nordic Environment Finance Corporation (Nefco) took a 13.94% stake in Bank Lviv as part of a €8.4 million share capital increase.

After that transaction, Bank Lviv was 48.56% owned by responsAbility and 37.47% by Icelandic banker Margeir Petursson.

Bank Lviv, which focuses on lending to small and medium-sized enterprises in western Ukraine, ranked 30th out of Ukraine's 64 banks by assets last year, with assets of €252 million and a €170 million loan portfolio.

Last month, the European Bank for Reconstruction and Development (EBRD) announced it would extend a local-currency loan worth the equivalent of €20 million to Bank Lviv, for the financing of private small- and medium-sized enterprises.

And in 2023, the US International Development Finance Corporation (DFC) provided $20 million in loan guarantees via Bank Lviv to finance more than 12,000 microenterprises and 1,000 SMEs over five years. It had already provided a 15 million guarantee, which resulted in 500 new loans to Ukrainian businesses, the DFC said.

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