The war in Ukraine has had a noticeable impact on German companies. The sharp increase in energy prices is a burden for many companies. The sanctions are also having an impact on the economic situation of companies in Germany. On April 8, Federal Economics and Climate Protection Minister Robert Habeck and Federal Finance Minister Christian Lindner presented a comprehensive package of measures for companies particularly affected by the war. The first two programs are now ready to go:
- The extensions to the Federal-state guarantee programs for companies demonstrably affected by the Ukraine war have already started. This affects the guarantee banks and the large guarantee program. Applications can be made here since April 29th 2022 be asked. The decision on the application will only be made after the subsidy approval. The Federal Government is in advanced talks with the EU-Commission.
- That KfW-Loan program, sog. „KfW-Sonderprogramm UBR 2022″ to secure the short-term liquidity of the companies demonstrably affected by the Ukraine war, will start shortly. Companies of all sizes and sectors have access to low-interest loans with the house banks being largely exempt from liability. In addition, a syndicated financing variant with substantial risk assumption is offered. This program starts expected on May 9, 2022. Here, too, the federal government is in advanced state aid talks with the EU-Commission.
“With the necessary sanctions, we are hitting Vladimir Putin’s regime. But companies in Germany are also suffering from the consequences of the Russian war of aggression. They need short-term liquidity to cushion the situation. That’s why we want these companies with one KfW-Assist with special program and enhanced sponsorship programs. We support the affected companies in a targeted manner. At the same time, we handle taxpayers’ money responsibly. The aid will be limited. As shock absorbers, they should prevent structural breaks without dissolving market forces.”
Federal Finance Minister Christian Lindner
“After two years of the corona pandemic, the war in Russia is adding a new burden that is affecting the economy. The war against Ukraine and its economic ramifications are a reminder that we are vulnerable. The strength of liberal democracies, however, is that we strive for balance and thus come to solutions that move us forward together. We show week after week that democracies in particular are capable of performing and acting in the face of war and crises and have quickly adapted and countered this new situation with a series of measures. We will resolutely continue along this path and step by step free ourselves from the bracket of Russian imports. At the same time, the federal government is doing everything to preserve the substance of our economy, even in difficult times, with a targeted protective shield for our companies, which we are now implementing quickly.”
Federal Economics and Climate Protection Minister Robert Habeck
„Die KfW has repeatedly helped in its more than 70-year history to master special challenges. In addition to the corona pandemic, the consequences of the terrible war in Ukraine are now being felt more and more throughout our society. We are already supporting communities with an aid program KfW– Means for the accommodation of refugees. Together with the federal government, we are now also supporting companies in Germany that are suffering from the consequences of the war.”
Chairman of the Board of KfWStefan Wintels
More information about the programs:
1. Key points of the KfW-Special program UBR:
KfW-Loan program with two program components
- one for loans in the standard procedure via house banks up to a loan amount of 100 Mio. Euro,
- one for individual, large-volume syndicated financing.
Who is sponsored?
Small, medium and large companies with no sales size limit
What is funded?
Investment and working capital loans. the KfW grants the house banks one
- 80% exemption from liability for loans to medium-sized companies (up to max. 500 Mio. EUR annual turnover) and
- 70% liability release for loans to large companies.
This increases the banks’ willingness to lend.
What are the entry requirements?
Proven concern resulting from the sanctions against Russia and Belarus or the acts of war in Ukraine
- Decline in sales due to a collapsed sales market
- proven production losses in the countries of Ukraine, Belarus and Russia
- proven production losses due to a lack of raw materials and preliminary products
- Closure of production facilities in Russia, Ukraine or Belarus
- particularly affected by the increased energy costs (energy cost share at least 3% of annual sales 2021).
Which conditions apply?
Loans with the following characteristics:
- max. 6 year term
- up to 2 repayment-free start-up years
- 6 years fixed interest rate
Reduced interest rate in the standard procedure depending on the company’s creditworthiness, the collateralization of the loan and the refinancing conditions on the capital market. The current interest rate is the KfW page refer to.
As part of the syndicated financing option, individual credit structures with a term of up to 6 years. the KfW accepts the conditions of the financing partner.
program limitation
That KfW-Lending program is eligible under the European Commission’s Temporary Crisis Framework for State Aid (“Temporary-Crisis-Framework“) until December 31, 2022.
2. Key points of the large guarantee programs
Who is sponsored?
companies from 20 Mio. Euro guarantee requirement in structurally weak regions and from 50 Mio. Euro guarantee requirement outside structurally weak regions
What can be vouched for?
Working capital and investment loans can be guaranteed. The guarantee rate is usually 80%, in particularly affected individual cases up to 90%.
What are the entry requirements?
Proven concern resulting from the sanctions against Russia and Belarus or the acts of war in Ukraine, e.g. through
- Decline in sales due to a collapsed sales market
- proven production losses in the countries of Ukraine, Belarus and Russia
- proven production losses due to a lack of raw materials and preliminary products
- Closure of production facilities in Russia, Ukraine or Belarus
- particularly affected by the increased energy costs (energy cost share at least 3% of annual sales 2021).
Program limitation:
The Extended Large Guarantee Scheme is eligible under the European Commission’s Temporary Crisis Framework for State Aid (“Temporary-Crisis-Framework“) until December 31, 2022.
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