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Ukrgasbank: Ukraine’s leading eco-bank

The Ukrainian Ministry of Finance announced its intention to privatize Ukrgasbank in 2018-2019, most likely in the autumn. This is due to the strong performance of the bank over recent years, which has seen Ukrgasbank become the fourth biggest in Ukraine by assets and the number one eco-bank.

While the top management of Ukrgasbank has led a remarkable turn-around of the company over the last few years, transforming it into one the best performing and most profitable Ukrainian banks, this story remains largely unknown in the West

The Ukrgasbank Story

Established in 1993, Ukrgasbank focuses on 4 main business sectors: corporate business, SME, retail and premier banking. With over 240 branches in Ukraine, the bank now has 23 regional offices in 153 cities and towns. These branches cater to over 900,000 retail customers, 43,000 SME customers, and 8,000 corporate members.

In November 2017, Ukrgasbank signed a Memorandum of Understanding (MOU) with the International Finance Corporation (IFC) and the Ministry of Finance of Ukraine, which was intended to help set the stage for the privatization of Ukrgasbank, Ukraine’s fourth-largest lender. The partnership is a key component of IFC’s strategy to establish a transparent and competitive process for the privatization of the country’s state-owned banks, to increase credit growth, and significantly reduce the high number of non-performing loans. The partnership will also help strengthen the corporate governance of the bank, as well as increase the investment attractiveness of the bank.

Regarding pre-privatization support, the IFC has also helped Ukrgasbank strengthen its corporate governance, ensure its operational autonomy and refine its commercially driven banking model. 

Starting a Green Banking Revolution

Given the bank’s objective of becoming the region’s biggest eco-bank, Ukrgasbank has a very strong reputation in the area of green finance. Ukrgasbank became the first partner from Ukraine to join the Carbon Pricing Leadership Coalition, an international community of climate leaders brought together with the goal of putting in place effective carbon pricing policies that maintain competitiveness, create jobs, encourage innovation, and deliver meaningful emissions reductions.

The Ukrainian economy is one of the most energy-intensive in the world and requires immediate modernization. In 2016, Ukrgasbank, in cooperation with the IFC, started to develop green banking in Ukraine. Today, Ukrgasbank is the first and only bank in the region with a focus on green finance. Since the inception of the project, Ukrgasbank has financed more than 330 projects for corporate clients and SMEs in an amount that exceeds €400 million. These projects eliminate nearly 900 thousand tons of CO2 emissions a year. Indeed, every 3rd megawatt in 2017 and every 2nd megawatt in the first quarter of 2018 generated under feed-in tariff in Ukraine was financed with the support of Ukrgasbank.

Source: Ukrgasbank

“Today, Ukrgasbank is the first and only bank in the region with a focus on green finance”

Kyrylo Shevchenko, Chairman of Ukrgasbank

Ukrgasbank has also signed a number of other agreements with the IFC around various green issues. This includes agreements around green finance and providing easier access to funding for companies intending to implement projects in renewable energy, energy efficiency, and environmental protection.

The bank has also worked hard to cut its exposure to the nuclear power industry and has reduced its exposure to the state nuclear company by over 40 percent since the MOU with the IFC. The bank is planning to have zero exposure to the nuclear industry by year-end.

Since the signing of the Paris Agreement in 2015, green banking has become a central focus for the bank. Ukrgasbank is now in the process of joining wider networks of green banks.

Ukrgasbank is therefore set to play a crucial role in strengthening the energy security of Ukraine by helping Ukrainian companies to save energy, reduce greenhouse gas emissions, and contributing to the country’s sustainable development.

Supporting the SME Sector

An agreement signed in April this year between Ukrgasbank and the IFC around SME banking services promises to significantly boost economic growth and job creation in Ukraine. The agreement positions Ukrgasbank as the most important bank in the Ukrainian SME sector and will see the bank help SMEs in a variety of ways including restructuring and business model support, training, facilitating access to credit, and streamlining operational systems.

The SME sector is an increasingly important and growing sector in Ukraine, and independent experts have marked the potential profitability of SME business in the country at 5.7 billion Ukrainian hryvnias ($210 million). As a result of this agreement, Ukrgasbank is expected to increase its earnings in the service sector by 300-400 percent in the next four years.

Corporate Governance

Improving the corporate governance at the bank was a major strategic decision made in 2015. Independent advisors were added to the supervisory board, to ensure maximum transparency and increase trust from customers in the bank. These decisions were made despite there being no legal recourse to do so.

Ukrgasbank Objectives

  • To prepare for privatization in 2018-19.
  • To become the region’s leading green bank, and to cover 30 percent of the demand for financing green energy projects in Ukraine.
  • To use green banking as a competitive advantage.
  • Focus on specific sectors for SME and corporate businesses.

Investor information

  • Ukrgasbank is ranked fourth by assets among the largest banks of Ukraine.
  • Profits are expected to reach over $20 million this year
  • Despite a tumultuous economic situation in the country, Ukrgasbank became profitable in 2015 despite loses of about $90 million at the start of 2014.
  • Ukrgasbank is now Ukraine’s largest green bank
  • Three main target areas in green banking for the bank are energy efficiency, renewables, and emission reductions.
  • According to the World Bank, the investment potential of these areas is estimated to be $70 billion in the next 15 years.
  • Every second megawatt of renewable energy that is installed in Ukraine is financed by Ukragasbank.
  • Ninety percent of projects in Ukraine in renewables, energy efficiency and environmental protection go through our bank.
  • Due to the projects financed by the bank so far, carbon emissions in Ukraine have been reduced by 800,000 tons. This is the equivalent of removing 390,000 cars from the roads.
  • Ukrgasbank’s green portfolio now totals around $400 million.
  • According to an agreement between Ukraine and the EU, the share of renewable energy in Ukraine must reach 11 percent by 2020. We’re currently at 1.2 percent. There is, therefore, a huge opportunity to engage in this area.
  • The decentralization project being enacted by the current government provides numerous opportunities for the bank, and therefore to investors. Ukrgasbank has already carried out several projects with various municipalities in Ukraine and would be interested to involve partners.


Over the last year, Ukrgasbank has been voted as the leading «Eco-Bank» 3 times for the implementation of the environmental and energy efficiency projects in the ratings of leading Ukrainian financial media.

  • Ukrgasbank was rated the best bank in Ukraine for servicing small and medium businesses by Personal Account Magazine.
  • Ukrgasbank was voted best in the category «Savings Deposit» and among the three leading banks of Ukraine, according to the annual «50 leading banks of Ukraine» rankings by the Financial Club.
  • Ukrgasbank was rated as one of the three of the most reliable banks of Ukraine by Personal Account.
  • RA ‘Standard-Rating’ evaluated the bank to be in the top-10 most reliable banks in Ukraine category.
  • Ukrgasbank became the only state bank to enter into the TOP-10 banks category and had the highest rating of deposits’ reliability, according to Standard Rating.
  • Ukrgasbank was recognized to be the best «Eco-Bank» in the special «Financial Oscar» edition of BUSINESS.
  • It was recognized as the leading Eco-Bank of the year in the annual «Bank of the Year» competition by the International Banker
  • The Chairman of the Board of Ukrgasbank was recognized as the best top manager in the field of finance by Focus Magazine.
  • Ukrgasbank received an award from Mastercard for the unique card products (ECO-card and «Fan Card»).

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