Netherlands and EBRD funnel €370mn to repair Ukraine’s transmission systems
In an effort to repair damages on Ukraine’s transmission systems from Russian bombings, the Netherlands and EBRD are providing a financing package of €370 million ($392 million) to support Ukraine’s electricity transmission company, Ukrenergo, make swift emergency repairs.
The European Bank for Reconstruction and Development (EBRD) announced the package to keep the country’s energy system stable as Winter sets in. Russian attacks on the country’s power systems have been increasing in frequency, causing widespread blackouts.
EBRD President Odile Renaud-Basso signed the deal on 13 December last year.
As part of the package, the EBRD is providing a sovereign guaranteed loan of €300 million ($318 million) including two components. Up to €150 million ($159 million) is allocated for equipment procurement to implement emergency repairs to the Ukrainian power transmission system. A further €150 million consists of capital structure support.
Separately, the emergency repairs part of the loan are complemented by a grant for up to €70 million ($74 million) provided by the Netherlands. This will be blended into a single €370 million package to support the immediate transmission infrastructure restoration needs of Ukrenergo.
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“Urgent repairs on Ukraine’s electricity network is an immediate priority for the EBRD. The Ukrainian people and businesses need continued access to electricity to go through the winter. With this important financing, we will help Ukrenergo perform swift emergency repairs of damaged equipment, high voltage substations and transmission lines. It will ensure the continued provision of vital power transmission services during the heating season for Ukrainian households, businesses and communities,” stated Renaud-Basso.
“We are working to commit the loan funds at the earliest opportunity, given that the winter season has already started and the stability of the country’s energy system is strategically important,” added Managing Director for Eastern Europe and the Caucasus Matteo Patrone.
As part of more than €1 billion ($1 billion) provided to Ukraine so far this year, the EBRD earlier repurposed a €147.2 million ($156.1 million) infrastructure loan to Ukrenergo as emergency liquidity funding, with risk-sharing for the first €50 million ($53 million) tranche from the European Union’s EFSD (European Fund for Sustainable Development), the financing arm of the EU External Investment Plan and from the United Kingdom for the second tranche.
As well as bolstering energy security, EBRD funding for Ukraine goes towards trade finance to maintain the flow of essential goods, food security and vital infrastructure.
