The European Bank for Reconstruction and Development and PJSC Ukrnafta have signed a EUR 80 million loan agreement. The document on the loan to support the energy infrastructure was inked in London on December 6, 2024, in the presence of the First Deputy Prime Minister of Ukraine, and Minister of Economy of Ukraine Yuliia Svyrydenko, and EBRD First Vice President Jürgen Rigterink.

“The European Bank for Reconstruction and Development has been a reliable partner of Ukraine for many years. Today's agreement is the first transaction within the framework of a large investment package for public and private companies approved by the Bank's Board of Directors on December 4. The EUR 80 million loan to Ukrnafta will help build a new modern gas generation facility that will strengthen Ukraine's energy resilience,” said Yuliia Svyrydenko.

The EBRD loan will also be co-financed by investment grants of EUR 9.5 million from the Netherlands and EUR 12.5 million from the United States of America, channelled through the EBRD Special Fund, thus enabling Ukrnafta to build additional gas-fired distributed generation capacities.

The financing provides for the supply and installation of gas-fired distributed power plants and cogeneration capacities with a total capacity of approximately 100 MW in different regions of Ukraine.

“In the context of russia's continuous attacks on energy facilities, new capacities will be an important element in meeting current energy needs and ensuring long-term stability,” said Serhii Koretskyy, Director of Ukrnafta.

“The start of cooperation with the EBRD is the starting point of a new stage, a distinction for the entire national management team, a total of twenty thousand employees. This means that Ukrnafta meets the high requirements of the EBRD for its clients, has passed a thorough due diligence and compliance. On behalf of the entire company, I am very proud that we have moved to a new level of international cooperation.”

The loan agreement between the EBRD and Ukrnafta is the first transaction within the EBRD's investment package for Ukraine worth more than EUR 1.3 billion. The funds of the package are intended to implement projects to restore energy and transportation infrastructure, develop distributed generation, and improve energy efficiency. In total, the EBRD investment package provides funding for eight projects to support the public and private sectors.

Background information

The European Bank for Reconstruction and Development (EBRD) is currently implementing more than 200 projects in Ukraine worth more than EUR 5 billion. Last year, the EBRD lent a record EUR 2.1 billion to the country, up from EUR 1.7 billion in 2022. The EBRD, which is the largest institutional investor in Ukraine, has significantly increased its investments since the russian invasion in February 2022 and in October 2023 exceeded its goal of investing EUR 3 billion in Ukraine during 2022-2023.

Also in 2023, the EBRD's management decided to increase the Bank's paid-in capital by EUR 4 billion to EUR 34 billion to further support Ukraine. Investments in Ukraine during the war are planned to continue at around EUR 1.5 billion per year, with the capital increase providing the opportunity to double this amount when the time comes for recovery.

During 2022-2023, the EBRD also managed to mobilize around EUR 1.6 billion in donor funds for Ukraine, including unfunded guarantees. More than EUR 409 million of this amount was disbursed in 2023 alone. Almost half of the donor resources were provided by the European Union. Significant contributions were also made by individual donors, including Canada, Norway, Spain, and the Netherlands.