The European Bank for Reconstruction and Development (EBRD) is mobilizing to support the Ukrainian energy sector, heavily affected by the Russian strikes.
With a budget of 300 million euros already allocated, the EBRD is preparing to sign several loan agreements with Ukrainian municipalities and companies in the coming weeks. These investments are aimed at restoring some of the damaged infrastructure, which is essential for securing the country’s energy supply as winter approaches.
Arvid Tuerkner, EBRD’s Managing Director for Ukraine and Moldova, points out that repairing damaged energy assets is a priority, although the future protection of these facilities remains complex due to their vulnerability to attack.
This financial support is crucial to offset the loss of energy capacity, estimated at around 50% since March 2023 as a result of the bombardments.
Challenges and priorities for the coming winter
In addition to emergency repairs, the EBRD plans to extend its support to Ukrainian municipalities via investment and liquidity funds.
A 25 million euro agreement with Kharkiv, one of the cities most affected by the conflict, is expected to be concluded by the end of the year.
This initiative depends to a large extent on the guarantees and subsidies provided by the European Union and other international partners, which are necessary to mitigate the risks associated with investments in these regions close to the front lines.
Coordination between donors is essential, according to Tuerkner, who stresses the urgency of these actions to manage the winter period.
Since the start of the Russian invasion in February 2022, the EBRD has deployed 4.65 billion euros in 107 projects in Ukraine, of which 855 million have been committed this year.
These investments are essential to support the Ukrainian economy, which is bearing the full brunt of the attacks on its critical infrastructure.
Economic outlook under pressure
Russia’s destruction of the energy infrastructure is having a direct impact on the Ukrainian economy, already weakened by the conflict.
EBRD plans to revise its economic forecasts for Ukraine, with a new assessment expected in September.
The country faces major challenges, particularly in terms of workforce management and securing energy supplies, two priorities identified by companies and lenders in Ukraine.
The EBRD had initially forecast 3% growth for the Ukrainian economy in 2024, following a contraction by a third in 2022 and a recovery to 5.3% in 2023.
However, these projections could be revised downwards due to the continuing impact of attacks on infrastructure.
Despite these uncertainties, the EBRD continues to play a key role in Ukraine’s economic stabilization, supporting projects aimed at strengthening the country’s resilience in the face of energy challenges.
