The European Bank for Reconstruction and Development (EBRD) will provide transmission system operator NPC Ukrenergo with EUR97.3 million in support of liquidity in the face of Russia’s military aggression.
“The EBRD and the Ukrainian authorities have agreed to change the purpose of the remaining EUR97.3 million from an existing loan to Ukrainian electricity transmission system operator Ukrenergo. The new purpose of the funds is to maintain the company’s liquidity,” the bank said in a press release on Friday.
It clarifies that in this way the bank will repurpose part of the EUR149 million loan provided in 2019 to support liquidity to modernize key elements of the electricity transmission infrastructure in order to support the stable operation of the system and synchronize with European electric networks, as well as to help Ukraine bring its legislation and operating principles in accordance with the requirements of the Third Energy Package of the EU.
“Due to the war, Ukrenergo has urgent liquidity needs, so the company has asked to repurpose the undrawn funds. This liquidity support from the EBRD will ensure the stable operation of the Ukrainian energy system, nuclear and renewable energy generation capacities, as well as the supply of electricity to industrial consumers and population,” the release notes.
The EBRD notes that during the war, the company faced significant customer defaults and a 30% drop in electricity consumption, resulting in a loss of revenue.
At the same time, they specified that up to half of EUR97.3 million would be guaranteed by a sovereign donor from the G7 countries.
The bank noted that the support provided is part of the EUR1 billion investment it promised before the end of the year to support the Ukrainian economy on the terms of risk-sharing with donors and partners.
The release recalls that in May Ukrenergo already received EUR50 million as part of the reassignment of a previously granted loan.
Ukrenergo reported that these funds were used to repay debts in the ancillary services market, and also noted that it was counting on new reprofiling of loans to support liquidity, in particular, to repay debts in the balancing market.
