The European Investment Bank (EIB) Group is planning new loans totaling EUR450 million for Ukrainian energy investments, including the reconstruction of hydroelectric power plants and power grid infrastructure damaged by Russian attacks, as well as the restoration of district heating networks in Ukrainian cities.
According to a press release on the bank’s website, another EUR 86 million will go to Ukraine’s national power grid operator, NPC Ukrenergo, to build drone shelters for power plants.
“We are stepping up our support to help protect and repair Ukraine’s infrastructure before winter,” the release quotes EIB President Nadezhda Calvigno as saying, “On July 22, she briefed EU foreign ministers on these measures and held a regular video conference with Ukrainian Finance Minister Sergii Marchenko to discuss progress on ongoing projects, especially in energy infrastructure.
According to her, the bank will also expand its support for Ukraine’s economy by facilitating access to finance for businesses and promoting trade with the EU.
In the business finance component of the latest support package, the EIB Group approved three partial portfolio guarantees, which are expected to lead to more than EUR 110 million in new lending to Ukrainian micro, small and medium-sized enterprises through three Ukrainian banks. It is specified that the guarantees are to be signed in the second half of 2024 with the respective banks and will support 550 Ukrainian companies, preserving about 8,250 jobs.
In addition, the EIB Group intends to provide partial portfolio guarantees to five more banks in Ukraine by the end of the year under the EU4Business Guarantee Facility, the release said.
According to the release, this week the EIB is also joining forces with Ukrsibbank, the Ukrainian subsidiary of BNP Paribas Group and one of Ukraine’s largest banks, to launch a revolving credit line of at least EUR150 million in Ukrainian hryvnia to support businesses affected by the war. The local currency facility is expected to be operational by the end of 2024. This is the EIB’s second initiative to stimulate local currency lending in Ukraine, following a partnership with Citibank Ukraine for between $50 million and $100 million in Ukrainian hryvnia.
In addition, the release notes, by the end of this month and following the signing of an agreement with the European Commission in June, the European Investment Fund (EIF) will start accepting applications under a EUR300 million export credit guarantee facility to support EU companies trading with Ukraine. The initiative will offer guarantees to export credit agencies in EU member states, as well as Norway and Iceland, that want to help export to Ukraine.
Following a videoconference on July 22, the Ministry of Finance of Ukraine announced that it expects the EIB to approve a EUR250 million package of support for Ukraine’s energy sector in the near future.
In general, according to the Ukrainian side, the volume of EIB initiatives in the public sector is 26 projects worth EUR 5.3 billion, and the volume of the portfolio of joint projects in the public and private sectors is the largest for all years of cooperation and exceeds EUR 7 billion, including about EUR 2 billion of EIB investments in all areas since the beginning of the full-scale war.
Regarding current initiatives, the parties also discussed preparations for the signing of a financial agreement between Ukraine and the EIB on the project “Implementation of the Emergency Assistance System for the Population by a Single Number 112”, as well as potential joint projects, in particular, aimed at providing housing for Ukrainian citizens.
As reported, in 2024, Ukraine and the EIB signed a Memorandum of Understanding on cooperation in the public and private sectors of Ukraine’s economy. The Memorandum identifies priority areas of cooperation for the next 10 years.
