Since the beginning of the full-scale war, the European Bank for Reconstruction and Development (EBRD) has invested approximately EUR5bn in Ukraine, of which approximately EUR2bn is aimed at energy projects, including in the field of renewable energy, said Olga Yeremina, associate director, senior banker in the bank’s energy department.
“Since the beginning of the war, the bank has invested about EUR5 billion in Ukraine, of which roughly EUR2 billion is aimed at energy projects,” Yeremina said during the ReBuild Ukraine international conference in Warsaw, quoted in a release on the European-Ukrainian Energy Agency’s website on Tuesday.
According to her, the EBRD is open for new investments in the RES sector in Ukraine, noting the improvement of the regulatory environment and harmonization of reforms with EU requirements, but there are problems with the sustainability of projects, including in terms of guaranteed buyback of electricity, uncertainty of revenue streams and instability of the electricity market.
For his part, as noted in the release, EUEA board member, GOLAW partner Oleksandr Melnyk presented the concept of the Market Risk Guarantee Fund initiated by the agency together with the Ukrainian Wind Energy Association.
“The Fund, which will be established by international financial institutions, will protect private RES companies from fluctuations in the electricity market by ensuring a minimum electricity price,” Melnyk explained.
According to Yeremina, the Fund could become the main driver of investment, contributing to the sustainability of Ukraine’s energy system and accelerating the implementation of projects from RES.
The release points out that according to the National Energy and Climate Plan, by 2030 Ukraine should double the current 10 GW of RES capacity, which will be facilitated, among other things, by the Market Risk Guarantee Fund.
As reported in September 2024, the EBRD has provided EUR4.6bn to the Ukrainian economy since the start of Russia’s full-scale invasion of Ukraine, including at least EUR1bn to energy companies Ukrenergo, Naftogaz and Ukrhydroenergo.
In June, it was reported that the German company GOLDBECK SOLAR Investment and the EBRD are creating a joint venture GOLDBECK SOLAR Investment Ukraine to implement projects for the construction of 500 MW power plants in Ukraine over the next three to five years.
GOLDBECK SOLAR Investment was to receive a EUR5 million loan from DEG (Deutsche Investitions-und Entwicklungsgesellschaft) for its commitment in Ukraine through the ImpactConnect program initiated and financed by the German Federal Ministry for Economic Cooperation and Development (BMZ). Planning for the construction of the first solar park is due to start in the fall of 2024.
This is the EBRD’s first equity agreement in Ukraine’s energy sector since the full-scale invasion by the Russian Federation.
The European Bank for Reconstruction and Development (EBRD) is providing Kormotech, a leading Ukrainian pet food producer, with a financing package to increase exports and geographic diversification by building a second pet food plant in Lithuania, the EBRD press service reports.
According to the release, the total cost of the Kormotech project will be EUR63 million.
The allocated financing package is a EUR40 million A/B syndicated loan, of which EUR20 million will be provided by the Dutch SDG-focused asset management fund ILX Fund.
The bank has previously provided EUR 15 million to Kormotech Group, a long-standing EBRD client, for the construction of its first plant in Lithuania, which began operations in June 2020. The bank also provided a EUR3.3 million loan to the company to replenish working capital during the Covid-19 pandemic in 2020.
The EBRD loan is accompanied by grant financing, including a grant from the Japan-EBRD Cooperation Fund, which partially covers the costs of external lawyers. The grant funding will also partially cover the cost of new workplace equipment that will create new livelihoods for groups that need more attention, including women and people with disabilities. This component is being implemented as part of the EBRD’s new program aimed at stimulating capital investment.
The loan is provided to the Group’s holding company Vengast Investments Ltd (Cyprus) and its subsidiary in Lithuania, Kormotech UAB.
The EBRD is the largest international financial investor in Ukraine. Since the beginning of the war in 2022, the bank has provided EUR 5 billion to the Ukrainian economy and agreed with shareholders to increase capital by EUR 4 billion, which will allow it to continue lending at current levels during the war and further increase volumes during the full-scale recovery phase.
Kormotech is a global family-owned company with Ukrainian roots that has been producing cat and dog food under the Optimeal, Club 4 Paws, Woof! and Meow! brands since 2003. The company has production facilities in Ukraine and the EU, with a product range of over 650 items. Its focus on exports and geographic diversification helps it withstand the impact of Russia’s war against Ukraine.
The new project will also help Kormotech strengthen its human resources and skills development efforts in light of the current challenging situation on the Ukrainian labor market, including creating new employment and training opportunities for women, veterans, and other groups that require more attention. It will also enable Kormotech to improve energy efficiency.
In 2023, Kormotech’s turnover increased by 22.5% to $152 million from $124 million in 2022. The ratio of sales abroad and in Ukraine in tons is now 31% to 69%, respectively (in 2022 it was 28% to 72% in Ukraine).
Kormotech brands grew most dynamically in the markets of Romania (+35%), Poland (+11%) and Moldova (+11%).
Kormotech is a leader in Ukraine, one of the world’s top 50 pet food producers and one of the top 21 most dynamic pet food brands. The ultimate beneficiaries of Kormotech are Olena and Rostyslav Vovk.
The European Bank for Reconstruction and Development (EBRD) is exploring the possibility of creating by the end of 2024 – early 2025 a system of war risk insurance for domestic transportation and goods transported in Ukraine, said Francis Malizh, EBRD managing director in the financial institutions sector.
“We are considering the possibility of war risk insurance for transport, domestic transport, which should come to the market at some point, probably by the end of the year or early next year,” Malizh said at the second annual forum ‘Ukrainian exports: the window opens’ organized by the Economic Pravda publication.
He specified that the new model of insurance against military risks may apply to trucks and railroad cars. Also, it will serve to insure goods in transit in the country.
The European Bank for Reconstruction and Development (EBRD) and OTP Leasing have agreed on a new EUR40 million credit line, the company’s CEO Andriy Pavlushin said after a meeting with Ukrainian banks and financial companies organized by the EBRD in London.
“We agreed today on a new EUR40 million line, and we will sign it soon. There will be cashbacks for companies owned by veterans or war victims of up to 20% of the financing amount,” he wrote on his Facebook profile.
Pavlushyn noted that since the beginning of this year, OTP Leasing has financed $125 million worth of products, which, according to him, is 50% more than in 2023. The CEO emphasized that instruments from the EBRD significantly contribute to this result.
OTP Leasing provides financial leasing and fleet management services to corporate clients and micro, small and medium-sized enterprises across the country. The ultimate owner of the company is OTP Bank Plc. (Hungary).
Khmelnytsky Municipal Enterprise Electrontrans has signed an agreement with the winner of a tender for the supply of new trolleybuses funded by the European Bank for Reconstruction and Development (EBRD), a combination of Chernihiv Automobile Plant LLC and Politechnoservice LLC (Kyiv region), Khmelnytsky Mayor Oleksandr Symchyshyn said.
“We have signed an agreement with the winner of the tender for the purchase of 42 new trolleybuses. This will allow us to almost completely renew the trolleybus fleet and not return to this issue for years,” Symchyshyn wrote on Facebook.
As reported, on January 10, 2024, Electrotrans, together with the EBRD, announced a tender for the purchase of 44 units of new trolleybuses, as well as spare parts and diagnostic equipment, under the EBRD’s Green Cities program. Later, the number of trolleybuses was updated to 42.
In April 2023, the EBRD announced a EUR10.6 million loan to Khmelnytskyi’s Electrotrans for the purchase of trolleybuses, maintenance and diagnostic equipment. It was noted that the EBRD loan is part of a financial package that also includes investment grants from the EU and the US totaling EUR 4.45 million.
“For these funds, we are purchasing 44 trolleybuses along with spare parts and diagnostic equipment,” Symchyshyn wrote, adding that the winner of the tender for the purchase of 42 trolleybuses offered a lower than expected price, which allows the city to buy two more trolleybuses with the saved funds.
According to him, the plant is to deliver 42 trolleybuses to Khmelnytsky within 62 weeks, including 34 with a range of up to 2 km and eight trolleybuses with a range of up to 20 km.
The first five trolleybuses are to be delivered by the end of 2024.
The Etalon low-floor trolleybuses with electronics from Politechnoservice are equipped with air conditioning for the driver’s and passenger compartments, a screw compressor to reduce noise in the cabin, an information system, and USB connectors for charging phones.
“All the power electronics of the vehicles, as well as the autonomous driving systems, are made in Ukraine,” said Symchyshyn.
The project “Framework Program for the Development of Public Transport in Ukraine 2, Khmelnytskyi Trolleybus” is part of the EBRD’s Green Cities program, which Khmelnytskyi joined in 2019.
The European Bank for Reconstruction and Development (EBRD) plans to provide EUR140 million in guarantee financing to state-owned PrivatBank (Kyiv), which will cover up to 50% of the credit risk on new loans of EUR400 million in equivalent.
According to information on the bank’s website on Thursday, its board of directors intends to consider this project on July 24, 2024.
It is specified that the guarantee funding will be provided to PrivatBank in two equal tranches, each of which will provide partial coverage of risks under new loans worth EUR 200 million, while only one tranche has been agreed upon so far.
The project also provides for a sub-limit of up to EUR 60 million to finance long-term investments by micro, small and medium-sized enterprises (MSMEs) to modernize technologies and equipment in accordance with EU standards, including investments in sustainable and green technologies (70% of the sub-limit), thereby increasing the competitiveness of enterprises.
It is noted that eligible sub-borrowers will also receive EU-funded technical assistance and grant support in the form of investment incentives after the completion of investment projects.
According to the EBRD website, the financing is intended primarily to support Ukrainian companies in primary and secondary agriculture, as well as other critical sectors necessary to ensure the country’s energy security.
“At the same time, priority will be given to MSMEs and corporate borrowers investing in projects that increase energy security and efficiency in Ukraine,” the release says.
As reported, EBRD Vice President Matteo Patrone and PrivatBank CEO Gerhard Bösch signed a letter of intent to start working on a risk-sharing agreement during the Ukraine Recovery Conference in Berlin on June 11-12.
According to the National Bank of Ukraine, as of May 1, 2024, PrivatBank ranked 1st in terms of assets (UAH 857.00 billion) among 63 banks operating in the country. The financial institution’s net profit last year amounted to UAH 37.8 billion. The EBRD notes that the state-owned bank’s network currently includes 1,200 branches across the country, 6,800 ATMs and 1,040 terminals.
