The European Bank for Reconstruction and Development (EBRD) has approved a financing package under which NPC Ukrenergo will be allocated EUR 372 million to support urgent repair of damage caused by Russian bombing of civil energy infrastructure.
According to the bank’s press release, the company will be provided with a state-guaranteed loan of EUR 300 million, as well as a grant of EUR 72 million from the Netherlands.
In particular, EUR 150 million is provided for the purchase of equipment for emergency recovery work, another EUR 150 million is provided for the support of the capital structure of the NPC. Separately, part of the emergency repair loan will be supplemented by a grant from the Netherlands.
“This will be blended into a single EUR 372 million package to support the immediate transmission infrastructure restoration needs of Ukrenergo,” the EBRD said.
The Bank says that EBRD investments in Ukraine are made with the support of donors and partners. The United States of America, which has contributed $500 million to the EBRD’s Crisis Response Fund and is strongly committed to addressing to the impact of the war on Ukraine, will support up to 50 per cent of the EBRD’s loan with a funded guarantee.
“Urgent repairs on Ukraine’s electricity network is an immediate priority for the EBRD. The Ukrainian people and businesses need continued access to electricity to go through the winter. With this important financing, we will help Ukrenergo perform swift emergency repairs of damaged equipment, high voltage substations and transmission lines. It will ensure the continued provision of vital power transmission services during the heating season for Ukrainian households, businesses and communities,” said EBRD President Odile Renaud-Basso.
“The EBRD condemns in the strongest possible way the unprovoked and unjustified Russia-led war on Ukraine and especially the strikes on civilian infrastructure,” the message reads.
The European Bank for Reconstruction and Development (EBRD) plans to close 2022 with investments in Ukraine of over EUR 1.5 billion, Matteo Patrone, EBRD Managing Director for Eastern Europe and the Caucasus, said at the Ukrainian Investment Roadshow conference last week in London.
Next year the EBRD is going to do as much, if not more, depending on how the situation develops, he said.
Patrone said that the EBRD typically invests around EUR 10-11 billion a year in its countries of operations, so the amount allocated to Ukraine shows its role for the bank.
The Managing Director explained that the EBRD is able to provide such significant funds because it takes part of the risk on its balance sheet, while donors cover the rest.
Patrone said that while this year a significant portion of funding went to support liquidity, next year, according to his forecasts, the share of investment funding will increase – not only for recovery, but also for new projects.
He, in particular, recalled the allocated funds for the new direct investment fund Horizon Capital and announced the project of a Polish investor being considered by the bank, which is already present in Ukraine and who wants to invest another EUR 40 million in the country.
Speaking about work in the near future, Patrone called for more focus not on the 10-year outlook, but on what will happen in the next 12-18 months, how to win the war on the economic front during this period.
According to him, the second important point is the coordination of Ukraine’s international partners, building an effective and efficient coordination platform for channeling funds to support the country with the participation of Ukraine.
And the third question worth mentioning is that not to lose focus on the reform agenda, both in the short and medium term, he said. Therefore, reforms, in particular, reforms in corporate governance, the rule of law, which have been discussed for the past six to eight years and where Ukraine has made significant progress, should remain in the spotlight, the EBRD Managing Director for Eastern Europe and the Caucasus said.
As reported, in 2021 the EBRD invested EUR 1 billion in Ukraine.
The State Service of Geology and Subsoil of Ukraine has signed a memorandum of technical assistance with the European Bank for Reconstruction and Development (EBRD), head of the State Geology Service Roman Opimakh said on his Facebook page on Wednesday.
“The document provides for work on digitization of secondary geological information, the development of IT architecture and the functionality of the State Geology Portal,” Opimakh wrote.
The memorandum was signed with EBRD First Vice President Jürgen Rigterink as part of the Raw Materials Week, which is taking place in Brussels with the support of the European Commission and the Ministry of Natural Resources of Ukraine. The signing took place in the presence of the Vice President of the European Commission Maroš Šefčovič and the Minister of Environmental Protection and Natural Resources of Ukraine Ruslan Strilets.
According to the document, the EBRD is the executor, the State Geology Service is the key beneficiary, and specialists of the State Research and Development Enterprise State Geological Information Fund of Ukraine (Geoinform of Ukraine) are the contractors of the project, the head of Ukraine’s Geology Service noted.
“The work is designed for three years and provides for the purchase of equipment and the arrangement of a server room in the first half of 2023 – ventilation, physical access, uninterrupted power supply,” Opimakh informed.
Also next year, at least 20,000 geological information storage units will be digitized and published on the State Geology Portal in accordance with the best world practices.
“The implementation of the project will not only digitize and place secondary geological information in the public domain, but also significantly improve the interface for searching geological reports through interactive maps that will be posted on the State Geology Portal,” the head emphasized.
At the same time, the translation of abstracts, reports and an English-language search engine will become convenient tools for foreign investors interested in the development of Ukrainian subsoil.
According to Opimakh, the key objectives of the project are, in particular, digitization of at least 60,000 units of storage of geological reports, the development of IT infrastructure, the creation of English-language services of databases for managing geological information, the arrangement of a server room, as well as the development of the functionality of the State Geology Portal by creating sets of geological maps and cartographic services of the geological knowledge of the territory of Ukraine.
“The next step will be the signing of an agreement on the provision of technical assistance and the coordination of parameters for the volume and time of work,” the head said.
European Bank for Reconstruction and Development (EBRD) in 2022-2023 will send up to EUR3 billion to Ukraine, the bank’s president, Odile Renaud-Basso, said following a meeting with Ukrainian President Volodymyr Zelensky in Kyiv on Friday.
“I told the President that our commitment is long-term and we are investing up to EUR3 billion in 2022-2023 to support the economy, the private sector and the urgent reconstruction of vital infrastructure,” the head of the EBRD said in a tweet.
According to her, over the current year, the total volume of EBRD investments in Ukraine will amount to more than EUR1 billion.
The European Bank for Reconstruction and Development is one of the largest institutional investors in the Ukrainian economy. In 2021, he invested EUR1 billion in the country.
The International Finance Corporation (IFC) from the World Bank Group will enter the capital of a new fund managed by Horizon Capital – Horizon Capital Growth Fund IV (HCGF IV) with a contribution of $30 million, and the European Bank for Reconstruction and Development (EBRD) – with a contribution of $50 million.
According to the information on the corporation’s website, the project has been approved and the relevant documents are awaiting signing, this will be the first IFC investment in Ukraine since the start of a full-scale war that began in February 2022.
The EBRD clarified that its board of directors approved entry into HCGF IV on 6 September.
The target size of the new fund is $250 million. IFC specifies that the fund will invest primarily in fast-growing technology and export-oriented mid-cap companies operating in Ukraine and Moldova and competitive in the global market.
The fund is expected to invest $10-30 million to acquire minority stakes in 10-15 mid-cap companies worth $50-150 million.
According to the materials, HCGF IV is the successor to Emerging Europe Growth Fund III (EEGF III, 2017) and will follow a similar investment strategy focused on IT services and products, as well as e-commerce, innovative consumer products and fintech.
IFC recalls that it invested in EEGF III and EEGF II (2008), while the EBRD was an investor in EEGF III and EEGF II, as well as HCGF II.
IFC’s participation in the fund with equity capital, in an environment where the fund will not be able to raise this money in the market after the start of the war, will be critical to achieving the minimum first close of $100 million, and IFC’s continued participation will allow it to reach the final size of $250 million, the report says.
“This is a landmark event – despite the war, IFC decides to allocate money for investments in Ukraine. This should be a positive signal for other potential investors: you can and should start investing in the Ukrainian economy now,” the First Vice President commented on the IFC decision. Prime Minister of Economy of Ukraine Yulia Sviridenko.
According to the Ministry of Economy, the German Investment and Development Corporation (DEG), the Swiss Investment Fund for Emerging Markets (SIFEM), the Dutch Financial Company for Emerging Markets (FMO), the Western NIS Enterprise Fund, the Rockefeller Foundation are also planning to join the HCGF IV fund. and others.
Horizon Capital is a large investment company that manages five private equity funds (more than 40 institutional investors) with assets of $1.1 billion, including WNISEF (with a capital of $150 million), Emerging Europe Growth Fund (EEGF, $132 million), EEGF II ($370 million) and EEGF III ($200 million), as well as HCGF II ($258.3 million). The resources of these funds are invested in projects in Ukraine and Moldova.
The company currently has two founding partners, CEO Lenna Koszarna and head of investment committee Jeffrey Neal. The company’s offices are located in Kyiv and Chicago.
The European Bank for Reconstruction and Development (EBRD) has amended the agreement on the ongoing Dolinskaya – Nikolaev – Kolosovka Railway Electrification Project, which will allow additional use of part of the EBRD loan in the amount of EUR98.5 million to provide liquidity to finance critical needs of JSC “Ukrzaliznytsya” (UZ).
Finance Minister Serhiy Marchenko, EBRD Director for Eastern Europe and the Caucasus Matteo Patrone, and Ukrzaliznytsia Board Chairman Oleksandr Kamyshin signed the corresponding documents on Thursday, the Finance Ministry reported.
The repurposed portion of the EBRD loan will be secured by a guarantee from the French government or another G7 country.
“Damage and destruction of the railway infrastructure, loss of Ukrzaliznytsia’s rolling stock have a negative impact on ensuring the smooth operation of the society. Therefore, an increase in the EBRD loan to support the liquidity of Ukrzaliznytsia will help maintain the stability of its work in war conditions,” Marchenko commented on the agreement.
As reported, earlier this year, on June 10, similar amendments to the agreement were already signed, according to which EUR50 million was directed to support the liquidity of Ukrzaliznytsia. Thus, the total volume of the EBRD loan for the liquidity of UZ reached EUR 148.5 million.
