NEC Ukrenergo and the European Bank for Reconstruction and Development signed an agreement on a EUR70mn target grant to the company from the bank’s Special Fund provided by the government of the Kingdom of the Netherlands, NEC CEO Volodymyr Kudrytskyy said.
As Kudritsky explained on his Facebook, the funds will be used exclusively to purchase the equipment needed to resume the reliable operation of Ukraine’s energy infrastructure.
“We are grateful to our international partners for such a high level of confidence in our company and strong support in the restoration of Ukraine’s energy system. We are now actively working with manufacturers around the world to deliver the necessary equipment as soon as possible,” said the head of Ukrenergo.
As earlier reported, at the beginning of December, NEC Ukrenergo noted that it had attracted EUR300 mln of credit funds from the EBRD, EUR150 mln of which would be allocated for the purchase of equipment necessary for substations that have been subject to massive Russian missile strikes.
The rest EUR150 mln of the EBRD loan will be used to replenish Ukrenergo’s working capital, in particular, to fulfill the company’s financial obligations in the electricity market amid the non-payments that arose in the market because of the war.
At the same time, there was also talk about attracting EUR72 million in grant funds from the Netherlands to restore networks and improve the financial stability of the company.
European Bank for Reconstruction and Development (EBRD) will provide ArcelorMittal Kryvyi Rih PJSC (AMKR, Dnipropetrovsk oblast) with a $100mn loan to replenish its working capital.
“The loan will be used to finance the company’s working capital needs to ensure business continuity in Ukraine,” the bank said in a statement Thursday.
According to it, the bank’s board of directors approved the project at a meeting on Dec. 14.
The EBRD recalled that it provided financing to AMKR in 2017, developed a comprehensive Environmental and Social Action Plan (ESAP) and monitored its implementation by PESM, making monitoring visits to the company in recent years.
“Overall, the company was on track for implementation and reported as required. The provision of working capital under the concept of sustainability of Ukraine will allow, among other things, to continue investment plans and implement the existing ESAP, which, in turn, will significantly improve the environment, health and safety at the site,” – pointed out the bank.
The EBRD clarified that a key aspect of the current investment program is the modernization of the sinter plant, and this investment process is ongoing, with work on the sinter lines as well as the air treatment facilities, but some investments planned for 2022-2023 have been postponed due to the ongoing war and the proximity of the front.
“ArcelorMittal Krivoy Rog is the largest producer of rolled steel in Ukraine. It specializes in the production of long products, particularly rebar and wire rod, and is owned by ArcelorMittal.
On November 24 this year, after the blackout caused by Russian missile attacks on the energy infrastructure, AMKR reported about critical limitation of electricity consumption and suspension of most of the production processes. According to the company, the available amount of electricity is not enough to maintain production even at 20% of capacity.
In addition, on the night of December 5, AMKR was hit by a Russian missile strike.
The European Bank for Reconstruction and Development (EBRD) may lend state-owned Ukreximbank up to EUR50 million to finance private corporate clients and municipalities in Ukraine affected by the war.
“The loan will provide Ukreximbank with much-needed medium-term financing during wartime and will allow the bank to support its private corporate clients and municipalities using its strategic focus, proven experience in corporate lending to critical sectors and strong regional presence,” the bank said in a statement Wednesday.
According to it, the project will be supported by donors: EUR25 million of first-loss risk coverage will be provided by the EBRD’s Special Crisis Response Fund as part of the EBRD’s special Ukraine War Response Package.
Ukreximbank was founded in 1992. The sole owner of the financial institution is the state.
According to the National Bank of Ukraine, as of July 1, 2022 Ukreximbank in terms of total assets ranked third (228.608 billion UAH) among 68 operating banks in the country, or about 10% of total assets of the banking system.
The bank has 51 branches across the country and two representative offices in London and New York.
The European Bank for Reconstruction and Development is negotiating with municipalities in the de-occupied territories and is ready to support them, EBRD President Odile Renaud-Basso said in an interview with Interfax-Ukraine.
“Supporting municipalities is one of the key priorities of the bank’s support in Ukraine. We recently signed a technical cooperation agreement with the city of Mariupol to conduct a loss and needs assessment, which will form the basis of preparations for the reconstruction of the city. We are negotiating with other municipalities, including recently de-occupied territories, and are ready to support them,” she said.
So far, the EBRD is working with a total of 19 municipalities across the country.
“Right now our focus is liquidity financing, but where possible we also continue to support priority investments,” Reno-Basso reported.
The full text of EBRD President Odile Renaud-Basso’s interview with Interfax-Ukraine will be published on the website.
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.
