Business news from Ukraine

“Kyivpastrans has again announced tender for purchase of trolleybuses for EUR50 mln with EIB financing

Kyivpastrans, as part of the implementation of the European Investment Bank-financed program “Urban Public Transport of Ukraine”, has announced a new tender for the purchase of 12m and 18m trolleybuses for a total amount of up to EUR50m.

According to the announcement published in the Official Journal of the EU, to which the AllTransUA portal refers, it is planned to purchase low-floor trolleybuses, as well as the necessary spare parts, tools and equipment.

Disclosure of the bids is scheduled for July 31. The first batch of trolleybuses should be delivered in 24 weeks after the receipt of the advance payment by the supplier, and the entire contract is designed for 78 weeks.

As reported, under this loan agreement with the EIB, Kiev has already tried twice to purchase trolleybuses – the tender announced in November 2022 failed, and the one announced in August 2023, with bids submitted by the Czech Republic’s Škoda and Turkey’s Bozankay, was recently finally canceled, according to AllTransUA.

“Unfortunately, just like last time, single and two-section trolleybuses are to be delivered within one lot, and the quantity ratio is not specified in the announcement. This creates exactly the same problems as last time, when Ukrainian manufacturers could not participate, and foreign manufacturers offered a purely formal number of two-section trolleybuses (1 and 3 pcs.),” – notes AllTransUA.

As reported, the EIB and Kyiv Mayor Vitaliy Klitschko on December 10, 2021 signed a loan agreement for EUR100 million for the project of renewal of the trolleybus fleet, as well as the car fleet of the capital’s metro. This was the first loan from the EIB in Ukraine offered directly to the city without state guarantees.


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European Investment Bank is ready to assist Ukraine in launching social housing programs

The European Investment Bank (EIB), in cooperation with the European Commission (EC), is ready to assist in launching social housing programs, Oksana Remiga, EIB Senior Lending Specialist, said in an interview with Interfax-Ukraine.

The Ministry of Infrastructure and Regional Development is currently engaged in housing policy reform, which aims to harmonize Ukrainian practices with the best European ones. One of the points that is only touched upon in the draft law, but is necessary to harmonize the overall framework, is social and affordable housing; a separate law will be developed in the future.

“The EIB, in cooperation with the European Commission, has pledged to provide assistance to launch this area. We are discussing the possibility of a EUR 200 million targeted loan, which will be supported by a significant investment grant from the EC. Plus a technical assistance package of EUR12 million, which can be used not only to develop technical solutions, implement and monitor them, but also to help develop the regulatory framework,” Remiga said.

She clarified that an active discussion is currently underway between the experts who participated in the development, technical assistance groups, and the future form of this sector.

“Together with the European Commission, we are trying to promote the model that was used in Europe after the Second World War to solve the problem of housing,” she said.

According to her, the model of social housing implies, among other things, that the facilities should be fully owned by the municipality, this sector should be self-sustaining and financially stable.

“What mechanisms can ensure this (financial stability)? One of the simplest ones used in European countries is that in a building under construction, 80% of the premises are allocated for social housing, which is rented by certain socially vulnerable groups at a reduced rent. This housing cannot be bought out. As for the rest of the premises – housing, commercial – it is rented at market rent, which allows to ensure the functioning of the facility,” explained Remiga.

Since it is more difficult to generate income from commercial space in small towns than in large cities, it may be more appropriate for smaller municipalities to establish joint regional offices.

Another key principle of social housing policy is to avoid ghettoization.

“The buildings of such a housing stock should not be located compactly, the buildings should harmoniously fit into the overall urban landscape. It is also important to provide social infrastructure and good transport links,” said Remiga.

At the same time, she noted that the EIB does not consider participation in affordable housing programs, social lease with purchase.

“We are considering programs aimed at creating and improving the quality of social housing packages in municipalities. However, I would like to emphasize that in general, the EIB does not offer programs whose ultimate goal is to provide loans to individuals for housing. Only the creation of housing owned and managed by municipalities,” said Remiga.

The start of the social housing program can be expected no earlier than mid-autumn 2024.

“The European Union and the EIB, which is the bank of the European Union, have a rule: legislative structural changes first. However, due to the extremely critical situation in Ukraine, we are ready to work in parallel. Since we are already working on the regulatory framework, this allows us to launch administrative procedures on our part in parallel. As soon as the (framework) parameters of the future legislation are clear, even before it is adopted and implemented, we can start working on projects,” Remiga summarized.

She added that the upcoming loan program for social housing with a budget of EUR 200 million is a pilot program.

“Given the needs of Ukraine, billions are really needed to solve housing issues. Only after the pilot project is launched and established, when we can see its effectiveness and the ability of municipalities to manage this pool of real estate, can we talk about launching the next stages. We are very interested in this,” said Remiga.

European Investment Bank will finance energy efficiency measures

The European Investment Bank (EIB) has allocated EUR 3 million to improve the energy efficiency of 18 public buildings in Zaporizhzhia, Kamianske and Lutsk.

“The allocated funds will be used to modernize five kindergartens and three schools in Zaporizhzhia, four kindergartens and three schools in Kamianske, and in Lutsk to modernize three hospitals intended for the treatment of civilians and rehabilitation of military personnel injured during the war,” the EU Delegation to Ukraine reported on its website on Thursday.

It is noted that these funds will help the Ukrainian authorities to continue implementing the EIB’s Municipal Infrastructure Development Program (MIP), which aims to improve public infrastructure in various municipalities.

“After today’s tranche of EUR 3 million, the total amount of funds allocated for the UMIP in 2023 will amount to EUR 11.74 million,” the release states.

It clarified that EUR8.74 million of these funds were previously used to support key municipal projects such as the reclamation of the Hrybovychi landfill and solid waste management in Lviv, the implementation of energy efficiency measures in kindergartens in Sumy, and the improvement of water supply and sewage systems in Lutsk.

According to EIB Vice President Teresa Czerwinska, responsible for the bank’s operations in Ukraine, energy efficiency measures should be prioritized during Ukraine’s current and future large-scale recovery, as they play an important role in strengthening the country’s energy security and independence.

“The EIB is fully committed to supporting the Ukrainian government and cities in these efforts by transferring best practices in reconstruction and modernization to rebuild the Ukrainian economy, reduce energy costs and improve energy efficiency in all sectors,” she assured.

In addition, it is indicated that UMIP is a EUR 400 million multi-sectoral investment initiative aimed at supporting public infrastructure projects in medium and large municipalities. UMIP’s objectives include investments in district heating rehabilitation, energy efficiency improvements in buildings, modernization of street lighting, and water, sewerage and solid waste management, among others. The program is implemented by the Ministry of Communities, Territories and Infrastructure Development in cooperation with the Ministry of Finance of Ukraine. The UMIP is complemented by technical assistance provided through the Eastern Partnership Technical Assistance Trust Fund (EPTATF), managed by the EIB, and the Neighborhood Investment Platform (NIP).

The release specifies that the EIB’s support to Ukraine since the beginning of Russia’s full-scale invasion of Ukraine has reached EUR 1.7 billion in financing for urgent repairs to destroyed infrastructure. The EU bank has also provided a EUR4 billion credit line to support the integration of refugees from Ukraine in EU countries.


EIB to provide EUR 450 mln for two recovery projects in Ukraine

The European Investment Bank (EIB) will allocate EUR 450 million to Ukraine for two recovery projects, with the first two tranches of EUR 100 million each to be approved by the end of 2023, the press service of the Ministry of Recovery reports.

The funds, with a total budget of EUR450 million, are reportedly allocated to two projects – Ukraine Recovery III FL and Ukraine Water Recovery FL.

Ukraine Recovery III FL (EUR250 million, first tranche – EUR100 million): aims to finance critical social and urban infrastructure. This includes the restoration of infrastructure damaged as a result of Russian aggression and the construction of new basic infrastructure to ensure decent living conditions for displaced persons and host communities;

Ukraine Water Recovery FL (EUR 200 million, first tranche – EUR 100 million): aims to finance investments in critical water infrastructure in areas directly affected by the war or where a significant number of IDPs live. This includes the restoration of water supply and sewerage, including measures to overcome the consequences of the destruction of the Kakhovka dam.

Funds from the European Investment Bank (EIB) are allocated as part of cooperation with Ukraine, the principles of which are laid down in the Memorandum of Understanding signed on June 21, 2023 in London at the URC 2023 conference. The Memorandum provides for the allocation of a total of about EUR 840 million in loans for the implementation of infrastructure rehabilitation projects in Ukraine.

Subject to final approval by the EIB Board of Directors and the EU4U Donor Committee, the first tranches of EUR 100 million will be signed by the end of this year.


EIB may provide EUR220 mln to Ukraine to repair roads and bridges

The European Investment Bank (EIB) is considering providing Ukraine with EUR220 million for infrastructure restoration, including road and bridge repairs, the State Agency for Infrastructure Restoration and Development of Ukraine has reported.

According to a Facebook post on Wednesday, the possibility of financing reconstruction projects and the progress of their implementation were discussed with EIB representatives by the agency’s head Mustafa Nayyem and head of the project management team Vadym Nozdria.

As a reminder, in June 2023, the EIB allocated EUR 50 million of EU grant funds under the NIP platform for modular bridges for the regions of Ukraine most affected by the Russian invasion.

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UAH 1.5 bln from EIB fund balance to be allocated to 140 reconstruction projects – Ministry of Recovery and Restoration

The Interdepartmental Commission for the distribution of the first tranche of the European Investment Bank (EIB) funds recommends to allocate UAH 1.5 billion for the implementation of 140 reconstruction projects in the regions of Ukraine, the press service of the Ministry of Development of Communities, Territories and Infrastructure (Ministry of Restoration) reported.

According to the report, it is about the balance of funds received in 2022 from the EIB in the state budget and which will be directed to new budgetary programs by the decision of the government.

At a meeting on August 28, the commission considered proposals to finance 165 projects for UAH 1.9 billion and agreed on the allocation of funds for 140 eligible projects.

Thus, 49 projects for the development of project documentation were selected, 27 – rehabilitation of health care facilities, 19 – educational institutions, 16 – civil defense facilities, eight – water supply and drainage facilities, two – heat supply.

The leaders in the number of agreed projects were Chernihiv (40 projects), Kherson (14), Donetsk (16), Zaporizhzhya and Mykolayiv regions (9 each).

As reported, in June 2023, the Cabinet of Ministers of Ukraine adopted a resolution on the Procedure and Conditions for Distribution of EIB funds in the amount of UAH 4.4 billion. According to this decision, the Ministry of Rehabilitation is determined as the main administrator of funds and responsible executor of subventions from the state budget to local budgets. Priority is given to those regions that suffered the most as a result of the armed aggression or experienced the greatest burden due to a significant influx of internally displaced persons.