EBRD Pledges More Funding for Ukraine's Long-Term Energy Needs
The European Bank of Reconstruction and Development (EBRD) has committed more financing for Ukraine to install new power generation capacity and help the country decarbonize its energy system.
The new pledges, made at the Ukraine Recovery Conference in Gdańsk, extend the European Union-backed bank's energy support for Ukraine beyond financing for liquefied natural gas procurement.
State-owned electricity transmission operator NPC Ukrenergo has secured a EUR 90 million ($102.67 million) loan from the EBRD to rebuild several substations and improve its corporate governance, the EBRD said in a press release.
The London-based bank also signed a preliminary deal with German renewable energy developer Notus Energy GmbH for a EUR 65 million loan for a 120-megawatt wind farm. "The Bank’s financing would be provided alongside the IFC [International Finance Corp], the Belgian Investment Company for Developing Countries, and Swedfund, and is expected to benefit from a first loss guarantee from the EU's UIF [Ukraine Investment Framework]", it said. "This will be the first transaction under the IFC-EBRD Mutual Reliance Framework".
Another wind project, with a capacity of 189 MW, has secured a EUR 50-million syndicated loan from the EBRD, the Black Sea Trade and Development Bank, British International Investment, IFC and Swedfund. The EUR 40-billion UIF, part of the EU's EUR 50-billion Ukraine Facility, will also provide a first-loss guarantee.
The EBRD also signed "a EUR 44.6 million grant to Ukrnafta supported by the governments of Norway and the Netherlands, and pre-financing agreements that consolidate plans to finance new battery storage projects developed by Power One and Kvant Yug".
Meanwhile Ukrnafta's parent company Naftogaz and the EBRD agreed "to broaden collaboration on ensuring Ukraine's energy security and supporting the recovery and modernization of energy infrastructure", the bank said.
Additionally the EBRD signed letters of intent under which Germany would contribute EUR 45 million and Norway EUR 10 million to the Renewable Acceleration and Market Development for Ukraine Program, a price stabilization mechanism developed by the EBRD and the World Bank to attract private investment into Ukraine’s renewables sector. "The German and Norwegian funding adds to existing support from the EU, the Netherlands and Switzerland, helping to advance a mechanism that is expected to support 1 GW of new renewable capacity and potentially mobilize EUR 1.5 billion in investment", the bank said.
The EBRD also granted a EUR 15-million loan to the city of Kharkiv under a UIF guarantee to help restore heating by supporting "new distributed and resilient heat- and electricity-generating assets".
Another Ukrainian city, Rivne, secured a EUR 12-million loan from the EBRD, complemented by a EUR 6-million grant from the Eastern Europe Energy Efficiency and Environment Partnership and donations from Spain and Sweden, to enable renewable energy and energy-saving measures in public buildings.
Including non-energy support, the EBRD has now committed EUR 10.5 billion in financing for Ukraine since the Russian invasion, the bank said.
To contact the author, email jov.onsat@rigzone.com
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