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EBRD loan increases reliability of electricity transmission in Ukraine
A €25.8 million financing for a grid upgrade in the Odessa region
The European Bank for Reconstruction and Development is providing a €25.8
million long-term sovereign-guaranteed loan to the National Power Company
“Ukrenergo” for construction of a new 124 kilometre, 330kV electricity
transmission line in the Odessa region. The loan proceeds will be also used
for the modernisation of the existing substations and the installation of
control and protection systems for the line.
With technical and environmental due diligence financed by the Government of
Germany and project preparation by USAID, the project has various objectives.
It aims to help to reduce losses, increase capacity, quality, efficiency and
reliability of electricity transmission, which is very important for Ukraine
as one of the most energy-intensive countries in the industrialised world. In
so doing, the line is expected to increase reliability of power supplies to
the Odessa region from other parts of Ukraine, while at the same time reducing
Odessa’s dependence on electricity supplies through the congested Moldovan
power grid. This is also expected to allow Moldova, which has insufficient
capacity to meet its needs, to increase its net imports from Ukraine.
EBRD President Jean Lemierre stressed that this project is the first of a
number of strategically important high voltage transmission projects that the
Bank is considering financing in the sector in Ukraine. Among other things,
the project is intended to support both Ukraine’s integration with the energy
markets of the European Union as well as the Ukrainian energy sector reforms
necessary for this integration. The project fully complies with the Bank’s
Strategy for Ukraine, approved in May 2005, which identifies the energy sector
as one of the EBRD’s key priorities in the country, he added.
As at the end of November 2005 the EBRD’s cumulative investment in Ukraine
stood at €2 billion through 74 projects.
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