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EBRD and Ukraine sign agreement boosting public sector investments
The European Bank for Reconstruction and Development and the Government of
Ukraine have signed an agreement that will significantly boost EBRD
investments in the Ukrainian public sector over the next three years.
The additional funds will be dedicated to financing a much-needed
modernisation of Ukraine’s transport, power and municipal infrastructure, and
will include a comprehensive programme of energy efficiency measures.
The agreement is expected to increase annual public sector investments by the
EBRD in Ukraine to between 200 and 400 million euros between 2007 and 2009.
That would compare with average annual investments in this sector over the
previous two years of around 180 million euros
The programme, which builds on the success of the previous programme for
2005-2006, will be a component of the new EBRD Country Strategy for Ukraine
which is to be adopted by the end of 2007. The programme, in particular
envisages financing for the following sectors:
• Transport and communications: Renewal of the railway rolling stock, new road
sector projects, development of port and regional airport infrastructure as
well as an upgrade of Ukraine’s air navigation system. Other projects may
include Bank participation in the development of logistics centres for
Ukrposhta (Ukraine Post Office) and development of the state digital
television network.
• Power sector: A number of high voltage transmission projects, including a
750Kv Rivne NPP – Kiev line, 330Kv lines in Odessa region and western Ukraine,
a 500MW Kaniv Hydro Pump Storage Station Construction as well as a power
distribution project in the Crimea.
• Municipal infrastructure: implementation of district heating, waste water
and energy efficiency projects on the basis of municipal guarantees in Kiev
and several other large and medium-sized cities of Ukraine.
• Natural resources: Projects with the Ukrainian oil & gas extraction and
transportation companies (NJSC “Naftogaz of Ukraine”, SC “Ukrtransgas” and JSC
“Ukrtransnafta”) ranging from installing new efficient compressor stations and
the rehabilitation of underground gas storage facilities to the construction
of reservoirs at oil terminals.
• Energy efficiency: Most of the projects agreed in the programme have strong
energy efficiency components. The parties, however, agreed to explore the
potential for energy efficiency projects in other sectors and to promote
Carbon Finance.
The overall volume of financing for the public sector over the period covered
by the Programme is expected to reach one billion Euros. In addition, one of
the key objectives of this programme will be the mobilisation of co-financing
for Ukrainian projects from other leading international financial
institutions, in particular the European Investment Bank
The EBRD and the Government of Ukraine will continue the policy dialogue that
is crucial for reform of key sectors of the Ukrainian economy through the work
of the multilateral consultation bodies (Energy Sector Task Force, the
Transport Sector Working Group etc.). The two parties agreed to continue
close cooperation on the promotion of Public Private Partnerships in the road
sector and on the liberalisation of the telecom sector.
The European Bank for Reconstruction and Development is the biggest financial
investor in Ukraine. As of the end January 2007 it had committed over €2.87
billion through more than 130 projects.
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