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Supporting Ukraine with €517 million of EU funding through EBRD
- EU to provide €517 million of funding for Ukraine through EBRD programmes
- Agreements signed at Ukraine Recovery Conference in Berlin
- This EU funding supports new EBRD projects with Ukrainian cities for €143 million
Arvid Tuerkner, EBRD Managing Director for Ukraine and Moldova and Valdis Dombrovskis, Vice-President of the European Commission, met at the Ukraine Recovery Conference in Berlin to sign agreements totalling €517 million of EU funding to support Ukraine’s economy and recovery.
The EU funding will in turn support a further €143 million of new EBRD projects with Ukrainian cities, and the rest of the funding will be deployed swiftly in several critical areas.
The EBRD and EU have stood resolutely by Ukraine in wartime, significantly boosting financial support in key areas to help people and businesses facing the most adverse situations.
Under the agreements signed today, the European Union will provide additional support for four EBRD programmes. The EU will provide a financial guarantee of €140 million for the EBRD’s Financial Inclusion Recovery Programme. It will also offer blending grants of €30 million and technical assistance of €7 million for the SME Competitiveness and Inclusion Programme in Ukraine. Both will boost much-needed access to finance for small and medium-sized enterprises in the wartime environment.
This additional EU funding is expected to be rapidly deployed, and the URC has already seen the signing of several EBRD agreements with Ukrainian beneficiaries.
Support for regions and municipalities is one of the themes of the 2024 conference.
Mykolaiv’s loan package of up to €25 million will rehabilitate the port and ship-building city’s water supply and treatment infrastructure. These are in poor condition as a result of war damage. The EBRD loan is covered by a guarantee from Spain and to be co-financed by investment grants from Denmark and from the multi-donor Eastern Europe Energy Efficiency and Environment Partnership (E5P) Fund, to which the European Union is an important donor, alongside Denmark, Estonia, Germany, Iceland, Ireland, Latvia, Lithuania, Norway, Poland, Slovakia, Sweden, Switzerland, Ukraine and the United States.
Up to €15 million will support the city of Lutsk in modernising its municipal district heating system, potentially also supported by an investment grant from the European Union. It will be the first new district heating project financed by the Bank in wartime Ukraine, as well as the EBRD’s first project in Ukraine to include the financing of heat pumps. The EBRD loan is covered by a guarantee from Spain.
Alongside a pre-financing agreement with Kharkiv, the EBRD signed similar agreements with Kryvyi Rih and Kyiv, for a total of up to €87 million for the three cities. These set out plans to provide emergency liquidity support to ensure uninterrupted access to vital infrastructure services and mitigate the impact of war, including recent attacks on municipal heating and energy infrastructure. A fourth pre-financing agreement with Zhytomyr, of up to €16 million, is to support public transport improvements.
These signings build on a long-standing commitment to both regional and municipal development in Ukraine. The EBRD’s engagement with cities, which before the war saw seven Ukrainian cities join the Bank’s flagship urban sustainability programme, has continued in the wake of Russia’s invasion of Ukraine two years ago.
Arvid Tuerkner, EBRD Managing Director for Ukraine and Moldova, said: “The EBRD has been standing strongly besides Ukraine before and since the start of the full-scale war in 2022. We have provided financing of nearly €160 million to Ukrainian municipalities, including around €100 million of disbursements for existing projects. The agreements signed with the EU today shows the deep commitment of likeminded partners in support of Ukrainian people today and in the future.”
Olivér Várhelyi, European Commissioner for Neighbourhood and Enlargement said; “The European Union stands by Ukraine in these challenging times, to resist the Russian aggression and to recover, reconstruct and modernise the country. We are pleased to cooperate with key international partners in this effort, deploying or funding instruments to mobilise public and private investments at scale and amplify the impact of our assistance. Looking ahead, we hope that the initiatives launched today will contribute to building back better and integrating Ukraine into the European Union.”
The EBRD, Ukraine’s largest institutional investor, has significantly increased its finance to Ukraine since Russia launched its full-scale war there. The Bank has made over €4.2 billion available to Ukraine since 2022. EBRD shareholders have recently agreed to provide a €4 billion paid-in capital increase to enable the Bank to continue investing at current levels in wartime, with the potential for more investments when reconstruction starts.