EBRD and EU support Ukrainian city of Lviv

• EBRD lending up to €10 million to city of Lviv to tackle impact of war 
• Emergency liquidity to help ensure that essential public services continue functioning 
• Bank also providing technical support to Lviv Veterans Centre

The European Bank for Reconstruction and Development (EBRD) is providing a senior loan of up to €10 million to the city of Lviv in western Ukraine to help ensure the provision of vital municipal services and mitigate the effects of the ongoing war.

The European Union (EU) is supporting the EBRD’s loan by providing 25 per cent first loss risk cover under its Municipal, Infrastructure and Industrial Resilience Programme (which was established as part of its Ukraine Investment Framework) to address war-related risks. That programme focuses on emergency support and future reconstruction efforts across various sectors (including industry, energy and municipal infrastructure) and will see the EU provide a total of €150 million in guarantees, €25 million in investment grants and €7.5 million in technical assistance via the EBRD.

Lviv is the seventh largest city in Ukraine and the largest in the west of the country. A total of 758,000 people live in the city itself, with around 1 million living in the wider Lviv agglomeration. This number has increased recently, since Lviv is a natural destination for internally displaced people on account of its location and its role as a major educational and economic centre.

Due to the ongoing war and its impact on the local economy, forced displacement and labour market instability, there is a significant risk of disruption to infrastructure services. This could affect the provision of infrastructure necessary for Lviv’s economic stability and the city’s private-sector operations.

The EBRD’s loan will provide liquidity to key municipal operators such as transport company Lvivelectrotrans, waste management operator Zelene Misto and water operator Lvivvodokanal. The emergency funds will support those municipal operators by helping to address their critical liquidity needs, helping to ensure the uninterrupted provision of essential public services.

The EBRD will also provide technical support through its ongoing Human Capital Response for Ukraine programme in order to address the capacity-building needs of the Lviv Veterans Centre, which provides legal, educational and administrative services in cooperation with local partners. The Bank will help the city to enhance the services and support that it provides to its veterans and their families.

The EBRD is Ukraine’s largest institutional lender. It has significantly increased its lending to the country in recent years, making more than €7 billion available since February 2022. It has also secured agreement from its shareholders for a capital increase of €4 billion in order to continue lending at this level in wartime and increase its financing further when the time comes for reconstruction.