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The European Bank for Reconstruction and Development (EBRD) and the European Union (EU) are providing further support to Ukraine’s largest strategic enterprise, Ukrainian Railways (Ukrzaliznytsia, or UZ), making the national energy system more resilient.
Through a €44 million investment grant, the EU – under its Ukraine Investment Framework – is backing the EBRD loan of €180 million, signed in December 2024, to Ukrzaliznytsia.. This top-up plays a critical role in significantly scaling up the overall financing package and expanding the impact of the Bank’s existing support.
Previously, the project also benefited from a parallel grant of £20 million (around €24 million) from the United Kingdom Government to the Ukraine Energy Support Fund, administered through the Energy Community Secretariat.
The EBRD loan, alongside contributions from the EU and the UK government, will finance the supply and installation of up to 200 MW of decentralised, small-scale, gas-fired power-generation capacity at selected Ukrzaliznytsia sites across Ukraine, helping to address the electricity deficit and ensure an uninterrupted supply of energy to households and businesses. The project, costing a total of €248 million, will make the national energy system more resilient.
Ukraine’s energy infrastructure has remained under regular and intensifying attacks in 2025. Since the beginning of the full-scale war, Ukraine has lost more than 10 GW of its generation capacity. Given the extent of recent damage to Ukrainian power systems, adding new capacity is vital for both the Ukrainian economy and its people. Large-scale generating plants are relatively easy targets for missiles and drone attacks, so the Ukrainian government has prioritised the deployment of decentralised generation. Small modular gas engines will help improve system resilience, enhance energy security and reduce exposure to ongoing attacks.
€3 million of the EU grant funding will contribute to establishing a new in-house UZ Academy training and veterans’ reintegration facility. Each year, the Academy will enable between 1,000 and 1,200 Ukrzaliznytsia employees to acquire market-relevant skills and qualifications, helping to address ongoing labour-market challenges caused by Russia’s continued aggression.
“Ukraine’s railways have demonstrated extraordinary resilience since the start of the war, serving as a lifeline for the country’s people and economy. By investing in decentralised energy generation as well as in people – through the UZ Academy – we are working with the European Union to strengthen both immediate operational capacity and Ukraine’s long-term recovery. The EBRD remains firmly committed to supporting Ukraine’s infrastructure, energy security and resilience, in close cooperation with our international partners,” said Arvid Tuerkner, EBRD Managing Director for Ukraine and Moldova.
Katarína Mathernová, Ambassador of the European Union to Ukraine, said: “Ukraine’s railways have carried this country through war – connecting families, moving essential goods and keeping the country moving under extraordinary pressure. At the same time, they have become a constant target of Russian drone attacks, which makes this support all the more crucial. Today, the European Union stands with Ukrainian Railways once again. With €44 million in EU grants and our support for major EBRD financing, we are investing in energy security, mobility and people. This is about keeping trains running, lights on, and Ukraine moving forward.”
Oleksandr Pertsovskyi, Chairman of the Board of Ukrainian Railways, commented: “We are actively preparing for winter. The energy system remains one of the enemy’s priority targets, so Ukrainian Railways must be ready for any scenario. That is why we continue to develop our own gas-based generation – a project of our energy independence that will allow us to operate even during blackouts, reliably transport passengers and cargo and support the national energy system. We thank the European Union, the United Kingdom, the EBRD and the Energy Community Secretariat for their consistent support of this project.”
As a leading provider of climate finance, the EBRD is working with Ukraine over the longer term to move to a renewable energy-led future as soon as conditions allow. The small gas engines to be installed under this project and others like it can later be repurposed to balance the intermittent energy to be provided by solar and wind power.
As part of a separate project, the EBRD is providing a €10 million accessibility grant to support urgent upgrades at major Ukrzaliznytsia railway stations in Kyiv and Lviv. The investment will finance step‑free access and energy‑efficient lighting, improving safety and accessibility for people with disabilities, passengers with young children, older people and others with reduced mobility. Enhanced energy-efficient lighting across the network will also improve safety for women in public spaces around stations.
Ukrainian Railways is a vertically integrated national railway operator owned by the government of Ukraine. A monopoly provider of rail transport in Ukraine, it operates a railway network of around 20,000 km and related infrastructure and is one of the largest contributors to Ukraine's gross domestic product (GDP), with its revenue representing 2.34 per cent of Ukraine's pre-war GDP. The war has displaced millions of people and prompted changes in the way goods are moved around the country, which has added to the company’s strategic importance.
The EBRD is Ukraine’s largest institutional investor, having substantially increased its investment in the country since Russia launched a full-scale invasion in 2022. Since the start of the war, the Bank has deployed billions of euros to support the real economy, with a focus on energy security, private-sector resilience and critical infrastructure.
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