Strengthening Ukraine’s energy security

Ukraine’s energy sector has faced unprecedented destruction since Russia’s full-scale invasion began in February 2022, with severe damage to electricity, gas and heating systems. The country’s power generation capacity fell by around 70 per cent in the first two years of the war, leading to rolling blackouts, while damage to state-owned Naftogaz’s facilities contributed to Ukraine having record-low levels of gas in underground storage, creating a need for emergency gas imports.

The attacks have undermined the reliability and affordability of energy supplies that are essential to all sectors and which underpin jobs and livelihoods. They have also jeopardised government revenues at a time of heightened economic pressure – prior to the war, the energy sector, largely associated with state-owned enterprises, generated around 13 per cent of Ukraine’s gross domestic product. In addition, the attacks have impacted other countries, as Ukraine is a major energy producer and hosts some of Europe’s most important facilities for storing and transferring energy.

The EBRD has strategically combined short-term crisis response to support Ukraine’s immediate needs, such as emergency winter gas purchases and repair and protection of grid infrastructure, with long-term investment and policy efforts to build lasting energy resilience.

As of the end of 2025, the Bank had accounted for around one-third of total international investment to support Ukraine’s energy sector during wartime, deploying more than €3.2 billion in emergency finance and long‑term investment. This was made up of €2.6 billion in loans and over €600 million in grants and concessional finance, enabled by strong support from donors.

The Bank’s emergency support for energy security has included:

• Emergency gas supplies: around 10 per cent of Ukraine’s annual wartime gas consumption was covered by EBRD-supported financing to Naftogaz in 2025 – with the EBRD helping to procure 2.3 billion m³ of gas, The almost €1 billion in funding included the EBRD’s largest single loan in Ukraine of €500 million – supported by a 90 per cent guarantee from the EU’s Ukraine Investment Framework and €219 million in Norwegian grants. Since the start of the war, the EBRD has helped Naftogaz to procure close to 4.1 billion m³ of gas.
  
  
• Grid repairs: Damage to system operator Ukrenergo’s equipment, transformer stations and transmission lines prompted the Bank’s financial support for Ukrenergo to procure 43 autotransformers, as well as the construction of 36 associated protective structures. This emergency support helped restore continued access to electricity for households, businesses and communities across Ukraine.
  
  
• Hydropower support: The EBRD, alongside Italian concessional financing, helped Ukrhydroenergo restore key hydropower assets after they were hit by more than 50 military strikes. Hydropower is a key source of electricity generation for Ukraine, covering about 5 per cent of domestic energy use in 2024.
  
  
• Rapid Response Unit: Through the Ukraine Reform Architecture (URA) Programme and with the support of the Ukraine Multi Donor Account in collaboration with the EU, the EBRD has embedded a Rapid Response Unit in Ukraine’s Ministry of Energy. Sitting alongside the pre-existing Reform Support Team, it assists with prioritising urgent repair and protection needs. In addition, the AidEnergy Platform – launched in 2022 by the Ministry of Energy with EBRD support – has acted as a centralised matching and tracking hub for emergency energy assistance. 
  
  
• Decentralising energy generation: The vulnerabilities created by centralised energy generation in wartime Ukraine spurred the EBRD to shift its approach in 2024-25 towards decentralised, small‑scale energy solutions, including battery energy storage systems (BESS) and renewables. The Bank’s Energy Security Support Facility (ESSF) has channelled funding through partner financial institutions to support business and household investments in decentralised energy generation, renewable energy, storage and energy efficiency. By the end of 2025, at least 50 Ukrainian borrowers had received sub loans under the ESSF, with an expected179 MW of renewable energy to be installed as a result. Read more about the results of EBRD’s ESSF support here . The Bank also helped to accelerate distributed generation roll-out through technical assistance to Ukraine’s Ministry of Energy to analyse oblast level energy security needs, advise on project implementation, and develop technical, regulatory, and training frameworks for decentralised energy systems.

Results figures in images:
• individuals benefiting from maintained or improved energy/electricity access = 10.4 million
• affected firms with improved energy access or energy generation capacity = 1,063

While the EBRD has provided much-needed wartime support to help maintain access to energy for Ukraine’s businesses and people, its support is also helping to advance the country’s longer-term energy security objectives, such as decentralising energy assets and improving governance of the country’s state-owned enterprises (SOEs).

A systemic shift towards renewables in peacetime will require an improvement in Ukraine’s ability to attract private investment at scale. EBRD work through the Renewable Acceleration and Market Development for Ukraine Programme (RAMP-UP) is working to deliver this change.

RAMP-UP – which the Bank is developing with the EU, World Bank and other partners – is setting up a donor-funded mechanism to support revenue stability for renewable energy generators in the short term, while encouraging reforms to enable the shift to a national support scheme that can attract investments at scale in the medium to long term.

Also supporting renewables, BESS introduced with EBRD assistance during wartime will have longer-term benefits for Ukraine’s energy diversification and green future, as these systems help to balance intermittent renewable energy supplies and will be increasingly needed as renewables expand.

In addition, EBRD loans to bolster distributed power supply are helping to counteract the vulnerabilities created by centralised energy generation and make Ukraine’s electricity network more resilient. Ukraine lost around 90 per cent of its flexible generation capacity between the start of the war and the end of 2025. Over the same period, the EBRD financed 900 MW of new decentralised capacity.

The long-term future of Ukraine’s energy sector has also been bolstered by ongoing work to improve the governance of state-owned energy companies, including Naftogaz, Ukrenergo, and Ukrhydroenergo, which has been a long term focus of the EBRD’s work in the country . The passage of the SOE Corporate Governance Law in February 2024 was a landmark achievement, strengthening Ukraine’s framework to enhance the autonomy, transparency and accountability of SOEs. It empowered SOEs to approve strategic plans and to appoint and dismiss chief executive officers, introduced enhanced disclosure requirements, and defined grounds for the early dismissal of board members to prevent arbitrary actions by the state.

The EBRD and its international partners will continue to advance a systemic energy‑sector reform agenda in Ukraine, in close alignment with a government drive to enhance energy security and the green transition.

Since the onset of the war in 2022, more than €3.4 billion has been secured for Ukraine from over 20 donors. This included €309 million in donor guarantees from the United States of America, Norway, UK, and the EU, and €133 million in investment grants from Norway, the Netherlands and the United States of America for emergency repairs to Ukrenergo’s assets damaged by the Russian attacks. In 2025 alone, the EU contributed €604 million under the Ukraine Infrastructure Facility (UIF), which in majority supported emergency gas procurement for Naftogaz and Ukrhydroenergo hydro power plant repairs. The EBRD’s financing for Naftogaz has been backed by bilateral guarantees from the EU, the United States of America, Norway, France, Germany, Canada and the Netherlands and €408 million in grants from Norway. Donors also supported Ukraine in its efforts to diversify its energy sector and help corporates, SMEs, municipalities and households to reduce their energy needs and tap into alternative energy sources.

Coordination of efforts across bilateral and multilateral stakeholders is key to ensure effective and timely support to Ukraine during the wartime. The EBRD’s active participation in G7, the EU, the Ukraine Donor Platform, and sector working groups has contributed to a general alignment in priorities and helped accelerate mobilisation of financing technical assistance and policy reform – including in the energy sector.

The EBRD’s approach also relies on long-term engagements with energy operators including Ukrenergo, Naftogaz and Ukrhydroenergo. Combining investment with technical assistance and policy engagement, the Bank supports these companies in restoring infrastructure, strengthening operational performance, and enhancing corporate governance gaps where needed – helping lay the foundations for a more resilient energy sector and a better-functioning, more transparent market.

Rapid and decisive actions are needed to fix weak governance, which raises systemic risk for energy security, public trust and donor trust. The EBRD, together with G7 and international financial institution partners, has advocated for the swift, orderly and transparent reappointment of Energoatom’s supervisory board, with international observation to restore credible oversight. A recommended corrective agenda outlined a sequence of reforms including company charter amendments, merit-based CEO selection and a reset of internal controls, procurement and anticorruption systems.