- EBRD lends €25 million to help Ukrainian city of Lviv handle war impact, refugees
- Emergency funds to ensure vital municipal infrastructure is safe and functioning
- Loan supporting city and municipal operators is 50 per cent backed by US guarantee
The European Bank for Reconstruction and Development (EBRD) is lending €25 million to the city of Lviv in western Ukraine, which is crowded with internally displaced people as a result of Russia’s war on Ukraine, to help it adapt.
The United States of America (USA) will provide credit support to cover half the risk of the loan.
Lviv, Ukraine’s seventh largest city, is the biggest centre in western Ukraine, with a population of around a million people.
With its 27 universities and concentration of industry, it has proved a natural destination for internally displaced people, who have swelled the population at a time when the city is struggling for revenue.
Lviv and its key municipal utilities have been under significant pressure to maintain municipal services.
The EBRD loan will provide liquidity support both for the city government and for key municipal companies - including the transport company Lvivelectrotrans, the road construction, maintenance and traffic-management enterprise Lvivavtodor, the water operator Lvivvodokanal, the district heating company Lvivteploenergo and the waste management operator Zelene Misto.
It will help compensate for temporary revenue losses and additional war-related expenses and to support these entities in providing essential services.
The EBRD is Ukraine’s biggest institutional investor. It has already exceeded its initial ambition of delivering €1 billion in Ukraine this year, and expects to have delivered record investment of more than €1.5 billion by year-end.
The Bank has pledged to provide Ukraine with €3 billion by the end of 2023.
The EBRD’s primary focus is to support the ‘real’ economy – maintaining energy and food security, and supporting trade, vital infrastructure and the private industry.
The EBRD was swift to condemn the Russian invasion and has closed its offices in Russia and Belarus.
To mitigate the risks in the current war environment, its investments in Ukraine are made with the support of donors and shareholders.
This loan benefits from the credit support of the USA, through the EBRD Crisis Response Special Fund, which will cover 50 per cent of the loan.
Lviv is a long-standing client of the EBRD. The four-and-a-half year loan, divided into a €15 million committed tranche and a €10 million uncommitted tranche, follows the EBRD’s provision of emergency liquidity to Lviv in 2021 during the Covid pandemic.
Lviv joined the EBRD’s flagship urban sustainability programme, EBRD Green Cities, in February 2019.