The provision of a sovereign-guaranteed loan to the National Energy Company Ukrenergo ("Ukrenergo" or the "Company") of up to EUR 149 million, EUR 147.2 of which has been repurposed into emergency liquidity to support the Company and ensure stable and uninterrupted electricity transmission services on the entire territory of Ukraine despite the devastating impact of Russian war on Ukraine (the "Project"). The EBRD loan is also backed by the EU EFSD guarantee and the UK Government sovereign donor guarantee.
The Project will safeguard electricity provision and access to vital services for people and businesses, whose livelihoods and economic security is at immense risk due to Russian war on Ukraine.
ETI score: 70
Beyond the original Well-governed TI qualities, EBRD's financing will support the resilience of Ukrenergo and its operations, helping address the need to support energy security in Ukraine in the war environment.
Beyond that the original Green TI qualities have been upgraded as the project will also help to address challenges in maintaining financial viability of the Ukrainian renewable energy generation sector in order to keep renewable energy producers operational during the ongoing war in Ukraine. Part of the repurposed funds will be channelled towards payments to renewables.
NATIONAL POWER COMPANY UKRENERGO PJSC
National Energy Company Ukrenergo is a 100% state-owned company, a natural monopoly and the sole electricity transmission system operator (TSO) of Ukraine.
EBRD Finance Summary
Total Project Cost
The EBRD repurposed liquidity financing is provided in expedited manner under the extraordinary circumstances and effectively bridges a part of financing gap due to the war and adverse market conditions. EBRD's financing will also complement the efforts of other IFIs by bringing a robust policy dialogue agenda focused on commercialisation and institutional strengthening of Ukrenergo and the sector, as well as promoting procurement standards beyond the Bank's usual requirements.
Environmental and Social Summary
Category B (2019). Medium to high risk due to sector, operational change and inability to undertake any due diligence at this stage. The original Project was approved by the Board in July 2019 to finance procurement and installation of up to 26 new transformers as well as for automation and upgrade of 12 HV substations in key locations of the Ukrainian transmission network. The Project was subject to an independent ESDD and an ESAP, SEP and NTS for various substations was agreed with the Client. In September 2020, the Loan Agreement and the Guarantee Agreement under the Project were declared effective. Procurement activities were under way when the war started, therefore, no disbursements have been made under this Project. The Bank has existing Project with the client (transmission lines), which had been implemented. Some of these are now located in the war zones.
The proposed repurposing of the use of proceeds is intended to provide emergency liquidity to address the Client's critical liquidity needs and to ensure stable and uninterrupted power transmission in the entire country despite the impact of Russian war on Ukraine. This use of proceeds is not associated with significant environmental or social risks or impacts. The Company is an existing client to the Bank with a good environmental & social performance track record. The repurposed project is categorised B (2019 ESP). Under the war conditions in Ukraine there was no possibility to undertake detailed updates of the Client's performance, ESAP implementation or any additional Environmental and Social Due Diligence (ESDD), and this can be done only when the situation allows. The client will be required to continue to ensure that the repurposed project complies with the Banks's ESP PRs as well as will submit an annual environmental & social report to the Bank. Given that post war requirements and needs will have changed to reflect any future reconstruction needs, the ESAP will need to be revised. ESD will undertake a monitoring visit and revise the ESAP once this is possible.
Technical Cooperation and Grant Financing
1) Technical cooperation funds will support Ukrenergo in the engagement of independent international experts to support the Company to accelerate Ukrainian grid integration with ENTSO-E and enable faster completion of necessary measures to enable better commercial exchanges of electricity that would support energy sector security, allow for additional cash inflows to the energy sector of Ukraine and significantly increase revenues for Ukrenergo.
2) Technical cooperation funds will support Ukrenergo with the need to revise and update the ESAP to take account of the new post war priorities and new EHS and ESG requirement agreed with new timelines.
Company Contact Information
+380 (93) 079 9546
Symona Petlyury St, 25, Kyiv, 01032
PSD last updated
24 Oct 2022
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Independent Project Accountability Mechanism (IPAM)
If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).
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