Distributed Gas Generation: EBRD and Ukrnafta Sign €80 Million Loan Agreement
16.12.2024 | 10:15 | Section for Public and Mass Media Relations
The European Bank for Reconstruction and Development (EBRD) and PJSC Ukrnafta have signed an €80 million loan agreement. The document, aimed at supporting energy infrastructure, was signed in London on 6 December 2024 in the presence of Ukraine's First Deputy Prime Minister and Minister of Economy, Yuliia Svyrydenko, and EBRD First Vice President Jürgen Rigterink.
“The European Bank for Reconstruction and Development has been a reliable partner for Ukraine for many years. Today’s agreement is the first under a major investment package for public and private companies, approved by the Bank’s Board of Directors on 4 December. The €80 million loan provided to Ukrnafta will enable the construction of new, modern gas-powered generation facilities, strengthening Ukraine’s energy resilience,” noted Yuliia Svyrydenko.
The EBRD loan will also be co-financed by investment grants totalling €9.5 million from the Netherlands and €12.5 million from the United States, channelled through the EBRD’s Special Fund. These funds will allow Ukrnafta to construct additional distributed gas generation capacities.
The financing covers the supply and installation of distributed gas power plants and cogeneration units, with a total capacity of approximately 100 MW, across various regions of Ukraine.
“In the context of ongoing attacks by Russia on energy facilities, these new capacities will play a crucial role in meeting immediate energy needs and ensuring long-term stability,” said Serhii Koretskyi, Director of PJSC Ukrnafta. “This partnership with the EBRD marks the beginning of a new phase and is a testament to the efforts of the entire state management team and our 20,000-strong workforce. It demonstrates that Ukrnafta meets the EBRD’s stringent client requirements, having undergone rigorous assessments and compliance checks. On behalf of the entire company, I am proud that we have reached a new level of international cooperation.”
The loan agreement between the EBRD and Ukrnafta is the first deal within the EBRD’s €1.3 billion investment package for Ukraine. The package is designed to support the recovery of energy and transport infrastructure, the development of distributed generation, and improvements in energy efficiency. In total, the package will fund eight projects to support both public and private sectors.
Background:
The European Bank for Reconstruction and Development (EBRD) is currently implementing over 200 projects in Ukraine, with a total value exceeding €5 billion. Last year, the EBRD provided a record €2.1 billion to Ukraine, following €1.7 billion in 2022. As the largest institutional investor in Ukraine, the EBRD significantly increased its investments after Russia’s full-scale invasion in February 2022, surpassing its target of €3 billion for 2022-2023 by October 2023.
In 2023, the EBRD’s management approved a €4 billion increase in its paid-in capital, bringing it to €34 billion, to provide further support to Ukraine. Investments during the war are expected to continue at approximately €1.5 billion annually, with the capital increase enabling a potential doubling of this volume when reconstruction begins.
Between 2022 and 2023, the EBRD mobilised around €1.6 billion in donor funds for Ukraine, including unfunded guarantees. Over €409 million of this amount was allocated in 2023 alone. Nearly half of the donor resources were provided by the European Union, with significant contributions also made by individual donors, including Canada, Norway, Spain, and the Netherlands.
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