The European Bank for Reconstruction and Development (EBRD) has met its target of deploying €3 billion of financing in Ukraine’s real economy in 2022-23, to limit the impact of Russia’s war on the country since February 2022.
The Bank, Ukraine’s biggest institutional investor, was swift to pledge increased support following the Russian invasion, focusing on energy security, vital infrastructure, food security, trade and the private sector.
“We are proud to have reached the target we set ourselves. But it does not mean the work stops here. The needs in Ukraine are huge, and we will continue to support the economy for as long as it takes during the conflict, in line with our current investment levels, which may increase further once there is peace,” said Matteo Patrone, EBRD Managing Director for Eastern Europe and the Caucasus.
The EBRD’s Governors have agreed to work on a capital increase in the range of €3 to 5 billion by year-end to extend maximum support for Ukraine, which, if approved, could give the EBRD additional resources to invest.
Supporting the private sector and supporting trade are two of the EBRD’s five investment themes in wartime Ukraine. Through its Trade Facilitation Programme (TFP), the Bank has since the start of the war supported close to €800 million of trade, in addition to more than €700 million of new lending to municipalities and private companies operating in agribusiness and other critical sectors of the Ukrainian economy.
Another theme is reinforcing the country’s energy security. With the support of donors, the Bank has provided €520 million for the electricity transmission company Ukrenergo’s liquidity, linked to market reforms, and €300 million to the energy company Naftogaz, as part of a package of €500 million with donor support. In addition, at the Ukraine Recovery Conference in June, the Bank signed Memoranda of Understanding on providing €600 million of new financing for Ukrenergo, Naftogaz and Ukrhydroenergo, the country’s hydropower entity.
On vital infrastructure, the EBRD has signed loans totalling €250 million to Ukrainian Railways to support its operations and upgrade the country’s railway links with the European Union to its west. The EBRD is also improving road and rail supply routes in and out of Ukraine, to counter uncertainty over the main shipping routes through Black Sea ports such as Odesa, which have been affected by the war.
On food security, EBRD work has focussed on improving Ukraine’s grain export facilities, as well as making finance available throughout the food chain and maintaining livelihoods.
