EBRD and Ukrainian authorities have agreed the repurposing of part of an existing loan to NPC UKRENERGO, the country’s electricity transmission company, to provide €50 million of #emergency #liquidity. In turn, The European Union’s European Fund for Sustainable Development (EFSD), the financing arm of the EU External Investment will provide a first loss guarantee that will partially mitigate the EBRD’s risk of non-repayment in the current war environment. EBRD’s support together with the EFSD’s guarantee will keep the lights on in Ukraine whose economy has been hard hit by russia’s invasion.
▪ The EBRD originally agreed to lend €149 million to Ukrenergo in July 2019 to upgrade key transmission infrastructure required to maintain system stability and back-up #synchronisation with European electricity networks, as well as help Ukraine align its legal framework and operational practices with the EU 3rd Energy Package. The loan has yet to be disbursed.
▪ The war has triggered urgent liquidity needs that prompted Ukrenergo to seek the repurposing of these funds. Since the war began, the company has been contending with substantial non-payments by its customers coupled with a 30 per cent reduction in electricity consumption and resulting revenue losses.
▪ In general, the EBRD is prioritising #five #areas within the country’s economy to address Ukraine’s most pressing needs: trade finance, energy security, vital infrastructure, food security (covering provision of liquidity to farmers via banks for the spring sowing campaign as well as to agribusiness companies and food retailers), and the provision of liquidity to pharmaceutical companies.
🔹 Thus, the EBRD has pledged to invest €1 billion this year in supporting the Ukrainian economy with donors and partners. EU and EBRD are working on providing support to other vital operations in the coming weeks, particularly addressing the liquidity needs of Ukraine’s railway and pharmaceutical sectors.
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