EU Expands Support for Ukraine with New Financing

Strategic Insights -

The European Union is stepping up economic support for Ukraine with almost EUR600 million in fresh financing for energy systems, transport networks, and a range of businesses in the country. The European Investment Bank (EIB) Group and the European Commission announced the new EU funding package at a "Ukraine Recovery Conference" in Rome, aiming to restore major hydropower plants, upgrade municipal district-heating systems, repair key Ukrainian roads and bridges, and improve border crossings.

Key Takeaways:

  • The EIB Group has provided EUR3.6 billion in financing to Ukraine since the start of Russia's full-scale invasion in 2022, with almost two-thirds already disbursed.
  • The new EU funding package includes EUR120 million for the rehabilitation of three strategic hydropower plants, EUR100 million for decentralised heat generation and renewable energy, and EUR134 million for the repair of bridges and roads.
  • The package also includes EUR100 million, EUR70 million, and EUR60 million in new loans to Ukreximbank, Ukrgasbank, and Bank Lviv, respectively, to support small and medium-sized enterprises (SMEs) with a focus on green investments.
  • Ten Member States - Denmark, Finland, France, Germany, Italy, Latvia, Romania, Slovakia, Slovenia, and Spain - have joined InvestEU's EUR300 million Ukraine Export Credit Pilot, a pioneering initiative to support trade with Ukraine.
  • The EIB has launched the Ukraine FIRST project preparation programme, backed by EUR20 million from the EU's Ukraine Facility, to support feasibility studies, technical assessments, and procurement planning for infrastructure projects.
  • The EIB has partnered with the Ukrainian State Audit Service to strengthen oversight of investments and prevent fraud and corruption in EU-financed projects.
  • The EIB is also teaming up with the German Agency for International Cooperation (GIZ) and the United Nations Development Programme (UNDP) to support the integration of renewable energy into projects, particularly in smaller cities and communities.

Statistics:

  • EUR3.6 billion: total EIB financing to Ukraine since the start of Russia's full-scale invasion in 2022
  • EUR2.3 billion: almost two-thirds of EUR3.6 billion already disbursed
  • EUR600 million: new EU funding package announced
  • EUR120 million: EIB loan to Ukrhydroenergo for the rehabilitation of three strategic hydropower plants
  • EUR100 million: EIB loans to Ukrgasbank and Oschadbank for district-heating systems
  • EUR134 million: EIB loan to Ukraine's national Agency for Restoration for the repair of bridges and roads
  • EUR300 million: InvestEU's Ukraine Export Credit Pilot
  • EUR20 million: EU funding for the Ukraine FIRST project preparation programme
  • EUR5 million: EIB and EBRD contributions to the Ukraine FIRST project preparation programme

Sources:

  • European Investment Bank (EIB)
  • European Commission
  • Ukraine Recovery Conference
  • InvestEU
  • European Investment Fund (EIF)
  • European Bank for Reconstruction and Development (EBRD)
  • German Agency for International Cooperation (GIZ)
  • United Nations Development Programme (UNDP)
  • German International Climate Initiative (IKI Fund)