At the Ukraine Recovery Conference in Berlin, Arvid Tuerkner, EBRD Managing Director for Ukraine and Moldova, and Valdis Dombrovskis, Vice-President of the European Commission, signed agreements worth €517 million in EU funding to bolster Ukraine’s economic recovery.
This substantial funding will support €143 million in new EBRD projects with Ukrainian cities, with the remaining funds being rapidly deployed across critical sectors.
Strengthening Ukraine’s Economy Amid Conflict
The EBRD and the EU have consistently supported Ukraine during the war, significantly enhancing financial assistance to aid people and businesses in dire situations. The agreements signed will channel additional EU support into four key EBRD programmes:
- Financial Inclusion Recovery Programme: €140 million in financial guarantees.
- SME Competitiveness and Inclusion Programme: €30 million in blending grants and €7 million in technical assistance to improve access to finance for small and medium-sized enterprises.
- Hi-Bar Guarantee Programme: €150 million in financial guarantees and €7.5 million in technical assistance to support climate mitigation technologies.
- Municipal, Infrastructure, and Industrial Resilience Programme: €150 million in financial guarantees, €25 million in blending grants, and €7.5 million in technical assistance for emergency support and reconstruction efforts.
Rapid Deployment of EU Funds
The additional EU funding will be swiftly implemented, with several agreements already signed with Ukrainian beneficiaries. Among these are municipal loans to Mykolaiv and Lutsk, supported by EU investment grants, totaling €40 million. A pre-financing agreement for municipal lending to Kharkiv has also been secured.
Boosting Municipal and Regional Development
The EBRD is dedicated to supporting Ukrainian municipalities, providing both financial and capacity-building assistance. At the URC, financing or pre-financing agreements were signed with six municipalities, making €143 million available to Ukraine’s cities. Highlights include:
- Mykolaiv: Up to €25 million to rehabilitate water supply and treatment infrastructure, co-financed by investment grants from Denmark and the E5P Fund.
- Lutsk: Up to €15 million to modernize the municipal district heating system, potentially supported by an EU investment grant.
Commitment to Sustainable Municipalities
The EBRD joined the Coalition for Sustainable Municipalities, committing to enhance access to finance for municipal recovery and development. Support for regional infrastructure was also emphasized, with potential co-financing for a €300 million project for electric locomotives and regional water sector support.
Long-Term Commitment to Ukraine
Since the full-scale war began in 2022, the EBRD has provided nearly €160 million in financing to Ukrainian municipalities, contributing to a portfolio of 44 projects worth €955 million. Key new projects include €40 million in liquidity for Lviv and Dnipro, and €15 million for Khmelnytskyi public transport.
Future Prospects
As Ukraine prepares for EU accession negotiations, the EBRD continues to be its largest institutional investor, providing over €4.2 billion since 2022. With a recent €4 billion paid-in capital increase, the EBRD is poised to maintain high investment levels during the war and support reconstruction efforts in the future.
