Highlights
- EBRD lends 80 million to support distributed energy generation in Ukraine
- Loan to Ukrnafta to provide 100 MW of energy capacity via small-scale gas engines
- Parallel investment grants from The Netherlands and the United States of America
The European Bank for Reconstruction and Development (EBRD) is lending 80 million to Ukrnafta, a Ukrainian state-owned oil and gas company, to finance supplying and installing a total of about 100 MW of small-scale gas-fired distributed power and co-generation capacities around the country. The project aims to boost the resilience of the power sector despite this year's heavy Russian attacks.
The sovereign-guaranteed EBRD loan will be co-financed by parallel investment grants of 9.5 million from The Netherlands and 12.5 million from the United States of America, channelled through the EBRD's Crisis Response Special Fund.
Decentralising its energy system is a key priority for Ukraine, which is operating at about one-third of its pre-war generating capacity as a result of the Russian attacks. Ukrainians are currently living with rolling blackouts that disrupt the lives of millions of people.
The project will see small generation units of up to 10 MW capacity each installed at selected sites in Western and Central Ukraine regions, in locations with severe deficits of energy and heat. Because Ukrnafta is Ukraine's largest oil and gas producer as well as the operator of the country's largest fuel retail chain, it can power the generators using its own gas and ease pressure on the national grid.
"We are proud to finance a project that will help the Ukrainian power sector become more resilient, by supporting Ukrnafta to contribute to providing an uninterrupted supply of electricity both to households and to industry and businesses," said EBRD Managing Director for Ukraine and Moldova Arvid Tuerkner.
While the gas-fired engines will provide energy to supplement the national offering in the short term, at a later stage the same equipment can be used to support Ukraine's plan to increase the share of renewables in its energy mix, with the gas engines then being used to balance intermittent renewable energy input.
The project includes workforce management and leadership training programmes, as well as a veteran rehabilitation programme supporting demobilised staff members and their families in line with the EBRD's Gender SMART approach.
The EBRD, which has worked in Ukraine for more than three decades, has made more than 5.3 billion available to the country since Russia invaded in 2022, of which more than 1.5 billion this year. It invests to support energy security, vital infrastructure, food security, trade and the private sector.
By Vanora Bennett
