The European Bank for Reconstruction and Development (EBRD) is lending €80 million to Ukrainian state-owned oil and gas company Ukrnafta to finance supply and installation of small gas-fired distributed power and co-generation plants around the country. The project, which will provide arou8nd 100MW of capacity in total, aims to boost the resilience of the power sector.
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 USA, channelled through the EBRD’s Crisis Response Special Fund.
Decentralisation is a priority for Ukraine’s power sector, which is operating at about one-third of its pre-war generating capacity as a result of Russian attacks.
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. Ukrnafta 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.
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 renewable energy.
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, including €1.5 billion this year.