Ukraine Receives €133 Million from European Investment Bank to Repair Damaged Hydro Power Plants

Ukraine Receives €133 Million from European Investment Bank to Repair Damaged Hydro Power Plants

(IN BRIEF) The European Investment Bank (EIB) has disbursed €133 million to Ukraine for the Hydro Power Plants Rehabilitation Project, carried out by Ukrhydroenergo, the country’s largest hydropower generating company. This funding aims to support the restoration and repair of hydropower facilities damaged by Russian shelling, focusing on equipment replacement, operational reliability improvement, and enhancing the efficiency of hydroelectric power plants along the Dnipro River. The funds are part of the EIB Ukraine Solidarity Urgent Response package, backed by an EU guarantee, to assist Ukraine in repairing essential infrastructure and municipal services, especially during the cold heating season. This project, initiated in 2012, has already received a €200 million EIB loan for the refurbishment of 21 hydro units at Ukrhydroenergo stations, contributing to increased operational reliability and capacity.

(PRESS RELEASE) LUXEMBOURG, 12-Dec-2023 — /EuropaWire/ — Ukraine has received €133 million from the European Investment Bank (EIB), the bank of the European Union, to continue financing the Hydro Power Plants Rehabilitation Project implemented by Ukrhydroenergo — the largest hydropower generating company of Ukraine. This funding is set to help in the restoration of the Ukrhydroenergo HPPs and PSPPs, which were damaged by Russian shelling. This tranche follows the amount of €67 million disbursed earlier by the EIB for the purpose of financing the existing project, which was fully used by mid-2022.

The allocated funds are designed for upgrading and refurbishing hydropower facilities owned by Ukrhydroenergo and repairing and mitigating the war-induced damages to this critical energy infrastructure. The efforts will focus on replacing critical equipment, boosting operational reliability, and enhancing the efficiency and resilience of hydroelectric power plants along the Dnipro River. This is particularly crucial given the partial destruction of Dnipro HPP and the complete destruction of the Kakhovka HPP dam.

The EIB has facilitated the disbursement of €133 million to Ukraine under the EIB Ukraine Solidarity Urgent Response package. Backed by an EU guarantee, this package is intended to help Ukraine to repair damaged infrastructure, reinstate essential municipal services and support urgent measures amidst the ongoing cold heating season.

EIB Vice-President Teresa Czerwińska, who is responsible for the Bank’s operations in Ukraine, said: “Since the beginning of the full-scale invasion and to this day, Ukraine’s energy facilities, including hydropower facilities, have been and continue to be under constant attack. While Russian bombs bring destruction, we have been steadfast in offering support right from the beginning. This €133 million underscores our strong commitment to assisting the country, particularly in strengthening its energy infrastructure. These funds will enable Ukrhydroenergo to uphold the reliability of its equipment, which is crucial for the stable and uninterrupted operation of Ukraine’s energy system. As the EU bank, through its EU for Ukraine Fund and related efforts, the EIB remains firmly committed to supporting Ukraine’s immediate recovery and long-term resilience.”

European Commission Executive Vice-President for an Economy that Works for People Valdis Dombrovskis said: “We warmly welcome the EIB’s latest disbursement to Ukraine to help it carry out emergency repairs to its hydroelectric plants. Backed by an EU guarantee, this is another valuable contribution to financing Ukraine’s urgent requirements as it struggles to restore essential services damaged by Russia’s aggression. It will enable state hydropower company Ukrhydroenergo to maintain the safe operation of Ukraine’s electricity grid, which is particularly crucial during the winter months. This funding is part of the European Union’s unwavering support for Ukraine, which is here to stay.”

General Director of Ukrhydroenergo Ihor Syrota said: “The funds will enable us to purchase critical equipment to respond quickly in case of emergencies and ensure prompt restoration of the operation of both the company’s plants and the United Energy System of Ukraine. The funds will also enable the company to continue reconstructing the hydrо units of Ukrhydroenergo’s HPPs and PSPPs on the Dnipro River, which will increase their operational reliability and capacity.”

The €133 million tranche is part of the ongoing “Hydro Power Plants Rehabilitation” project. Initiated in 2012, this project has involved a €200 million loan from the EIB under Ukraine’s sovereign guarantees for the refurbishment of 21 hydro units at Ukrhydroenergo stations. This includes work at the Kyiv PSP, Kaniv, Kremenchuk, Kakhovka and Serednyodniprovska Hydroelectric Power Stations, as well as Dnipro Hydroelectric Power Station (DniproHES)-1 and Dnipro Hydroelectric Power Station (DniproHES)-2. These efforts are aimed at enhancing the operational reliability and capacity of hydro units, and replacing auxiliary, power and hydromechanical equipment.

Background information

Since the very start of Russia’s full-scale invasion of Ukraine in 2022, the EIB offered immediate relief to Ukraine, disbursing €1.7 billion of financing since 2022 and helping finance emergency repairs to the country’s ravaged infrastructure. The EU bank also provided a €4 billion credit line to support the integration of refugees from Ukraine in EU countries. Through the EU for Ukraine initiative and its Fund, the Bank remains committed to stepping up its activities in Ukraine, in line with the mandate given by EU leaders and in close cooperation with the European Commission, the European Parliament, EU Member States and international partners.

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SOURCE: European Investment Bank