EBRD loan to Ukraine to construct power line
EBRD provides €150 million loan to Ukrenergo
New transmission line brings reliable power supply to central Ukraine and its capital
London, United Kingdom – The EBRD is providing a €150 million to Ukraine to be on-lent to the national power company Ukrenergo to improve substantially the efficiency, quality and reliability of electricity generation and transmission in western and central Ukraine.
Proceeds from the loan, the Bank’s largest transaction in the power sector of Ukraine to date, will enable Ukrenergo to construct 750 kV high voltage transmission lines, linking central regions of the country with its western regions which have surplus generation capacities. The total length of the new transmission lines will be around 488 kilometres.
The project, in which the EBRD and the European Investment Bank (EIB) jointly contribute about seventy per cent of total cost by making identical size loans, is a crucial for the entire Ukrainian electricity system.
EBRD President Jean Lemierre said: “The realisation of this Project will have a positive impact for Ukrenergo, for all the other participants of the Ukrainian wholesale market and for the country as a whole”.
The transaction will help reduce losses and allow supply from existing excess generation capacity in western Ukraine to reach Kiev city and the Kiev and neighbouring oblasts. It will also reduce Ukraine’s dependence on imported fuels and help the energy sector link up with the Union for the Co-ordination of Transmission of Electricity (UCTE) – the association of transmission system operators in continental Europe and eventually integrate with the EU’s internal energy market.
As this project contributes to reduction of gas consumption in the country, it qualifies for European Union funds to finance the technical, economic and environmental due diligence. The UK Department for International Development (DFID) provides Technical Cooperation funds for project preparation.
The European Bank for Reconstruction and Development is the biggest financial investor in Ukraine. As of January 2008 it had committed over €3.2 billion through more than 161 projects.